Business View Magazine interviews representatives from Worldwide Supply as part of our focus on best practices in the communications sector.
Worldwide Supply, headquartered in Franklin, New Jersey, is a global supplier of network and telecommunications equipment and services, and a leader in the secondary market for used and refurbished equipment including routers, switches, and networking services. The company was co-founded by its CEO, Jay VanOrden and COO Jim Smith, who are firm believers that one company’s castoffs can always become another company’s treasure.
VanOrden has been in the technology resale business for over 30 years. He founded his first company, MSI Communications, in 1988, and grew it over the next twelve years, selling it to a large public company in 2000. “The reason for the acquisition wasn’t for an exit out of the business,” he insists. “I was looking for capital. We were somewhat undercapitalized and were looking for access to the public companies customer base, which were large carriers and cable operators. They, in turn, were looking for a company that had data expertise, because, at that time, the market was moving towards data/internet protocol, compared to the telephony/telecom world. So, we married the two organizations together and over the next few years grew the company to about $250 million in revenue and about 360 employees.”
However, after a few years, VanOrden did make an exit out of the business. “I ended up retiring at 39,” he recounts. “I was somewhat burned out. I put a lot of hours in over a long period of time building the organization and I also didn’t like the direction the public company was taking the business; it was not conducive to long-term success, in my view. So, I left the organization, got out of the business, and felt life was great. Six months later, I was absolutely miserable and I found out that what drives me out of bed in the morning is the challenge of building and growing an organization. To me, that’s the fun. I couldn’t find anything that replaced the fast-paced nature of our business and our industry.”
So, refreshed and refurbished himself, VanOrden got back in the game, starting Worldwide Supply in 2004. “I made a list of every mistake I had made in business over the years, and I also made a list of the things I felt we did very well, both pre- and post-acquisition,” he says. “And the most important lesson I learned was the importance of our organizational structure and our people. That’s where it started and what led us to creating the foundation that allowed us to have continued growth and success.”
Today, Worldwide Supply averages between 80 and 100 employees, and maintains over a dozen facilities throughout the U.S. “We are also in Central and South America; Amsterdam is our headquarters in Europe,” VanOrden adds. “And later this year, we expect to grow into the Asia/Pacific region. So we are truly, worldwide.”
The company’s customer base is focused on Tier One and Tier Two cable operators, service provider/carriers, and medium to large-size enterprise businesses that might need the necessary equipment and services to build their backbone network to support high-speed voice, data, and video. It sells both new and pre-owned products as well as a variety of services that support them. It is a recognized leader in the secondary market network equipment industry. In many cases the company will procure equipment from the Tier Ones, which it turns sells to the Tier Twos, saving them as much as 80 percent of their costs.
VanOrden explains: “Many of the Tier One service providers, whether a cable operator or carrier, have a significant amount of excess. Either they’ve over-purchased, or what we have found in the industry is that these organizations’ networks are so large, and what’s happened over the years is they’ve acquired and/or merged with others. And they have duplicate products, or the company they acquired doesn’t have the same manufacturer in their network, or they have current technology and no longer have a need for the previous generation. So they have to swap it out. And that creates a niche, an opportunity to turn it into capital. In many cases, this equipment isn’t used; sometimes it’s still new in the original packaging. We can go down to the Tier Twos that don’t have the budget to be able to make the investment in the brand new equipment, and by utilizing us a primary supplier, it allows them access to that equipment because of the significant savings we can provide.”
While reselling will still be a major part of the business, VanOrden believes that, going forward, Worldwide Supply will be more focused on the service side of the company. “We were known for many years as the equipment company in the secondary market,” he says. “But we are seeing, over time, that services are becoming a larger and larger portion of our business – not just with the maintenance piece, but also with asset recovery services and professional services. There is real need and demand in the market, today, as companies are trying to control their budgets, their bottom lines, and their head counts. So, that’s been a real sweet spot for us.”
VanOrden elaborates on some the company’s current portfolio of service offerings: “They range from third party maintenance – we can provide the same maintenance and contracted services you would get directly from the OEM, but we can do it at about half the price. What allows us to do that is we already have much of the spare equipment in stock, and we have the technical engineers on staff, as well. It was really the first type of service we entered into as we branched out from the hardware. And that has led us into a variety of professional services, as well as, today, asset recovery services. We’ll go onsite, whether it be to a carrier or cable operator, and we will perform an onsite audit of their inventory by location and then we will transport their excess back to our facility. We’ll test, refurb, upgrade and remarket with a life time warranty and do a revenue share split with them. And we’re doing that with some of the largest operators in the world, today.”
Over the next several years, VanOrden also sees a shift in the industry as it moves away from hardware towards defined software platforms. “They’ll always be some version of the hardware that’s going to be required in the networks, but it will very much be a software-driven industry,” he posits. “So, if I were to look five years into the future, I believe the expertise in the software side of the business and the services that surround supporting that software is going to be a critical component to companies in our industry. So, it’s a good time for us. The next five years are going to provide substantial opportunities for exponential growth.”
VanOrden explains some characteristics that he believes separate his company from the competition: “There are probably a thousand companies out there that sell, in some form or fashion, used equipment and new excess. The difference is most of them are small, one or two-man shops that can’t carry the receivables and don’t have the technical expertise. They don’t have the ability to test, upgrade, and refurbish the equipment on a large scale, and that is one of the differentiators for us. We have a state-of-the art testing facility that we’ve invested millions of dollars in building, along with our certified engineering staff.”
But VanOrden also adds that since the company doesn’t manufacture any products, nor provide a service that can’t be purchased elsewhere, there must be another reason why Worldwide Supply is an industry leader – recognized as one of the top 5,000 fastest growing privately-held companies in the United States five times (2010, 2011, 2012, 2013, and 2016), by Inc. Magazine, and named one of the Best Places to Work in New Jersey for the sixth straight year in a row.
“People are clearly the number one differentiator,” he declares. “The culture that we have created is unique and the work environment is key to our success. What we learned is that if you treat your employees in a first-class, first-rate manner, that creates a template and helps them to understand how they should be treating all of our stakeholders. We have 99-plus percent customer retention rate. We don’t lose a customer due to customer dissatisfaction. That’s one of the things we pride ourselves on; that’s the number one reason for our success, today.”
AT A GLANCE
WHO: Worldwide Supply
WHAT: A global supplier of new and used network and telecommunications equipment and services
WHERE: Franklin, New Jersey
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