The wireless accessories market has experienced explosive growth in recent years, and Xentris Wireless has expertly navigated this expansion alongside its prominent clients, including major retailers like Best Buy and telecommunications giants such as Verizon. Founded in 2003, Xentris Co initially concentrated on product-based solutions. However, the company has strategically transformed its business platform, demonstrating remarkable agility in adapting to the evolving demands of its clientele and solidifying its position in the competitive landscape.
Xentris Wireless offers a comprehensive suite of wireless solutions, broadly categorized into three key areas. The first pillar is product development, showcasing their expertise in creating cutting-edge wireless gadgets. This is supported by their extensive 132,000-square-foot manufacturing and warehouse facility located in Addison, Illinois, highlighting their commitment to in-house capabilities and quality control.
The second crucial category is marketing services, where xentris co extends its support beyond product creation. They expertly handle marketing initiatives for their clients, encompassing everything from developing compelling product launch materials to designing effective store plan-o-grams and producing impactful sales sheets and promotional content. Furthermore, Xentris’s marketing prowess includes assisting customers in crafting product packaging that not only meets stringent display requirements but also strategically enhances sales performance, demonstrating a holistic approach to product success.
The third essential category focuses on the logistical backbone of the business. President and CEO Bill Christy emphasizes the significance of the logistics aspect, stating, “We are equipped to handle the packaging and most of the distribution.” However, he also points out the significant shift in distribution practices within the retail and carrier industries over the past decade. The traditional warehousing model has largely been replaced by more dynamic and direct shipping methods.
Many of xentris co’s clients now prefer direct sourcing from overseas manufacturers, particularly in China, and subsequently partner with Xentris for services ranging from product acquisition to packaging and comprehensive logistics management. This reflects a move towards leaner inventory management and just-in-time delivery models in the industry.
“Our customers increasingly don’t want to warehouse the products themselves,” Christy explains. He further illustrates the evolving distribution landscape by noting, “In addition, rather than shipping 100,000 widgets to Best Buy’s distribution center, we’re now shipping 25 widgets each to 4,000 store locations.” This granular distribution model necessitates a highly efficient and adaptable logistics system.
Navigating Distribution Evolution with ERP Innovation
This significant shift in distribution strategies, characterized by smaller, more frequent shipments to numerous locations, hasn’t necessarily reduced the overall volume of products Xentris Wireless handles for its clients. For instance, in the case of Best Buy, the total product volume remains substantial, around 300,000 units. However, the complexity of packaging products to specific coding requirements and managing shipments to thousands of individual addresses significantly amplified the workload. This new paradigm placed considerable strain on the company’s 54 full-time employees, potentially hindering their ability to focus on core strategic activities.
While Xentris Wireless successfully managed to keep pace with the escalating demands, it came at the cost of diverting employee focus from crucial areas like product development. Recognizing the need for a sustainable solution, the company undertook a significant operational overhaul in 2010, investing $1 million in implementing a state-of-the-art Enterprise Resource Planning (ERP) system. Christy highlights that the Epicor ERP system was strategically implemented to empower employees to concentrate on their specialized roles, such as product innovation, rather than being bogged down by inefficient, manual processes aimed at merely keeping up with order fulfillment.
“There were a lot of secret handshakes; one group didn’t know what the other had to do to make things happen, but everyone here is incredibly dedicated to their jobs and the success of the company, so they did it,” Christy acknowledged, reflecting on the previous operational challenges. He emphasized the critical need for system modernization, stating, “It had gotten to the point where it was incredibly time consuming to do these multiple ship-to orders, and we realized the only way to do it without error was to invest in a new system and change the way we ran the company.”
The ERP system, launched in May, marked a transformative change for xentris co. While system implementations are often complex and challenging, the necessity for this upgrade was underscored by increasingly intricate deals, such as fulfilling a single order of Motorola products to 200 to 300 distinct military addresses. Without process optimization, handling such complex logistics would have become unsustainable for future growth.
Furthermore, the new system strategically positions Xentris Wireless to effectively manage its burgeoning online sales channels. A prime example is their management of online sales for BestBuy.com, encompassing the creation of exclusive online deals and the coordination of direct-to-consumer shipments. This demonstrates xentris co’s adaptability to the expanding e-commerce landscape.
“It’s not a new business segment for us, but it’s grown significantly,” Christy stated, emphasizing the escalating importance of online retail. “A year ago, we would have had 20 sales a week; now we’re doing several hundred a week,” illustrating the exponential growth in their e-commerce operations.
Embracing a Hybrid Strategy for Continued Growth
Beyond the burgeoning e-commerce sector, Xentris Wireless is experiencing robust growth in traditional retail channels. Their partnerships with major retailers like Radio Shack and Best Buy have witnessed year-over-year growth in the hundreds of percentage points. “We’re getting stronger with them because we’re not only designing product that carries the Xentris brand, we’re also packaging their private label brands and manufacturing them,” Christy explained. This diversified approach strengthens their retail partnerships and expands their market reach.
In their collaboration with Best Buy, xentris co manufactures products under Best Buy’s private label, Rocket Fish brand. Interestingly, Best Buy assumes ownership of the product in China and manages the subsequent distribution process. Conversely, when Xentris Wireless manufactures products under its own brand, Xentris, it manages the import and distribution according to the retailer’s specific requirements. A similar private label manufacturing and service model is in place with Radio Shack, showcasing the flexibility and adaptability of xentris co’s business model.
“Our approach is unique,” Christy asserts, highlighting their strategic advantage. “It’s a hybrid method of using the old business strategy and what’s evolved from our customers’ needs.” This hybrid approach, blending traditional strategies with innovative adaptations, positions Xentris Wireless for sustained success.
From the carrier side of its business, Xentris Wireless has maintained a long-standing and significant relationship with Verizon. Christy notes that the Verizon account alone provided substantial business volume for the $150 million company. However, to maintain a competitive edge and diversify its revenue streams, xentris co strategically expanded its carrier partnerships to include mid-tier players such as Cricket, Go Wireless, and Wireless Zone.
While these mid-tier carriers have fewer individual store locations (between 400 and 1,000), their collective purchasing volume is significant enough to fuel continued growth for Xentris Wireless. Furthermore, Christy observes a cyclical trend where larger carriers periodically explore direct sourcing for commodity products.
“We saw the writing on the wall that we were going to lose some of the commodity business, but there’s a huge market for it in the mid-tier carrier market that would love to have these products,” he explained, demonstrating proactive market anticipation. “However, we continue to service the Verizons and AT&Ts and focus on the new, innovative items coming through the wireless industry,” reinforcing their commitment to both established partnerships and future-oriented innovation. Xentris co’s journey exemplifies the importance of business evolution and customer-centricity in achieving sustained success in the dynamic wireless accessories market.
