BIG DEALS, FAST COM­PANY

ADAM BROWN IS A MOD­ERN DAY TRADER WHO HELPED CAT­A­PULT GLOB­ALLY- FO­CUSED CLEAR­ANCE DIS­TRIB­U­TOR PROTEMPO INTO THE DELOITTE FAST 50 THREE YEARS OUT OF THE PAST FOUR. HE SHARES THE STORY BE­HIND HIS SUC­CESS.

NZ Business - - CON­TENTS - BY GLENN BAKER

Adam Brown, a mod­ern day trader who helped cat­a­pult glob­ally-fo­cused clear­ance dis­trib­u­tor Protempo into the Deloitte Fast 50, shares the story be­hind his suc­cess.

In his 1987 book The Art of the Deal, busi­ness ty­coon and US pres­i­dent Don­ald J Trump out­lines the key el­e­ments of deal-mak­ing. They in­clude think­ing big, know­ing your mar­ket, us­ing your lever­age, delivering the goods, con­tain­ing costs and, per­haps most im­por­tantly, hav­ing fun.

Adam Brown, Protempo’s founder and VP of sales and pur­chas­ing, may not wish to be com­pared with the con­tro­ver­sial pres­i­dent, but those el­e­ments are also ev­i­dent in how he ap­proaches the big clear­ance deals he mas­ter­minds around the world.

Of course, be­ing the down-to-earth Kiwi that he is, Adam also puts his com­pany’s suc­cess down to two at­tributes Ki­wis are known for – trans­parency and trust­wor­thi­ness. Two at­tributes that go down well over­seas, par­tic­u­larly with the Amer­i­cans.

Adam’s skill for ne­go­ti­at­ing deals helped pro­pel Auck­land-based Protempo into the Deloitte Fast 50 for three of the past four years, and will gen­er­ate a turnover well in ex­cess of $100 mil­lion in 2017.

But he shares the credit for Protempo’s re­mark­able per­for­mance with “a pas­sion­ate, dogged team of share­hold­ers and key staff, in­clud­ing the lead­er­ship team of Matt Duder (of eBoss fame), Mark Thom­son (founder of EFT­POS New Zealand) and GM Mark Priscott.

Protempo has two strings to its bow. The first involves world­wide clear­ance deals – mostly cen­tred on su­per­seded tech­nol­ogy. The com­pany buys ‘ trail­ing edge’ prod­ucts from par­ent com­pa­nies and dis­trib­utes them in new mar­kets with­out dis­rupt­ing es­tab­lished dis­tri­bu­tion chan­nels. Jaw­bone and Mi­crosoft are two of the high pro­file brands they deal with.

The sec­ond string involves ex­clu­sive dis­tri­bu­tion rights for new prod­ucts in New Zealand – such as Ama­zon’s Kin­dle and Protempo’s own brand of tablet called Ollee.

They also cus­tom build branded elec­tronic prod­ucts for clients, such as Te Wananga o Aotearoa.

So how ex­actly did the Protempo suc­cess story get started?

Turns out Adam’s been in the busi­ness of deals right from high school, where he traded stuff, such as sweets, at board­ing school. “My house­mas­ter and eco­nom­ics teacher made me keep a ledger and is­sue re­ceipts,” he re­calls. “If stu­dents com­plained about pric­ing, he’d say it’s sim­ple eco­nom­ics. Mar­ket forces de­ter­mine the price.”

Later Adam dropped out of univer­sity to

write a web­site for a liq­uida­tor to sell ex­cess in­ven­tory.

In De­cem­ber 2004, to­gether with his father Colin, he launched FirstIn, New Zealand’s first daily deal site.

“There I learnt a lot of hard lessons,” re­calls Adam. “But the key les­son from that whole ex­pe­ri­ence was that there aren’t many good deals in New Zealand. It’s a small mar­ket; dis­trib­u­tors don’t carry much ex­cess stock and they cer­tainly don’t want to up­set re­tail­ers.”

In 2006 Mark Thom­son in­vested in the busi­ness (the re­brand­ing to Protempo hap­pened in 2015). Adam’s been taking on board “the right peo­ple” ever since. Cur­rent staff num­bers run at 17, with a fur­ther half-dozen ‘lo­cals’ in five off­shore of­fices (they con­nect via reg­u­lar video­con­fer­enc­ing), and there’re plans to open of­fices in Asia and the Mid­dle East.

