Odyssey Telecommunications is a relatively new company started up in Buffalo, New York. Odyssey Telecommunications helps telecommunications and VoIP manufacturers, resellers and service providers liquidate overstock, used and new equipment through its online and offline channels.
Odyssey Telecommunications was recently named to Inc Magazine’s annual list of the fastest growing companies in the United States. With three year sales revenue growth of 1,140%, Odyssey Telecommunications was ranked the #388 on the list and had $3.3 million in revenue in 2012. Ironically, VoIP Supply is also in Buffalo, NY, so I pondered to myself, since when/how/ and why did Buffalo, NY become the mecca of both used (Odyssey Telecommunications) and new (VoIP Supply) telecom equipment?
To find out more I interviewed Justin Wekenmann, Co-Founder and EVP of Odyssey Telecommunications.
1) Tell me a little bit about your founding members, where they came from, and how Odyssey Telecommunications got started
Tom, Odyssey Telecommunications was co-founded by my father Robert Blizniak and I in 2008 after working at industry leader VoIP Supply. Robert has a deep entrepreneurial background, having founded a number of companies over the last 40 years in the food service & recreational vehicle industries.
At the time, the industry was experiencing blistering growth and we saw an opportunity to form a different type of company that would sit at the intersection of distribution, ecommerce, channel and emerging marketplaces. It sounds a bit cliche, but we literally started out of a home office, bootstrapping from the start and growing aggressively without outside capital.
We now provide telecommunications and VoIP manufacturers, resellers and service providers with liquidation services, buyback programs, device reconditioning and other asset management programs that solves the problems presented by overstock, used and returned equipment. Utilizing our management platform and established online and offline sales channels, these companies can quickly capitalize overstock, return and used inventory allowing them to free working capital, shorten inventory turns and reach sales targets.
2) How do you ensure that a company liquidating their extra IP phones, phone system, etc. and selling it you is something you can resell and make a profit on? I guess you sort of have some knowledge of what sells, but there have been some phone systems for instance that have come & gone. How do perform that risk assessment as well as ensure profit?
Unlike most businesses, ours is a buy side business. This means that the profit is in the buy, so we focus most of our time on developing tools, analytics and processes that keep us on top of pricing trends. At the start, we had to follow our gut and attempt to broker as many deals as possible. Over time, we’ve been able to gather more data, knowledge and inventory sources, which has reduced some of the risk, but still we get caught now and again. We consider it a cost of doing business.
3) How do you acquire used telecom inventory? Cold calls to businesses by internal sales staff? Companies call you? And if so, how do they find you?
We acquire our inventory in a number of ways. We work with all levels of the distribution chain, from the manufacturer, to distributors, VARs, service providers and even the end user. At the start of the business, we simply cold called and email our way to the right person within these organizations and worked with what we could.
Today we still reach out proactively, but we have moved towards more of a service oriented approach, in that we have custom programs and services for each partner based on their situation. For instance we work with some manufacturers on competitive buyback programs and service providers on off-lease equipment. We even have some partners that use us at the end of the month, quarter or year to liquidate new equipment that they took too much stock on.
Of course we also receive referrals and we are about to ramp up our inbound acquisition efforts.
4) Speaking of inventory, what sort of technology do you leverage for inventory tracking from the time a product enters your door, to staying on the shelf, to being sold, and finally shipped. i.e. RFID, barcode scanners, serial number tracking.
We’d love to tell you that we have something crazy behind the curtain, but our processes are pretty straight forward. We use all of the common technology that you’ve mentioned; inbound inventory is scanned in, matched to a purchase order, held for inspection, then ran through our inspection process and finally moved to a sell position. We use a combination of softwares that are all tied together with proprietary middleware we’ve built in order to ensure we are as efficient as possible, turning inventory positions as quickly as possible.
5) You must track the best-selling items so you can acquire more of it if inventory gets low, correct?
Yes, we do track best selling items. We use a combination of data sources to do this, since our own sales numbers may be inaccurate due to the nature of our business. It’s surprising the number of outlets you can find that have an API with relevant data for better understanding the best moving products in particular markets. Working directly with manufacturers and listening to customers, however, has been the best source of trending data.
6) Used equipment is tricky. Tell me about any sort of refurbishment/refresh you do to the equipment and any warranty offered plus what is your return policy.
Yes, used equipment can be difficult if you are not careful. That’s why we try to work with partners on excess inventory positions or on service programs designed to assist them with their returns, off-lease or factory refurbished equipment, Tom.
When we do work with used equipment, we bring everything in, take it through a 360 testing process, upgrading and cleaning the equipment. If it has gotten to us and through this process, the chances of failure in the field are low.
To protect customers in the event of an issue, we offer a six month warranty, wherein the products can be returned any time during that period. We’ve experienced a less than 2% return rate over the years.
7) Do you offer pre-sales support to guide customers in making the right telecom choice and similarly, do you offer post-sales technical support? Or are most of your customers technically savvy enough that they just want inexpensive used telecom equipment? Or perhaps you simply take overstock and sell only to VARs/resellers who already have expertise in this stuff? This leads into my next question…
Absolutely! In fact we credit our strong growth not so much with our ability to create programs, services for partners or even our operations, but with our ability to delight end customers.
We have sales, customer service and technical professionals capable of developing a solution for customers and solving post-sale issues. It’s one thing to be able to find inventory and have the capital to acquire it, but you can never forget that you actually have to sell it!
8) Tell me a bit about your customers – local – national, international. Any specific verticals? Do you have more end-users/companies buying stuff or VARs/resellers/installers
We like to say that everyone is a customer and everyone is a supplier. We have customers across the world, primarily in the telecommunications and VoIP industry, but growing quickly in other verticals such as health, beauty and consumer electronics.
On the supply side we primarily work with manufacturers, distributors, VARs and service providers. On the sales side, we tend to have more end user customers, but do have a growing number of VARs and service providers tapping into our inventory positions to maximize their own margins; it’s tough for many of these folks to make a good margin on new products sold through traditional distribution.
For them, they often ask themselves, “Why put in all that work to only make 8 - 10 points of margin, when you can make 20+ through us?”
9) Tell me how you differentiate from your competitors. If it simply a matter of a big pie out there and whomever grabs the customer first, or do you bump up against competitors quite a bit?
We like to think that we’ve carved out a unique position within the market. Many would-be competitors are beholden to contractual agreements about how, where they can buy and at what price they can sell. We see this as a huge disadvantage as the market continues to race towards zero.
We don’t have those restrictions and as a result, we are able to pick and choose who, how, where and why we buy. Having this sort of control has allowed us to build a company that focuses on fair business practices, delighting customers and hustle.
With a diverse set of backgrounds, a vast network and domain expertise, we feel we know these channels better than anyone out there and we’re excited to be creating more services that aide the channel in dealing with inventory positions: whether it be new, overstock, used, off-lease or refurbished.