Slumpbuster: Used IT equipment for cheap

This Minnesota firm is cashing in on hot demand for inexpensive, secondhand IT equipment.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

vibrant_tech.03.jpg
Jennifer Larson has stacked used servers up to the rafters.
How confident are you in the stock market?
  • Very
  • Somewhat
  • I've pulled out all my money

(Fortune Small Business) -- Move faster and take more risks. Those are lessons that Vibrant Technologies CEO Jennifer Larson learned during the dotcom bust. So when she saw the beginnings of an economic slowdown last year, Larson was ready to pounce by acquiring new inventory for her company, which sells used IT equipment.

The Minnetonka, Minn., firm earmarked $1 million for a buying spree, scooping up used routers and servers on the cheap as companies began downsizing and selling off unneeded equipment. Increasing her stockpile of goods from $3.5 million to $4.5 million leaves Larson prepared for the crush of IT brokers and other firms looking for refurbished units to outfit their offices at a discount. She is also bolstering staff to 50 from 40 to handle the rising volume of orders and boosting the marketing budget 25%, to $500,000.

As a result, Larson anticipates 2008 revenue of $52 million, up from $45 million last year, and expects sales to explode 40% in 2009.

"I believe our strategy is going to work because I know what our clients are looking for this time," says Larson, 36.

Larson knows that her situation is unique because demand for her products spikes during downturns. But she also knows that just like other small-business owners, if she doesn't innovate and implement smart growth strategies, the slumping economy could crush her. In 2001, Vibrant was inundated with customers but struggled to manage its growth, and the company failed to gain as much as it should have in sales and profit margins.

"I don't want that to happen again, where I feel we are scrambling to help people and working 80 hours a week," Larson says. "I'm too old for that now."  To top of page

Have you cut costs by buying secondhand equipment? Join the discussion.

Defying the downturn: 5 strategies

Poll: Small-biz owners down on economy, working longer hours

Dino diner: To beat the economic slump, a California diner invests in monster marketing campaigns. The latest: dinosaurs and King Kong.
To write a note to the editor about this article, click here.




QMy dream is to launch my own business someday. Now that it's time to choose a major, I'm debating if I should major in entrepreneurial studies or major in engineering to acquire a set of skills first. Is majoring in entrepreneurship a good choice? More
Get Answer
- Spate, Orange, Calif.
The 13 most WTF gadgets From the weird to the gross, these 13 gadgets will make you wonder why they even exist. More
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.