To­day, both the ‘dis­tri­bu­tion’ and ‘clear­ance’ as­pects of the busi­ness are core, although Adam per­son­ally fo­cuses on clear­ance deals, such as buy­ing elec­tronic prod­ucts from man­u­fac­tur­ers, pri­mar­ily in the US, and re­mar­ket­ing them to re­tail­ers both in the US (such as Best Buy and GameS­top) and in­ter­na­tion­ally. An ex­am­ple is a 2016 deal com­pleted for Jaw­bone, the fit­ness tracker brand, which in­volved $20 mil­lion worth of stock across sev­eral coun­tries, and sell­ing back into each of those mar­kets.

The big­gest sin­gle deal so far, says Adam, in­volved 40,000 speak­ers for Best Buy.

He says ‘buy­ing sea­sons’ are rolling around faster than ever, with Jan­uary/Fe­bru­ary the busiest time for Protempo.

Most of the com­pany’s deals are through dis­creet chan­nels, Adam ex­plains; they’re not there to rock the boat and de­stroy ex­ist­ing re­la­tion­ships. “We treat prod­uct like it’s our own. We’ve re-mar­keted some great prod­uct and great brands as a re­sult of do­ing what we say we will.”

Mak­ing a real ef­fort on pro­pos­als and pre­sen­ta­tions also pays div­i­dends, he adds.

As for whether the Trump ad­min­is­tra­tion will have an ef­fect on their US busi­ness, Adam be­lieves if any­thing it will im­prove sales. Mar­ket ner­vous­ness can lead to stock liq­ui­da­tions, as it did dur­ing the GFC of 2008/2009.

THE EVO­LU­TION CON­TIN­UES

Adam de­scribes the progress of Protempo as “evo­lu­tion­ary” – but it very much hinges on their US con­nec­tions. He and his wife Alla are mov­ing to Or­ange County, South­ern Cal­i­for­nia in April to fur­ther ce­ment those ties, help set-up their own ware­house (a ne­ces­sity now they’re an of­fi­cial ‘op­por­tu­nity buy’ ven­dor for Wal-Mart) and, most im­por­tantly, spend more time to­gether. “In 2015 I spent more time in the US than I did in New Zealand,” he ad­mits.

Although growth has been im­pres­sive, Adam says they’re look­ing to ramp up sales ca­pac­ity even fur­ther. There is plenty of room for ex­pan­sion.

“We’re see­ing that al­ready. At the CES Show, for ex­am­ple, we’re get­ting global con­tracts with some pretty big brand names. They’re look­ing for a holis­tic so­lu­tion to man­age their global ex­cess as­sets with min­i­mal dis­rup­tion to their sales chan­nels.”

Us­ing the NetSuite cloud based ERP plat­form also makes life eas­ier, Adam ex­plains. It’s a global sys­tem favoured by many of their multi­na­tional clients and makes stock trans­fers and track­ing easy. “It was ex­pen­sive to de­ploy but has more than made up for that in ef­fi­cien­cies.”

His team has to think fast in terms of cur­ren­cies too. For ex­am­ple, post-Brexit, they in­vested heav­ily in stock from the UK and Europe, and sold it later in US dol­lars.

“We have to play those fluc­tu­a­tions as much as pos­si­ble,” says Adam. “And that’s where our global pres­ence gives us the ad­van­tage.”

He’s grate­ful for the sup­port from ASB. “They’ve helped with se­cured trade fi­nance when nec­es­sary, and when we piv­oted from retail to global dis­tri­bu­tion, they helped us buy stock.”

CFO An­drew Preiss, re­cruited from the UK, has also played a vi­tal role by trans­form­ing Protempo’s fi­nanc­ing and bank­ing ar­range­ments.

The busi­ness has de­liv­ered its highs – such as se­cur­ing the first deals with Best Buy and Jaw­bone – and its lows. Adam re­mem­bers in the early days los­ing “hun­dreds of thou­sands of dol­lars” on a Euro­pean com­pany that went into liq­ui­da­tion. Fam­ily and share­hold­ers were forced to put ‘hands in pock­ets’ to keep the busi­ness alive.

Need­less to say, trade credit in­sur­ance has been a re­quire­ment on ev­ery deal since.

De­spite hav­ing Fast 50 sta­tus, Adam de­scribes Protempo as a “13 year overnight suc­cess”. His pre­dic­tion? Per­se­ver­ance and fol­low­ing the mantra of “do­ing good busi­ness does good busi­ness” will lift them to a $200 mil­lion-plus com­pany in five years.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.