Varlink advocates the 'keep it local' distribution approach

As specialist distributor eyes £20m turnover goal in next three to four years, founder vows he will not bow to acquisition pressure

Varlink has the right vendors lined up and is in a strong position for growth, the specialist distributor’s founder has stated.

Now in its ninth year, the firm recently held its Meet the Manufacturer event at Whittlebury Hall in Northamptonshire, with 180 delegates descending on the venue to meet vendors such as Brother, Zebra, Motorola and Honeywell, among others.

Speaking to CRN, founder and managing director Mike Pullon (pictured) said the firm had enjoyed healthy three per cent growth year on year and was on track to smash through the £12m-turnover barrier in 2014.

“We are definitely a £12m company now,” he said. “Some of it is down to us and some of it is down to our competition causing a fundamental shift in distribution. We are aiming to become a £20m company in the next three to four years.”

He said Midwich’s acquisition of Synergix in 2008 had hit the ball into Varlink’s court, as a number of its vendors had eventually turned to the firm after wanting a more localised service.

In terms of vendors and technology, he said the company had learned through hard experience that it cannot compete with the big boys when it comes to the more mainstream vendors, and it was happy to stick with its niche players and take advantage of the "significant" growth opportunity.

“Most of the retail failures we are seeing are by high street brands. We are seeing more boutique stores and traders opening up who are open to a different and more varied product set, so there is still a significant opportunity in the space,” he said.

Varlink has seen growth in barcode readers, label and card printers and ePoS terminals, he explained, and also the tablet market was bringing in good returns.

Interestingly, the number of systems sold with proprietary software had seen a 250 per cent growth over the year, but Android-run devices grew a whopping 2,026 per cent.

“We started selling WiFi and WAP last year as well, and that is also going very well,” Pullon said.

Another trend he was seeing was the more traditional systems integrators extending beyond their traditional product sets.

“SIs selling into enterprise are having to extend their product set and that is giving us the opportunity to bring main IT providers and integrators into the technology that we sell. We are bringing new resellers on board all the time which our vendors are very happy about.”

He added that sticking to product areas it knows best is the way forward for Varlink.

“If we take half a step left or right, we go away from our core,” he said. “For example, we tried selling a queue management system alongside cash register systems and ePoS units, but our customer base simply did not see the attraction. We think it was because in this country people are used to queuing and just don’t need this type of technology, unlike in other territories where perhaps they are not so adept at queuing.”

Instead of bringing reams of new products on board, he said Varlink had set up an Alliance Programme to offer something different to its customers, such as encryption software, financing and leasing, and work order management software.

In terms of growth, Pullon said he was happy to keep the company based in the UK rather than branch out to other territories.

“I have been there before with my other company,” he said. “There are plenty of other firms similar to us in other territories doing the same job. We don’t need to compete with them, we have enough opportunity here.”

And in this era of consolidation, he admitted the firm had been approached a few times about the possibility of being acquired.

“We have been approached several times, but I am happy being a local player rather than part of a large multinational. I prefer a well-run and efficient local player any day. The big guys make the assumption that everything they have is better than the local guy – but in terms of customer loyalty and the ability to grow sales and offer our vendors something specific to the market, the local guy leads the way.

“I know what our market share is by brand in the UK. We have a lot of opportunity and we don’t need to compete internationally. We know the market, have been in it a long time and we can move a lot more quickly. I feel comfortable knowing we can do a great job here,” he said.