Interview: NBG

We talk to National Buying Group MD Phylip Morgan
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To those unfamiliar with NBG, how would you sum up what it is you do?

We market ourselves as the UK’s premier IT buying group. Although we were established as a buying group we now offer additional services to our member companies that are based in key geographical locations in the UK. Those are sales services, marketing services, procurement services and things like that.

So you are primarily a buying group?

Purchasing is a big focus of our group, yes. But I would say negotiating together is more of a phrase that we would use rather than buying together. We don’t just buy, we market together, we network together, we innovate and exchange ideas together, so the group is probably more important than the buying.

So, one half is the conglomerated buying power of your members, the other half is networking – what tangible benefits are there to the latter?

We have an acronym called CIA, which defines us. It stands for collaborate, innovate and accelerate.

We get together with companies from various parts of the UK, a mixture of B2B and B2C businesses, and we learn from each other, and think about the ways we can grow.

We also have joint marketing initiatives – we have three different publications we put together, and we meet together five times a year. We have our gala, which has just taken place, and an exhibition for vendors on the afternoon before. On the day after we have a meeting as to where we see the market going and how we think it will affect our resellers.

You started in 1996 as a smaller operation – who initially formed the group?

I think the group was together as an ad hoc type of group, more relationally than anything else. In 1996 it was formalised into a limited company. Then we started charging things like membership fees to be able to run the group, and from there it’s progressed to where it is today – a group with over £160 million of purchasing power.

How many members do you have?

We’ve just crossed 50 members. As you know I was taken on from February 1st to bring the group forward. At the time I joined, there were 43 members, and we will have 60 members by the end of this year. Additionally, by the end of next year we will have 100 members.

What’s your typical type of member?

It varies really. The B2B resellers tend to have a larger model than the retailers, but we also have some sizeable retailers in the group that have three or four stores. The smallest member we have does about £1 million in annual turnover. Our largest is probably Xenex in Birmingham, which is approximately £26 million strong.

What would happen when you join the group is that you would have geographical exclusivity in your area. Therefore, if you were in Eastbourne, you would have exclusivity for a 25-mile radius. So in our recruitment, we are looking for key dealers, around the CIA acronym again. We want a dealer that is willing to share, rather than just take all the ideas from the group. We also want a dealer that’s looking to innovate, rather than do what was done last year. If we do what was done last year, we only get last year’s results. So we’re looking to grow the group, and lastly we’re looking for somebody to accelerate and grow their business.

So, somebody who has maybe paid the mortgage, got the Bentley, and seen it out because he has got his golf club membership, that type of dealer is unlikely to join our group based on our criteria.

There are a few buying groups out there – what differentiates you from the other active groups in the UK?

Other groups tend to have a message, which is ‘join us, join us, join us’. We haven’t got that same message. Ours is, come and talk to us, because we’re very exclusive in the type and nature of the dealer that we want to take on board.

And that’s because of the niche where we position ourselves in the market in terms of size, scale, geography, and then we focus with the vendors.

So you’d say you’re much more selective on whom you take on board than other buying groups?

That’s right. I’ve had 40 enquiries since I’ve been on board, of which only six have been taken on. So that would have been because there’s a dealer nearby, maybe they’re not large enough yet, or they haven’t been established long enough. We want people that have been around a while and have got a good reputation in their area.

Where do you want to be in five years time?

It’s good to have a long-term plan. We’re already a force within the industry, but we’d like to be the biggest customer of Ingram Micro, which is the biggest IT distributor in the UK. So that’s the kind of volumes and goals we are heading for.

But at the same time, we don’t want to lose part of what is a culture in this group, which is good local businesses in key geographical areas providing great service to businesses that need help and support from the industry. I would like to think we have a part in cleaning up the industry as well, and get rid of its reputation for being close to car salesman and double glazing salesman in the past. In five years time, NBG is going to be something vendors will associate with quality dealers.

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