Computer cataloger Insight Enterprises is setting its sights on global expansion. Having posted a profit on its Canadian division just six months after its October 1997 launch, the $628 million computer reseller is crossing the Atlantic Ocean. In early April, it acquired $60 million U.K. computer direct marketer Choice Peripherals Ltd. for $6.2 million in cash and stock. (Included in the deal was an 85% stake in U.K.-based Plusnet Technologies, an Internet service provider and Website hosting and development company, which Insight might sell or spin off in the future.)
Between its Canadian venture and Choice, this year Insight expects to generate at least $100 million in sales from outside the U.S.-a prediction observers believe is well within reach. “The European computer market is really vibrant right now,” says John Lawrence, senior vice president and analyst at investment firm Morgan Keegan & Co. “That Insight could make its Canadian business profitable within six months of launching is a good indication that the company can do as well in other countries. We can expect to see a continued presence from Insight throughout Continental Europe.”
Insight, too, has high hopes for its growth abroad. “The direct channel is evolving overseas,” says Valerie Paxton, Insight’s vice president of corporate communications. “Choice Peripherals is where Insight was five years ago in terms of its business model of catalogs, extensive advertising, and inbound sales.”
Tempe, AZ-based Insight opted to buy an existing overseas mail order marketer with an established customer base, vendor accounts, infrastructure, and localized sales force rather than build a business from scratch. Insight will include its name on the Choice catalogs within six months and add a tagline, “Insight for a better Choice,” to gradually ease U.K. consumers into the transition.
In addition to the Insight name, Choice Peripherals is adopting the U.S. marketer’s outbound telemarketing business model. Insight sent 14 of its nearly 700 sales staffers to the U.K. to establish an outbound call center for Choice. Although catalogs remain a driving marketing tool for Insight, nearly 85% of its sales result from outbound calls to small and midsize business clients.
Choice will also benefit from Insight’s more extensive merchandise line. Choice’s catalog features fewer than 3,000 products, compared to Insight’s 55,000 products. Because the U.K. runs on different voltage from the U.S., though, not all 55,000 SKUs will be made available to Choice customers, Paxton says.