The wireless accessories sector has witnessed explosive growth in recent years, and Xentris Wireless has expertly navigated this expansion, partnering with major players like Best Buy and Verizon. Established in 2003, Xentris began with a strong focus on product solutions. However, the company has strategically transformed its business platform to proactively address the evolving demands of its clientele.
Xentris offers a comprehensive suite of wireless solutions, primarily categorized into three key areas. Firstly, their prowess in product development is evident in their state-of-the-art, 132,000-square-foot facility in Addison, Illinois, where they manufacture cutting-edge wireless gadgets.
Secondly, Xentris provides extensive marketing support to its clients. This encompasses a wide range of services, from crafting compelling product launch materials to developing effective store plan-o-grams, sales sheets, and comprehensive marketing and promotional assets. Furthermore, Xentris excels in creating product packaging designs that are not only visually appealing and display-ready but also strategically engineered to drive sales.
The third critical aspect of Xentris’s business, as highlighted by President and CEO Bill Christy, is their robust logistics infrastructure. “We are fully equipped to manage packaging and a significant portion of distribution,” Christy explains. However, he notes a significant shift in retailer and carrier distribution methodologies compared to nearly a decade ago.
The traditional warehousing model is becoming increasingly obsolete for many companies. Some of Xentris’s clients are now opting for direct sourcing from overseas manufacturers, subsequently engaging Xentris to procure or receive these products from China, handle packaging, and manage the intricate logistics involved.
“Our customers are showing a growing preference to avoid warehousing products themselves,” Christy states. “Moreover, instead of large bulk shipments, like 100,000 units to a central Best Buy distribution center, we are now frequently handling shipments of smaller quantities, such as 25 units, to each of 4,000 individual store locations.”
Navigating the Shift in Distribution Dynamics with Xentris
This evolution in distribution practices, characterized by smaller, more frequent shipments to diverse locations, hasn’t necessarily reduced the overall volume of products Xentris handles for its clients. For instance, in the case of Best Buy, the total product volume remains around 300,000 units. However, the complexity of packaging products to specific coding requirements and managing shipments to numerous addresses significantly amplified the workload for Xentris’s team of 54 full-time employees.
While Xentris successfully met the surging demands, it came at the cost of diverting employee focus from their core responsibilities. Recognizing the need for a sustainable solution, Xentris invested in a $1 million Enterprise Resource Planning (ERP) system throughout 2010 to streamline its operations. Christy emphasizes that the implementation of the Epicor system empowers employees to concentrate on their primary roles, such as product innovation, rather than being bogged down by manual processes to manage demand fluctuations.
“Previously, operational processes relied heavily on informal, tacit knowledge; workflows weren’t always transparent across teams. Despite this, our team’s dedication to their roles and the company’s success ensured smooth operations,” Christy acknowledges. “However, managing these complex, multi-destination shipments became excessively time-consuming. We realized that investing in a new system and fundamentally changing our operational approach was the only way to maintain efficiency and accuracy.”
The new ERP system, launched in May, represented a significant organizational change, a process known to be challenging for any business implementing a comprehensive IT management system. However, with increasingly complex orders, such as shipping Motorola products to 200 to 300 military addresses for a single order, adapting processes became essential for Xentris‘s continued progress.
The enhanced system also positions Xentris to effectively manage its burgeoning online sales channels. For example, Xentris manages online sales for BestBuy.com, developing specific online sales promotions and coordinating direct-to-consumer shipments.
“While e-commerce isn’t a completely new area for us, it has experienced substantial growth,” Christy notes. “Just a year prior, we were processing around 20 online sales per week; now, we are handling several hundred weekly.”
Xentris’s Hybrid Approach Fuels Growth Across Sectors
Beyond online retail, Xentris is experiencing robust growth in traditional retail partnerships. Their accounts with major retailers like Radio Shack and Best Buy have demonstrated triple-digit percentage growth year-over-year. “Our partnerships are strengthening because we are not only designing products under the Xentris brand, but also managing the packaging and manufacturing of their private label brands,” Christy explains.
In the collaboration with Best Buy, Xentris manufactures products under Best Buy’s Rocketfish brand. Best Buy assumes ownership of the product in China and manages the subsequent stages. Conversely, when Xentris manufactures products under its own brand, Xentris manages the distribution from its center, adhering to retailer specifications. This model is also applied to Radio Shack’s private label products.
“Our approach is distinctive,” Christy emphasizes. “It’s a hybrid strategy that blends established business methodologies with adaptations driven by our customers’ evolving needs.”
From a carrier perspective, Xentris has maintained a long-standing and significant partnership with Verizon. However, to maintain a competitive edge, Xentris has broadened its carrier portfolio to include mid-tier carriers like Cricket, Go Wireless, and Wireless Zone.
While these mid-tier carriers have a smaller store footprint (400 to 1,000 stores), their collective purchasing volume contributes substantially to Xentris’s growth trajectory. Moreover, Christy observes a trend of larger carriers periodically sourcing commodity products directly, a cyclical strategy to assess market dynamics compared to previous direct-commodity cycles.
“We anticipated a potential reduction in some commodity business from major carriers. However, a substantial market exists within the mid-tier carrier segment that highly values these products,” he states. “Nevertheless, we remain committed to servicing Verizon and AT&T, while simultaneously focusing on the continuous stream of innovative products emerging within the wireless industry.” Xentris Wireless continues to demonstrate its adaptability and strategic foresight in the ever-evolving wireless accessories market.
