Role Model
Courage of Conviction
Vinod Mulchandani, Founder Director of Mumbai-based sub-distributor Aarvee Computers believes that success follows those who have the courage to act on their convictions
By Tabrez Khan
Vinod Mulchandani, the founder of Aarvee Computers, is a professional whose successful entry into IT entrepreneurship was based entirely on what he calls his courage of conviction. He did not enjoy a strong or even moderate financial backing—his business was started on a budget of Rs 1,000 borrowed from his father—but had a lot of conviction.
Mulchandani began his career in 1992 as a sales executive in a relatively small IT firm, Sound Solutions. His panache for marketing and relationship building quickly catapulted him to the post of marketing manager. His growing expertise and talent in selling IT was soon recognized by others, and he was taken in as a partner by Pixtel Computers, which was then importing IT components. However, Mulchandani was not satisfied with being just a junior partner in the firm, especially since the knowledge and relationships he had built by then were extensive.
“I used to be the main driving force behind Pixtel’s sales because I knew all the dealers. Due to the good network of contacts I had built I could sell stocks fast and in considerable volumes. One of my friends and I therefore decided to earn for ourselves rather than for others,” recalls Mulchandani.
Rocky beginning
Although the friend did not eventually join him, Mulchandani ventured out on his own, leaving behind a secure job. He launched Aarvee Computers in April 1997 at the young age of 27. The company initially dealt with Seagate hard disks and Intel CPUs; it soon added scanners and modems to its portfolio. Aarvee struck its first deal with Systematics which billed them their first material.
This was followed by Aarvee becoming an authorized dealer for Umax scanners. After this there was no looking back as the Mumbai-based sub-distributor tied up with a number of brands across imaging, printing, peripherals and supplies. Aarvee crossed a significant milestone when it tied up with Epson as an authorized sub-distributor for the latter’s imaging and printing products. It was the most prominent company Aarvee had allied with till then, and it set Aarvee on the fast track to growth.
However, a bigger milestone was still to come, and it happened when Aarvee became an authorized sub-distributor for HP’s imaging and printing business in 2004. “The HP sub-distributorship really strengthened our position. Today, we have a lot of products from HP in our portfolio,” Mulchandani informs.
On the shoulders of HP
Aarvee’s current portfolio is spread across peripherals, notebooks, desktops, supplies and warranty packs. HP as a brand contributes 90 percent of Aarvee’s business in terms of sales revenue. “We have the largest marketshare among all sub-distributors in HP printers and supplies,” Mulchandani says proudly. Epson, Dell and Sony are the other brands which Aarvee distributes, and they contribute the remaining 10 percent of the business.
In terms of revenue mix, printers, supplies and notebooks contribute 30 percent each, with 10 percent coming from miscellaneous products and services.
Aarvee Computers also functions as Epson’s authorized service center, and has won the best service center award for three consecutive years.
The sub-distributor has grown steadily, registering Rs 70 crore in turnover in FY2007-08. Although the turnover fell marginally to Rs 68 crore in FY2008-09 due to the global economic downturn, Mulchandani anticipates a rebound in FY 2009-10. “I am expecting to close this financial year with a turnover of Rs 75 crore, and we are on track for that.”
Mulchandani credits this growth to hiring the right people and providing them with ample training and growth opportunities. “Most of my employees have been working with Aarvee for more than seven years. The organization functions like a big family, and there is no undue pressure on anyone. Also, we have been able to train employees and provide them with unmatched opportunities for growth. Some of them, who started at entry-level positions, are now handling key responsibilities across accounts, billing and sales,” says Mulchandani.
Having grown his strength mostly by selling a single brand, Mulchandani is now keen to diversify his portfolio because he feels that doing so will improve his profit margins. He recently tied up with Sony to distribute their notebooks; he expects notebooks in general to be a growth driver for Aarvee. “Earlier, we were selling notebooks from a single brand. Today, we have added other brands such as Sony, Dell and Toshiba. Most of them are premium, high-value brands, and therefore provide healthy margins,” notes Mulchandani.
What’s in store?
Apart from notebooks, Mulchandani is upbeat about the prospects of his printer business. “Printing will never die, and printers will not go out of business any time soon. Currently, the demand for printers is being driven not only by business but also by the home segment and educational institutions. People are increasingly buying printers for their personal use, hence I expect the growth in printer demand to be extremely healthy in future.”
Mulchandani also plans to import components and possibly create his own brand. However, he says he is yet to chalk out a firm plan because market conditions remain unstable for any kind of new venture. He says selling in a market where the focus is solely on volumes is becoming increasingly difficult. “There is a lot of unhealthy competition among sub-distributors, which has led to the focus being solely on volume-selling instead of value. If the sub-distributor community can unite and benefit from cross-selling, we can derive better margins. Our margins are currently under tremendous pressure, and shrinking to abysmal levels. It’s like we are killing each other.”
Support system
‘Behind every successful man there is a woman,’ is an oft-repeated cliché, but it applies perfectly to Mulchandani. “My wife Simran has been a huge pillar of support for me, not only morally, but also as a contributor to my business. She is actively involved with the business, and handles HRD, finance and services, thus allowing me to concentrate totally on purchases and sales,” he says.
Mulchandani also ascribes his success to support from both his parents and his wife’s parents, as well as the staff of the organization.
“I’m not a person of very strong likes and dislikes, but I hate politics and also people who don’t have the guts to talk straight on the face,” remarks Mulchandani.
An enthusiastic surfer, he loves to frequent the beaches with his family, and is also a great cricket lover, like so many other Indians. Mulchandani is also fond of Hollywood movies, particularly action movies, with James Bond and the Transporter series being his perennial favorites.
He does not have a role model, but is inspired by Hindi film legend Amitabh Bachchan. “He’s a fighter who has seen lots of ups and downs in life, but emerged through them unfazed. He owned a company that went bankrupt, but made a comeback after repaying his debts and re-emerging as the iconic actor he has always been.”
Mulchandani himself would like to be remembered as a gutsy businessman who had the courage to act on his convictions. “I love challenges and I would like to take up some more, preferably in the interest of the larger sub-distributor community.” |