ELECTRONICS developer E3 Style expects $11.3 million turnover this year, but the company’s rapid growth in four years comes as no surprise to co-founder Vanessa Jordan. The 32-year-old says deals with the likes of Dick Smith and Samsung are driving the business forward, with a big US push scheduled for October.
In 2006 there were changes at play in the electronics retail sector, with retailers increasingly choosing freight on board (FOB) arrangements with China over the traditional warehousing of stock.
At the time Jordan was working as a national account manager for Crest Electronics, but as she saw this trend she decided to move with it and found her own company, along with colleagues Jillbert Mulder and Richard Chen
With a business model to develop IP while sourcing manufactures from China, E3 has established itself as the largest youth electronics supplier in the country, with 15 registered brands and technology that is sold to companies like Samsung and Akai.
But for Jordan it’s all business as usual.
“With youth electronics we don’t have any competitor that has the width of range that we do and we had a business plan from the start, out strategy has barely changed,” she says.
“It was something that was missing in our previous company so we were very determined to get in place a clear strategy, that we knew who our customers were, we knew we were going to go international and we future-proofed our products so they could be re-used overseas.
“None of this is a surprise to us. It’s just ticking the checkbox.”
The company supplies goods in areas ranging from audiovisual cables to mobile phone accessories to camera accessories.
With growing distribution channels in New Zealand, South Africa and the US, the company keeps a lean business model with 15 staff, but Jordan plans to hire three more employees this year to cope with an expected revenue surge.
“For turnover this year we’re looking at US$10 million and in October we’re launching internationally on a huge scale, so turnover will probably double next year,” she says.
“There are 250 million people in the US and we’re only in one retailer over there. Our focus is on our Australian business but through our relationships we have some international distribution already.
“We developed 300 products last year alone, but from the start we didn’t want to put pressure by putting on sales if it didn’t have the product and logistics behind it, so we made streamlined processes and that’s basically bulletproof in our development.”
With this lean model the business is highly profitable but to keep economies of scale and remain competitive, Jordan plans to continue reinvesting in research and development (R&D).
“In terms of this year over last year we’ve almost doubled our GP gross profit margin) and the idea is to get the best price for customers and be aggressive for customers.
“Last year we spent $100,000 on R & D but going forward we’re planning to spend half a million next year – we really need to start from scratch with new concepts.
“Electronics are becoming more lightweight and compact, but that hasn’t really happened as much with accessories, so that’s what we need to work on.”
Jordan points out that while companies like Akai and Samsung have a significant global presence, they will often prefer to source technologies from companies like E3 Style because they can get products to market quicker.
“We want to focus a lot more on going into those type of arrangements – there’s very little that they develop themselves. We’re a product development company. We develop products for other brands,” she says.
Jordan is also not concerned about the threat of IP infringement in China.
“Everyone has issues dealing with China, with the cultural differences and the language barrier, but we have a product team who speak Taiwanese, Mandarin and Cantonese so we always have the ability to communicate with them.
“We’ve got a good relationship with vendors and maintain a trustworthy supplier with agreements that stops them re-producing our IP.”
As the company continues to tick the boxes, she says that entrepreneurs need to follow-up on their ideas while making sure they are viable.
“It’s about having an idea, observing say a niche or improvement on a business model, product or service and making it commercially viable.
“A lot of people have ideas but don’t go after them or make them commercially viable.”
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