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In the last five years, Impro Group has achieved significant growth by applying its unique business model across world markets. In addition to its head office in Pennsylvania, the company now has offices in Belgium, Brazil, Egypt, Mexico and the United Kingdom. Its 60 employees generate approximately $10 million in annual revenue. Within the next three years, the group expects to expand to an additional 10 countries, with sales topping $20 million.

Managing a single small business is difficult enough, so how does Impro manage to keep a handle on things across the barriers of language, culture, time zones and distance?

The key lies in the innovative approach to technology the company has pursued since Wayan Garvey took the reins in 2000. “Traditional distribution is easy compared to the challenges in the surplus supplies niche,” Garvey says. “It is Impro’s systems that unite its people, processes, and products, allowing them to deliver value to trading partners.”

Mainstream resellers need only focus on the latest products, and can simply stop carrying them when demand tails off. However, Impro’s position in the surplus niche means that it must not only keep up with the torrent of new products that are constantly being introduced by the OEMs, but it also must know about every consumable for every piece of office equipment ever made. Original, compatible and remanufactured toner, developer, drums, cartridges and other supplies for copiers, printers, fax machines and duplicators from Agfa to Xerox comprise its domain.

Compounding the challenge of managing price and demand across the 15,000 SKUs the company trades in is the fact that the items are not truly commodities. Many printer consumables carry an expiration date. Manufacturers change the packaging styles, part numbers, and presentations every so often. Most relevant, since everything the company sells has been on someone else’s shelf first, the packaging can range from pristine to terrible.

This complexity generates a “SKU-equivalent” of approximately 30,000 in inventory at any given time, since each product must be handled distinctly according to its attributes of packaging condition, unit of measure, and expiration date. Physically handling the products is a challenge as well because the quantities on hand fluctuate wildly due to irregular, unpredictable availability.

“When I was getting started, I knew that to be able to grow, we would have to automate our processes because even at a small scale it was very difficult to manage,” Garvey says. “Since we had pioneered the concept of surplus supplies remarketing, we couldn’t buy off-the-shelf software to meet our needs—we had to build it ourselves.”

Working with a team of engineers in India, the company developed its own suite of web-based software tools from scratch to manage its warehouse. It was an early adapter of wi-fi, going paperless in its warehouse processes all the way back in 2001. Today, each individual piece of the hundreds of thousands of items that flow through Impro’s distribution centers is tracked by its own unique tracking barcode. The company knows what it is, where it is, who put it there, how much it paid, where it got it from, how long it has been there, and which shipping carton it is packed into when it is sold. Each of the approximately 10,000 stocking locations in six warehouses can accommodate an unlimited variety of items, and space is dynamically allocated to make optimum use of its 60,000 square feet.

Of course, information about inventory is only one part of the equation. Once the physical processes of managing the flow of products had been taken care of, the company proceeded to automate and integrate its entire business process, from the marketing activities required to find the deals, all the way through to collection of the money when the products are sold.

As a liquidation buyer, the company does not often have the luxury of choosing what it brings in. Most of the time, the inventories have already been palletized and are sold off as a single lot. In order to find markets and extract maximum value from the packages it buys, the company must employ a range of marketing approaches and sell into a variety of channels and markets.

“No one has a DocuTech in their house, and not many copy shops run 300dpi Epson inkjets,” Garvey jokes. Domestically, the company primarily sells to distributors, dealers, stationers, copy centers, and service companies. Complementing the wholesale business is a thriving online retail operation that not only allows the cost-effective reach of tens of thousands of end-users, but also provides a way to move the items whose packaging is damaged or missing which are less attractive to resellers. It regularly sends containers to export customers in 40 different countries around the world.

Impro Mexico, Impro Latina and Impro Egypt serve as regional distribution centers for the products acquired in North America and Western Europe. Impro Cartridge Trading Group in the United Kingdom specializes in out-of-date and out-of-box inkjet and laser cartridges. Knowing where in the world a given machine will still be in use, and where to sell to get the best prices, is a core capability of Impro. Often, if the machine for which an item was originally produced is no longer used anywhere, the product will be adapted or poured out for use in other machines.

“Sometimes the stories we hear are pretty crazy,” Garvey says. “We have one customer who cuts old Riso masters and then rewinds them backwards so that they can work in the equipment in his country. Another customer of ours explained how they mix developer and toner from two unrelated Xerox machines to refill cartridges for use in a totally different Xerox machine. We had to draw the line, though, when we were asked to pour all the contents from miscellaneous leaking toners into bags for sale in Africa!”

With competition increasing, margins eroding, and opportunities ever scarcer, Impro offers its trading partners a unique way to make more money. For anyone running an empties collection program, surplus supplies is a natural profit booster, because the same companies they already collect from are likely sources of surplus. Independent technicians are already at the customer site and need only ask the question “Have you upgraded any machines lately?” to find that leftover supplies are everywhere. Dealers, leasing companies, and the transporters who serve them all have an opportunity to turn equipment trade-ins into a pleasant profit surprise, because the few leftover toners sitting in the cabinet can be worth more than the machine itself.

On the sell side, Impro delivers incremental margin to its customers by providing the same products they are already buying from regular sources but at lower prices. While not all companies are nimble enough to integrate this type of sourcing into their operations, those who are can turn 10% margin business into 40% margin by overlooking a shipping label or some shelf wear. The company warranties everything it sells, and offers the same value-added services—such as same-day blind-drop shipping—as the big-name distributors.

Impro’s unique model, proprietary technology capabilities, and broad network of loyal established relationships are essential ingredients in the classic recipe for business success. Striking a balance between torrid growth and careful harvesting of past plantings is the primary challenge the company faces today.

At 27, owner Wayan Garvey has had to temper his impatience in setting a sustainable pace for expansion. “The temptation to hit the gas pedal harder is always there,” he admits. “Early on, I burned out many good people in the organization because I wasn’t experienced enough to know what was reasonable to expect. I’m deeply grateful for all the dedicated people on our team today. It’s an honor to have the chance to earn their confidence every business day.”

CONTACT INFO

Impro Corp
          www.ImproGroup.com
          6901 Lynn Way
          Pittsburgh PA 15208
          Voice: 800-554-5912
          Fax: 413-556-6777

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