Sam Encel – History @ Interdyn

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Sam Encel – History @ Interdyn

Like his father, Sam Encel always had an interest in electronics. He spent his youth quietly beavering away in his room on programmable Lego and Meccano sets, even etching his own circuit boards to build light-up displays. Christmas presents would be things like walkie-talkies from Dick Smith, a Scorcher remote controlled car, or a self-assembled robotic arm.

He loved the idea of business too. At the age of 13 on a family holiday, he bought a bunch of small toys off the streets of Bali and sold them for $2 to his classmates back in Melbourne (at a huge mark-up!) It wasn’t exactly a complex operation, but the thrill of the sale stuck. A few years later at the ages of 16 and 17, Sam combined his love of electronics with a growing interest in business. After accompanying his dad on a business trip to Asia, Sam visited Singapore and Taiwan where he started purchasing mobile phones. These were the halcyon days of Nokia, Ericsson and other exotic brands with new features like polyphonic ringtones and colour screens which Australia hadn’t seen the likes of yet.

This progressed to regular trips to Japan to buy the latest MiniDisc players video cameras and laptops. Back then, Australia received only a small selection of the weird and wonderful consumer electronics coming out of Asia, and usually at a lengthy delay and hefty premium. Sam capitalised on this gap by bringing the products to hungry Australian customers via online auction sites (as many as he could carry onto a plane after visiting the electronics markets). A typical buying trip would involve leaving school on Friday, going straight to the airport, taking an overnight Qantas flight to Tokyo, catching the train to Akihabara electric town and making his purchases and flying back to Melbourne by┬áSunday┬ámorning. The overheads were high and the operation wasn’t exactly sophisticated, but it was so much fun.

Fast forward to university. Sam studied an Arts/Commerce double degree at Monash, where he met Evgeny. Sam had always dreamt of working alongside his dad, but Alex gave him some stern advice: “You can either start by mopping the floors and work your way up within my company, or you can get some experience somewhere else that would make me want to hire you.” Partly averse to mopping, but mainly wanting to experience everything that working for a big company could teach, Sam set about applying for positions with banks and consultancies. He accepted an offer from professional services firm PwC where he worked in risk management for three years. The experience was invaluable – not exactly in the mould of audiovisual distribution, but with other skills around managing teams, presenting to a high level, meeting project budgets and timeframes, and delivering valuable outcomes to customers.

Dad called, and wanted some help to run Interdyn. The business wasn’t in a good position though. A changing market and losing the rights to distribute several key brands had meant the wholesale business and the retail arm, Encel Stereo, were making big losses. Evaluating the business, Sam and Ev decided that there were good fundamentals – a healthy dealer network, ongoing demand and a solid stable of brands – but that radical change was needed to mount a massive turnaround.

So they set to work. The first two years were about lowering overheads – going line-by-line through the profit and loss to find savings. Encel Stereo, a sentimental place where the whole business started, was closed. This allowed Interdyn wholesale, the bigger business, to approach other dealers without competing with them. Expensive travel and entertainment budgets, marketing that didn’t deliver ROI, old redundant stock and antiquated IT systems were all cut. Warehousing was outsourced to a 3PL which could completely systematise logistics. A sales system, dealer ordering portal and store rewards program were all built in-house by Interdyn’s two programmers. And most importantly, Sam and Ev refreshed their team with people who understood that the status quo of hi-fi distribution needed to be challenged.

With a solid operational base from which they could provide service excellence to their dealers, the time was right to get aggressive about revenue. A mix of digital marketing, class-leading retail solutions and excellent customer service has helped key brands like Pro-Ject, Rotel and OPPO become market leaders in their categories. Now, five years after the turnaround began and over 50 years since Interdyn was founded, same-brand sales are up 70%. Interdyn is consistently ranked with the best sales performance per capita amongst its brands worldwide, and often sits in the top five territories for overall sales – not bad for a combined area of less than 30 million people. The company has acquired rights to leading brands like Devialet, Ortofon and Roon.

The future is exciting: a platform of operational excellence will allow Interdyn to continue to provide the best retailer support in the industry and reach more consumers than ever.

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