'A massive, complex, expensive jigsaw' - Buy It Direct CEO highlights 'terrible' supply challenges

Nick Glynne says the Huddersfield-based business is targeting 'long-term, significant, double-digit growth'

The CEO of one of the UK's largest e-tailers says the ongoing supply chain issues caused by chip shortages, Brexit and other factors are "terrible" but insists the business is making "healthy progress" despite the challenges it is facing.

Nick Glynne of Buy It Direct, the company behind Laptops Direct and Servers Direct, told CRN last year that the business was investing on the basis that the shift to online sales will become permanent, having been accelerated by the COVID pandemic as sales of laptops and other hardware soared.

The company invested £6.5m in fitting out a half-a-million square foot warehouse in Castle Donington last month, which Glynne said would provide roughly 80,000 extra pallet spaces as the company looks to scale up its operations having seen its turnover rise to £295.5m for the year ending March 31, 2020.

"We're still showing growth, obviously not the same growth as last year which was ballistic," Glynne said.

"And for me, that indicates that the shift online is a structural change. It's not a one-off that happened with Covid, it's a significant structural change in the market.

"Our initial investment that we did prior to the pandemic was useful, we wouldn't have got through the pandemic if we hadn't made that investment in our systems.

"The profits we generated last year were very healthy, and we're now focusing on reinvesting those into scaling the business up even further. So we're betting on long-term, significant, double-digit growth."

Glynne added that the Huddersfield-based business was making "very healthy progress" towards its £500m revenue target for 2022/23 and was currently "exceeding" its plans, despite the number of challenges currently facing hardware resellers.

Among those is the ongoing global shortage of chips and components, which is expected to continue into next year, as well as the impact of Brexit on orders along with other issues which he says the company has managed to deal with despite them "dampening" revenues.

But Glynne says he is not worried about having to compete with Amazon, who went from strength to strength during the pandemic, because of what he claims is a "differentiated" and "anti-Amazon" strategy that has been implemented in the business.

"Our biggest issue at the moment isn't demand, but its supply. The whole supply chain of getting goods out of the far east, into our warehouse and out to customers is very, very challenging," he added.

"It's Brexit delays, chip shortages, factory problems over in China either over too much demand or not enough space to store finished goods, it's container issues with not getting enough containers, shipping delays, and it's the cost of moving goods from abroad to the UK.

"It's all a massive, complex, expensive jigsaw that leaks costs all over the place and creates all sorts of bottlenecks in our logistics operation. And so the situation is just terrible, not for us as a business, we've managed to cope, but overall it's a worldwide problem which has got no immediate signs of abating.

"It feels like you're in a war and I'm having to make different decisions on a daily basis, whether it's having to move stuff by train, by air, not move stuffing stuff at all, or moving it to different factories in Europe because you can't get it out of China. It's absolutely demanding."

When it comes to acquisitions, Glynne does not expect there to be much activity from the business, instead concentrating on growing organically due to the expenses required to buy other companies.

"We see the market as very dry at the moment because other companies are going to be too expensive to buy in this climate, because we've traditionally only bought distressed businesses or businesses that are undervalued," he explained.

"We just see so much opportunity in the category that we're in at the moment where we feel we're still under trading and we've still got niches and categories to develop."