'We are here to sell our products, not to fight for either of the processor companies'

The founder of Intelisys, Ameet Arurkar is young, dynamic and raring to go. A mechanical engineer from Bangalore University, Ameet started his career in Welpac, where he was in-charge of the imports of plastic products. Four years later he moved to Bell-o-Seals Valves as the marketing director. But IT was where his heart lay, and he set up Intelisys India in 1999. Today the company distributes various brands of IT products as well as its own range of PCs -- Amdell. Ameet tells DQCI how he plans to engage over 50 white goods showrooms in Mumbai to showcase and sell his PCs.

What was your objective when you set up Intelisys two years ago?

When I started Intelisys back then, I wanted to make the company one of the top 10 distributors in India within the next three years. We already have several brands in our product portfolio today and plan to add some more. We have an office as well as a warehouse in Bangalore, besides our head office in Mumbai. We also have a PC manufacturing unit at Daman, Gujarat and will soon open another one at

Parwanoo. 

What plans have you outlined for the current fiscal?

This year is very important for us. During this fiscal we plan to open another 20 offices with leased line connectivity and implement ERP. These offices, which will double up as support centers, will be targeted at cities like Hyderabad, Pune, Baroda, Ahmedabad, Cochin, Jaipur, Lucknow, Chattisgarh, Chandigarh, Patna, Mangalore, Guwahati and Panjim, besides the metros. 

We already have our own B2C web site, www.amdell.com. But at the moment customers cannot pay online. We hope to start this facility as soon as payment gateway issues are resolved. 

You started IT trading as a distributor for NeST PCs. What went wrong?

Intelisys was set up with a certain vision and had commitments towards the IT industry. The company was focused on becoming a national distributor of computer systems, peripherals and other IT related products in India. Our tie-up with NeST was towards this end.

NeST was a great experience for me about what not to do. But I did meet a lot of partners because of NeST and most of them are still with me. NeST is a south-India based company, selling at very good margins, while other indigenous PC vendors sell at only three to four percent margins. There was a lot of competition for the brand in the market, but still I pushed a lot of their products in the market. 

But one fine day, they increased their price by Rs 3,000 per machine, which is almost 10 percent of the total machine. So that was when I stopped pushing NeST aggressively in the market. I am still their distributor on paper, though their sales are not happening much.

And what did you do after NeST?

We had an organization and we did not have a good product. So I started off with Buddy's, a PC clone that converts one PC into two machines. Buddy became a big hit as it was priced at just Rs 8,000. And then I decided to assemble my own machines. This again became a big hit, because of good prices and bundling offers. 

Later we started our own brand, 'Amdell'. Even the name reflects our commitment to AMD processors. What we are doing

right now is appointing dealers. 

What are your plans for Amdell?

We intend to increase the sales of Amdell and the best way to do this is by bringing the prices as low as possible. Currently we provide machines for as low as Rs 19,500. Besides, we also give our customers the chance to exchange their old machines of any brand for new Amdell machines. This is bound to push the sales of our PCs.

There are many branded machines around. How do you plan to find a footing for Amdell in the market?

Though there are many PC brands in the market, few of them are AMD machines. This will be our differentiating factor and will help us in positioning our brand. In fact AMD is giving a link to us on their worldwide web site. 

Besides, the big guys have big overheads and expenses and are very slow to move because of their size. We are banking on our speed to adapt to changes and our close relationships with dealers. 

Does this mean that you do not sell Intel-based machines at all?

We do sell Intel-based machines when our customers demand it. Frankly speaking, we are here to sell our products, not to fight for either of the processor companies. 

You had mentioned your plans to provide machines at prices as low as Rs 10,000? How do you plan to manage this feat?

We will be introducing PCs ranging from Rs 10,000 to Rs 15,000. These machines will be imported from China. The prices will be cut down simply because we will provide everything within the monitor itself. This means that the PC will consist of a monitor that will contain the embedded motherboard. This way we save on the cabinet cost. Also we will provide Linux as the standard OS, which again is free. 

We are trying to give the masses PCs at the price of a TV. These machines will be distributed by all white goods showrooms and we will provide the service. In my belief the only way IT business can grow is when masses as well as the classes are catered to. We already sell to numerous corporates. Now we have decided to concentrate on masses as well. The corporates will be the creme' de la creme' of my revenue, while the entry-level sales will be my dal

roti. 

How do you intend to provide margins to your dealers by selling PCs at such low prices?

Our PC at Rs 15,900 offers a 10 percent margin to the dealer, which is very good in contemporary times. Even big names like Compaq and HP do not provide such margins to their dealers. In fact, I will go to the extent of saying that we are paying the highest margin among all brands. 

How big is your channel network in India?

At present we have 150 channel partners all over India. We plan to increase this to around 200 by the end of this year. We treat our dealers like a member of our family. We do not dump stocks on them and help them out in their problems. That is why they like trading with us. To give you an instance, one of our good dealers was stuck with a lot of stocks when priced dropped in the month of March. We helped him to move his stocks upcountry through our offices. Today he is one of star dealers.

Which are the products that you are currently distributing in India?

We distribute brands like Ace data communication products, AMD processors, Buddy PC clones, Microtek monitors, Simmtronics motherboards, Linux OS, Compubell PCs and HCL Infinet Internet packs. In addition to this we also distribute Transcend, Webramp, Netlinker, Atrie, Best Data etc. We did not want to stick to selling a particular product segment, which is why we carry a wide portfolio comprising PCs, processors, motherboards, monitors, memory modules, modems, NICs, hubs, switches, ISDN terminal adapters, routers, cable modems, leased line equipment, software, Internet connection packs, and PC clones. It is our plan to become a one-stop distributor, which is why we will soon add other products like hard disk drives, cabinets, laptops, printers etc.

How has the market slowdown affected your business? 

What slowdown? We have witnessed a boom in our business in the last quarter.

Vinita Suvarna-Bhatia in Mumbai