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Buying Group Looks To Boost Retailers' Power

9/03/2001 02:00:00 AM Eastern

Ultimate Computer Strategies, a group purchasing company, said it has exceeded $300 million in purchasing power and is now representing dealers from across the country.

The group is headed by Jeffrey Kirshblum, former VP, marketing and purchasing for Nationwide Computer, Edison N.J. and claims to be unique in that it acts as a buyer for retailers and also negotiates merchandise discounts, rebates, promotional opportunities, and coop/MDF funding, and handles all related paperwork.

"We are actually an extension of the retailer," said Kirschblum, noting, "We do the buying and merchandising, and the retailers do what they do best, which is sell." He added that Ultimate is able to give a small retailer the buying clout of a national chain and secure brands from suppliers that would typically shun a small independent.

"Everyone believes the 80/20 rule — that 20 accounts represent 80 percent of the business. But if you look closely at the point-of-sale reports, a lot of the business is being done by retailers that people never heard of. They don't have multiple stores so the manufacturers don't know they exist and they don't have the bandwidth to go after them," he explained, adding, "Toshiba says we have become their largest dealer on the East Coast for digital cameras."

The company was formed in early 2000 and has retailer accounts including Comp-U-Plus, Monsey, N.Y, Everything Computers, Suffern, N.Y., Harmony Computer, Brooklyn, N.Y., Innovation, Miami, Fla., and PC University, Long Island City, N.Y.

Kirschblum said Ultimate's stores have increased gross profit margins over 15%, and their marketing and advertising funding increased by over 35 percent in the past year.

"The manufacturers like us because we can give them point-of-sale reports and one of the hardest things, from a manufacturer's standpoint, is getting proof of purchase. I can get it for five different companies at once. For the stores, I can get a lot of authorizations which they can't get on their own," said Kirshblum.

Ultimate's goal is to reach a buying power of $ 500 million by year's end.

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