|
Company
On the Move: SD PACIFIC
By John Eis (Jan 2000) The beginnings of SD Pacific are a personification of the American success story. The company is in the business of buying surplus printers, copiers, fax supplies and some bulk toner. Keith Harris overcame a lot of adversity after starting his business in a shared one-room storage closet at a freight forwarding facility in South San Francisco. Located behind the San Francisco Airport, he had approximately 1500 square feet of ware-house and a 100 square foot office to work with. "We subleased from a freight forwarding company who told the landlord we were merely storing products there," said Keith. 'It didn't take long for him to become suspicious because Henry Sun, our four employees and I were building and packaging all of our product there. Finally, we made one large buy where they shipped us around forty pallets and we had no space to store them. So we were infringing on everyone else's space. The landlord had enough and we then were forced to moved to our current warehouse of 5000-ft w/ 1500-ft of office space. All in all, it was good for us because it tested our commitment to make the business succeed." Henry Sun, now a partner, was Keith's warehouseman." It was tough going in the beginning and that difficulty was enhanced by an exporter from Africa who scammed us out of about $30,000.00 which nearly put us out of business," said Keith. "Henry and I pulled every penny we could from our pockets and took the gamble. Thankfully, due to some great customers we were able to get past those initial startup problems." Prior to starting his company, Keith worked for a large company in the same business for about eighteen months. "When I saw the high employee turnover. It made me realize I'd better do something to secure my future. He explained. "My biggest problem, as it is with many startup operations, was the lack of money. Nevertheless I decided to go ahead. I had no guaranteed vendors. No guaranteed suppliers. no guaranteed manufacturers working with me. All I had were the customers who were loyal to me when I was at the other company. So we bought some industry marketing lists and just started making phone calls. "SD Pacific markets itself through media advertising, and direct marketing using post cards, fax flyers and e-mails. Keith and his crew of 10 or so employees maintain a positive focus and confidence in their ability to make things happen. "When I started, we had maybe 6 or 7 competitors but how there are about 29 or 30. However, I can sell things my competitors can't. That's why my motto is 'If I don't buy it throw it away'. A lot of dealers don't want to sell anything at a loss but every product reaches a point where it becomes obsolete. It makes sense to recover something on these items rather than let them sit on the shelf and end up having to throw them away. The interesting thing about this business is that nobody ever calls us. We have to constantly be on the phone cold calling because they don't want to sell their products to us for less than they paid. It has been particularly challenging for us to be able to win the bids for these products. I do what I have to do to get the bid. Once in a while we get lucky and deals fall in our lap. For example, recently a company was going out of business and just drove up here and dropped all his inventory off." SD Pacific's customers are made up of suppliers, small to medium wholesalers and brokers throughout the United States. The company works with brokers who handle foreign sales but deal directly with their Asian customers. Keith explained, "I see the need to also have a direct line overseas. While the foreign countries are not yet doing a lot in digital business, the opposite is true of the analog products. There is a lot of opportunity in analog products in the foreign markets". When asked what sets SD Pacific apart from his competitors, Keith's response was, "Nothing, By that I mean everyone is going to promise the world to get the bid, However, you have to do business with us to know that you can trust us, that we will pay what we say we will pay, when we promise it will be paid. Additionally, you will learn that we will take the products we say we will and don't return anything. We are willing to take the risk. It is the nature of the business that sometimes the items we buy are not usable. When you are getting something at 40% of its market value, there must be a reason. On the other hand sometimes I get a great product such as Xeikon DCP made in Belgium, which is for the Xerox Docucolor 70,and is am excellent product. Keith says SD Pacific is in the business of staying in business. He and Henry see the need for growth and diversification. Accordingly, their plans for the future include growing their business with the people they are selling to now and to buy 3 million in products this next year adding parts such as this drums and wiper blades to their inventory. "On occasion, we have even bought standard office supplies, " remarked Keith. "SD Pacific also does trades. If a customer needs a particular item but can't move something he already has. We are open to working out a trade to accommodate him. We will whatever it takes make the deal in the most honorable way possible. "Keith's advice to anyone in the business; "Sell all your products to me!" |