SED Changes At The Top As Its Business Grows

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TUCKER, GA. — SED International, the 30-year old distributor of CE, computers, small appliances and cellular products in the U.S. and Latin America, has undergone several changes at the top as its business expands.

Starting at the top, Jonathan Elster, a 15- year veteran of SED and its president/COO, was named president/CEO right around this year’s International CES, succeeding company co-founder Jeanie Diamond, who retired in December. He was also recently elected to the company’s board.

Since then, Elster and SED has made it a mission to “upgrade our management,” as it told TWICE last week for the challenges and opportunities that are emerging. In February, SED hired Daniel Greenlee as domestic sales VP; he was previously sales VP at DBL Distributing. Elster said that Greenlee is not only an expert in CE and IT, “he is an expert on call centers. We need to grow our customer base and work closer with them to take us to the next level.”

Last week, SED announced the hiring of Jim Overwyk as operations VP, a 30-year operations and customer-service veteran; he will oversee the distributor’s U.S. operations and the implementation of new initiatives.

Elster noted, “Jim has both IT and HR experience. With very thin margins, operations is a critical area nowadays. We have to be very lean and efficient to take the company to the next level. Our business is growing. What is especially critical is making drop ships for our dealers. Jim is an expert in this field.”

When asked if SED will make more additions to its management staff, Elster noted, “We have an excellent management team, but we will upgrade if the opportunity arises. Our No. 1 goal is servicing both retailers and suppliers.”

And SED has an experienced and longtenured staff. It has 200 employees in the U.S. and another 160 or so in its operations in Argentina and Columbia. “Tenure is important. Relationships are key in this business. I have been here 15 years and we have employees who have been here 10, 15 or 20 years. We must sustain and build profitability for our customers and shareholders, and that’s what we do on a daily basis,” Elster said.

To become more profitable and grow its business, Elster said that SED is presenting “broader … stronger lines” of products from existing suppliers rather than adding lines just for the sake of adding them. “We have to give our suppliers a full commitment. If we can’t, there is no reason to talk.”

SED has had double-digit growth in computer products and 156 percent growth in CE year on year, with the latter achievement based on “TVs, of course, but we are looking to sell more accessories — more mounts, cables and sell more digital cameras.”

And SED is also looking at offering their retail customers more inventory management, reverse logistics and warranties, Elster said.

The “driving force” for its business lately has been “netbooks and laptops, as well as LED TVs from Samsung and LG. Handheld camcorders like Flip have been strong for us for the ‘Dads and Grads’ season coming up,” Elster said. “The ereader category with products from Audiovox and others, as well as digital cameras from familiar names like Polaroid, have been important.”

On new technologies, Elster said that there is “a buzz about 3D TV with everyone talking about it … vendors, retailers and consumers. It might be bigger than expected” and that buzz should bring “more consumers to retail stores to see demonstrations. More traffic always helps.”

As for the iPad, while SED is not an Apple distributor, “it too will create a buzz, and we’ll probably sell some accessories for iPad.” During the summer and the fourth quarter, Elster sees Mobile TV as driving the business with new offerings in the category set to debut.

But with a sluggish economy to say the least, is there enough business out there for independent and regional retailers? Elster said that when you look at those dealers, “they are surviving in tough times. They are selling bigger TVs and selling product vs. selling on price. We partner with the Nationwide Marketing Group and we had a very successful show with them.”

He stressed that independents are making “value-added sales,” and that SED is still on the lookout for them to “get involved in new categories.” Maybe for some it might be small appliances, which is part of SED’s line and which carries product from Panasonic, among others.

Making value-added sales and looking to carry new categories are more critical than ever given the ongoing market share battle between Best Buy and Walmart, which can take down regional and independent dealers.

Elster’s view is that manufacturers are “providing independents with different models and derivative SKUs [in certain cases] to offer value-added opportunities. For the most part, they have done a good job in trying to control the situation.”

But for SED and Elster’s management team, the bottom line is still the same, no matter the changing marketplace — “to support our customers and bring them new opportunities and solutions for their businesses.”


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