Exclusive: Buy IT swoops for asset recovery and refurb firm
Reseller buys Swansea-based Trojan Electronics
Channel giant Buy IT has acquired asset recovery and refurbishment firm Trojan Electronics.
Buy IT managing director Nick Glynne told CRN that the Swansea-based firm sees a large chunk of its business come from refurbishing and selling products that suppliers have had returned to them by customers.
These products are then sold - often via eBay and Amazon - with Trojan taking a commission of the fee, which is handed to the client.
The firm counts large businesses including Tesco and Hive among its customers.
"Where someone has a problem with a returned item we'll bring it in, refurbish it, and if the manufacturer wants to [sell it], we have fantastic relationships with eBay [and] Amazon, or we can exit abroad to good contacts in the Middle East," Glynne said.
"Some manufacturers will just want some cash to get rid of the items, but some will want to manage things a bit more carefully and make sure that the items don't end up on the market at a distressed price, disrupting the normal channel.
"We can provide a safe way of managing that by keeping the prices right and managing it overseas.
"Because it is such a large business - one of the top 20 UK sellers on eBay and Amazon - we get really good commercial terms and significantly lower rates than everyday sellers do, so we can pass that on to clients and give them an offering they couldn't have themselves."
Buy IT has acquired Trojan in a pre-pack deal after the organisation entered administration in November, with Glynne saying that all members of staff have been kept on and around £3m of debt has been paid.
In its most recent full accounts on Companies House, Trojan reported a revenue of just under £9m for the year ending 29 September 2017, with an operating loss of £522,180.
This revenue figure represents the commission that Trojan has made from selling products, rather than the full amount that the sale of products has generated. Glynne said that this figure is over £50m.
He added that, with its financial difficulties behind it, Trojan has already made steps towards securing a host of new clients.
More broadly, the MD said that Trojan gives the wider Buy IT business a different source of revenue.
"It means we are not totally dependent on front-end sales," he said. "We can balance that risk on returns and as we head into a potential recession with Brexit and a slowdown, recovery of returns and profit leakage is going to be even more important for vendors.
"It is an add-on to what we do and will be kept as a separate business, but we have all the relationships with the types of clients that Trojan has, we already understand the industry and we already do some refurb for direct sales, so we have the systems to scale up Trojan."