Accessories distributor Kondor works with retailers across the mobile industry, from giants such as Carphone Warehouse to smaller independent high street dealers, and is now also used by all the major players. Having just celebrated 15 years in business, MD Rob Haycock explains Kondor’s tactics and outlines how it maintains a competitive edge in a tough market.
Mobile: What are the current challenges and opportunities?
Haycock: We are making sure we have products in our channels that suit the consumer. We have made a lot of changes to our range to maintain our margins. Accessories are an area that people overlook and there are strong margins to be made.
There are more feature rich products around now. People are more likely to hang on to their phones because they are tied into an 18 month or 24 month contract, which provides an opportunity to sell the better cases and products such as headphones.
What are the issues affecting your customers?
There has been an issue to do with credit insurance. Dealers to large players have been affected, as it has been difficult to get finance. The credit market has shrunk and we have looked at it very closely from a credit insurance perspective. Kondor has a very strong balance sheet and people would rather trade with us than others.
How do you maintain a strong position in the market?
We get our heads down and get on with it, so we have hardly any debt at all. We have strong partners that we have dealt with for many years. It was our 15th anniversary this year, we had a celebration, and a lot of people have come and gone.
How has your business changed recently?
We have taken on six people across the organisation – four in sales, one in accounts and one in logistics. We looked closely at our sales and whether we were strong enough to expand. We restructured various areas and decided that we need more people.
How do you retain customers?
We need to ensure we provide as much margin as possible – as in percentage and money margins, and structuring dealers’ portfolios. They’re also looking for a different customer base and we are trying to give them the sort of products that will last and are most appropriate. We give customers the best price; they don’t want too many bells and whistles. We have good stock and a huge supply base along with a fantastic portfolio, and we are known as accessory people.
We were the initiators of fashion and we are now moving into music and sound. We have 6,500 stores, suppliers and customers and a great commercial team going to the Far East, Europe and the US to find products.
What kind of products are you moving into?
We are moving into laptops and dongles. We are providing starter packs that include a case, memory, portable mouse and extra power supply. There is a demand to clinch laptop sales and dealers need some way of distinguishing themselves from their competitors. There is currently a lot of dongle business, Vodafone and 3 are putting money into pay as you go dongles.
Other distributors are expanding into accessories, what are your thoughts?
They all shout about it, but we are used by all the major players. Competition is a good thing despite being a concern, we have a great portfolio and we are not serving huge amounts of debt, so we are very strong.
Would you expand into Europe?
We do some European business for Carphone and if the customer wants us to be in Europe then we will be. We live and breathe by what our clients do – Kondor even has desks in some customers’ offices, offering a vendor managing inventory. This means large corporate businesses can use us instead of employing nine buyers.
The UK is a strong market, but a very mature market – a lot of Europe and the US look to the UK to see what is happening. For example, Bluetooth headsets are just coming to the forefront of the American market, where as they have been around here for about four or five years. I look at Japan, China and Korea for technology, and Europe for generic fashion culture.
What are your targets for the rest of the year?
Our key targets are to ensure that our customers have a fabulous Christmas in Q4. We have been working flat out with all of them to ensure a really strong final quarter – it’s all we’re focused on. The build up is happening now and we are right in the middle of it. Q4 is fundamental to the entire mobile business, as it is the key time for people to spend money. We are bundling products together and trying to be ahead of the curve.
How do you maintain relationships with independent dealers?
We have a very strong trade sales team of 10 people and they work with all the dealers. We can supply anything for the next day as long as it is ordered by 4.30pm. We have had internet ordering for four years and we have just rebranded it as ‘e-tailor’, giving dealers access to 3,500 lines through the website. It is still in its beta stages.