FARMINGDALE, N.J., Aug 15, 2002 - Depot America isn’t exactly a new player in the printer parts and repair game, but it is a company that would like its customers – and potential customers – to take another look at what it’s doing.
What it’s doing is focusing on customer service – an “Amazon.com” approach to service, according to Bob Leonard, Depot America’s vice president of sales and marketing. “We give the customer what they want,” said Leonard.
The customers appear to be responding. Depot America has had a compound annual growth rate of more than 30 percent each year for the last 11 years. Last December, the company moved into a new, 55,000-square-foot facility, and will expand that space to 75,000 square feet by March 2003. > The seeds of the Farmingdale, N.J.-based company were planted in 1980 when now-President Joe Costa took a second job on the night shift to make ends meet. That job involved working with a friend who had a business servicing and rebuilding disk packs. For Costa, who has a master’s degree in business and a broad background in finance, operations and sales, it was a defining moment in his life, and one that propelled him into owning his own business. That happened in 1983, when Costa, his wife, Bridgid, and partner, John Tiano, started their own company. The company drew on what Costa had learned while working in all of his previous posts. “It’s the best thing, to prescribe your own future,” he said. “We’re responsible for the good and the bad.”
The company initially focused on the repair of dot-matrix print heads.“That was 93 percent of our business,” recalled Leonard. “We had two major customers and were number three in the market.”
Leonard began his career with the company in 1991, after several years in the computer and office supply business. When he came on board, he quickly added his touch to the company.
“I wanted to diversify the customer base and product line,” he said. Within a year and a half of its inception, Depot America changed its focus, concentrating on the laser market — circuit boards, paper path assemblies and fuser assemblies, an area Leonard felt was ripe for growth. His instincts were correct.
“We had 20 employees, and did just over a million in sales,” he recalled of the year he started. “Now we have 180 employees and will do nearly $30 million this year.” It’s a big leap from the company’s beginnings to its current status, and Costa is the first to appreciate it. “When you start, you do everything on a shoestring,” said Costa. “You’re so busy getting it together that you’re not paying attention so much to where you are, but where you need to be to get ahead. And eventually that translates into growth, and into success.”
Leonard also focuses on ensuring that the company’s fast growth does not compromise any other areas of the business. “Our number-one challenge is to keep our cornerstone philosophies intact,” he said. “We were built on customer service, and we still shy away from being too far from the customer. We listen to our customers. We instill in our new salespeople the need to speak up and ask questions of the customer and to be visible. We keep our ear to the marketplace.”
Depot America constantly strives to keep up with the demands of that marketplace. In order to do that, the company has initiated several unique services over the years. OrderWatch is a fully automated service that allows customers to receive updates about their orders by checking their e-mail accounts any time. CoreWatch is a similar service, allowing customers to track the status of outstanding printer cores. Designed as a money-saving step for customers, the program is intended to save thousands in lost core inventory.
In February 2001, Depot America explored a new area of focus — parts sales. Before that, the company had worked on the repair and exchange of sub-assemblies on printers, but last year the company moved into the arena of parts sales as well, becoming an Authorized Spare Parts (ASP) reseller for Hewlett-Packard. Shortly afterwards, ASPWatch was created, offering an automated process for HP-authorized service providers to report the fulfillment of their obligations directly to HP. Depot America reports purchases made by ASPs directly to HP. .”
Costa credits Leonard with constantly coming up with the new tools and ideas that keep Depot America in a front-runner position. “Bob is an idea machine,” said Costa. “He’s always pounding people for ideas, and looking for ways to differentiate.” .”
Depot's relationship with HP is definitely something Costa gives Leonard credit for. The relationship has grown over the years, beginning with base-level service support and culminating with the spare parts distribution status. “We are proud that we progressed to the next level with HP,” Leonard said..”
Leonard sees Depot America’s relationship with the OEMs as a second side of its business, offering customized solutions to manufacturers. Even before its relationship with HP, Depot America had cemented a relationship with Canon, in which Depot provides warranty service through Canon’s call center. And recently, Depot America became a Master Parts Distributor (MPD) for Lexmark..”
“That type of joint corporate effort between a large and small company is unusual,” said Costa, referring to the Canon relationship. “It’s really the first of that type. We’ve worked with Lexmark for nine years, in vendor/customer roles, but now together we’re expanding that relationship.”
“We’re in a place where we can work with Lexmark using our advanced logistics system and theirs to improve spares forecasting,” said Tiano, who is now Depot America’s executive vice president. “We have to demonstrate the additional value we can add beyond sending invoices. Beginning in 2002, we have become one of only 6 Master Parts Distributors for Lexmark. As we gain experience as a Lexmark customer, we’ll contribute value to Lexmarks’s efforts to make the MPD program more effective in servicing Lexmarks’s printer customers.”
Depot America would also like to expand its relationships with remanufacturers.
“When we look at the recharger market, we see a tough, demanding customer who has grown increasingly more sophisticated,” said Leonard. “A lot of them don’t realize we are a one-stop source for new parts, exchange and repair. We want them to take another look at us.”
“We’re always looking at ways to partner with the remanufacturer,” he said. “We want them to re-look at Depot — where we are and where we’re going. We have a lot to offer.”
One thing Depot America offers is an in-house, four-person engineering team. This allows the company to reverse engineer printers, so as they come out of their warranty periods, the company is ready to provide its services.
The company also has strict quality-control standards, with three independent quality assurance checkpoints. Everything is tested multiple times before it goes out the door. Fusers, in particular, are tested three times. “We test everything,” said Leonard. “The products we offer need to last through our one-year guarantee, so we manage quality very tightly. We provide only the highest-quality outcome.” Quality is obviously very important to the staff of Depot America, especially in a competitive market. “We have good competitors,” said Costa. “We’re always looking for the opportunity to out-perform them. We admire them, and are always thinking of what we can do to differentiate ourselves. We won’t have our marketplace seeing us as the same shade of gray as everyone else.”
Did Costa ever really envision this type of success for his company? “You know, when we first started, I was talking to a friend, and he said to me, ‘Someday you’re going to have 100 employees. You’re going to have so much business it’ll make you crazy.’ I said, ‘You’re nuts!’ And look — it happened!”
What does the future hold for Depot America? “You can’t really imagine what you’ll be doing in 10 years. More of something, that’s for sure,” said Costa with a laugh. “When you build a building you want to expand the volume to fill it, and we’re continuing to grow and enlarge our capacity.”
Will the company continue to focus only on printers? “No,” said Costa emphatically. “We offer a diversified menu of services that other companies can’t provide. We have the ability to do high-volume service with system connectivity. I see us remaining in the consumer electronics area, but definitely extending our lines to other manufacturers and service companies in different product fields. “We have a lot of diversified offerings for the OEMs in the management of warranty and service programs.”
With its dedication to quality and determination to grow, Depot America has proven that it is a company worth another look. Between Costa’s drive, Leonard’s constant influx of ideas, Tiano’s finely-tuned operations engine and a staff working to maintain a reputation for quality, Depot America is likely to be providing solutions for consumers and manufacturers for a long time to come. |
