Westcoast has been an integral part of the Thames Valley growth economy for more than 30 years. In fact, with 10,000 vehicle deliveries every day, Westcoast’s national distribution of global brand-name IT products through industry resellers and ‘High Street’ stores, underpins many of the business functions and lifestyle activities of the UK population
In the world of technology, speed and efficiency are highly valued and often vital for success and Westcoast has mastered both, writes John Burbedge. In fact, to coin a fresh IT-industry acronym, Westcoast today offers DaaS – distribution as a service.
As Phil Bell, Westcoast’s marketing manager, explains: “We have to consistently find the quickest, cheapest, most reliable distribution solutions for our customers. That’s our constant challenge, and we meet it daily.”
It’s as well that Westcoast has become an expert in the field of IT product distribution. The technology sector, with its OEMs, vendors, B2B and B2C operators, is demanding and highly competitive, which leads to net profit margins for distributors that at times are barely perceptible – 0.5% is common and contracts can be lost by far less.
Margins were far better when Joe Hemani set up Westcoast in Reading in 1984, and gained the seminal distribution contract with HP/Compaq that launched his SME on its trajectory to becoming consistently ranked in the Sunday Times Top Track 100 of largest privately-owned UK companies.
Squeezed margins was a key reason why Westcoast adopted a revenue growth strategy soon after the recession. Increase operational volumes, keep costs low and even small margins can produce healthy profits.
“In the past seven years, we have experienced 20% year-on-year revenue growth,” noted Bell, who added that Westcoast was hopeful of £1.6 billion sales this year.
That strategic growth has been largely achieved through M&A activity, notably the purchase of reseller XMA, and acquisitions of resellers Viglen and QC Supplies in 2014.
“We needed to get busy being big. This industry is all about being big,” explained Bell, who mentioned that Westcoast now has increasing competiton within the UK, but none have the flexibility and the flat management structure that will enable us to win. he proudly added.
In fact, Westcoast’s knowledge and expertise in product distribution across the whole IT, consumable, software and electrical spectrum is such that the company has been approached to advise on distribution solutions for other industry sectors.
Not that Westcoast simply moves boxes from warehouse A to warehouse B.
With some contracts requiring direct delivery to end-users, Westcoast’s preferred distribution partners quite often literally go the extra mile to satisfy customer needs.
Along with traditional blister packaging and point-of-sale product enhancement services, Westcoast also offers third-party financial credit and leasing opportunities.
And, Westcoast has grasped the commercial opportunities of cloud technology, establishing its own £1 million data centre in Wales, to provide IT managed services.
Bell also mentioned greater likely Westcoast involvement in the mobile technology sector, particularly with a ‘debundling’ phone market offering fresh commercial partnering opportunites. (Westcoast only partners with the world’s strongest vendors – eg HP, Microsoft, Apple and Toshiba – and adopts a ‘narrow and deep’ business philosophy.)
With the home IT market flatlining at present, Westcoast’s moves into fresh commercial areas make sound sense. Westcoast’s recent joint venture with a Benelux supplier is an interesting new footprint in Europe.
While Westcoast can hold more than £120m of product available for next-day delivery, arguably its most valuable asset remains its loyal staff and their work-hard play-hard winning culture. Westcoast may be the biggest privately-owned business around, but it still has positive SME-style attributes.
Being privately owned with a flat management structure, decisions can be made quickly. Managers on first-name terms are approachable, listen and empower their teams. There is a pride and passion in customer-focused achievement – recognised internally and by many industry awards.
As Bell says: “We are making billions in revenue but fundamentally it still feels entrepreneurial. Personally, I feel I can make a difference; feel like it’s my business, but without the ownership responsibilities.”
Interestingly, Bell reckons that around 75% of TV250 ranked companies are either existing customers or will have received a product or service indirectly from Westcoast. “Our work is helping local businesses to grow.”
Tips from Westcoast
- Stick to your core skills, and do them well.
- Regularly analyse costs and performance.
- Empower staff to do their best; allow them to enjoy their work.
- Treat everyone as a customer; as you would like to be treated.
- Competition is a business constant; enjoy winning.
TV 250 SPOTLIGHT
TV 250 Number 4: Westcoast
Scale: £1.5 billion sales, approx 70% B2B, 30% B2C
Scope: Leading distributor of technology products in UK and Ireland
Staff: 1,100; Thames Valley 800-plus
HQ: Arrowhead Park, Theale, Reading
Offices: Nottingham, Milton Keynes, Dublin
Founded: 1984 by owner Joe Hemani.