Liquidity Services on Mid-Market Success
If you're a business looking to maximize the value of your underutilized, obsolete, or surplus inventory, then Liquidity Services, Inc. (LQDT) is ready and able to help you out. Founded in 1999, Liquidity Services, Inc. has created the largest global online marketplace for surplus assets. This allows them to connect leading global enterprises and over 5000 government agencies with more than 2.2 million registered buyers. Now operating in over 25 countries worldwide, the unique combination of Liquidity Services, Inc. online marketplace and award-winning services helped them earn more than $475 million in revenue during 2012.
In addition to being a five-time recipient of the Vendor Excellence Award given out by the Defense Logistics Agency, Liquidity Services, Inc. was also listed at #35 on Forbes' 2012 list of best-performing companies with less than $1 billion in revenue.
There are a number of factors that have contributed to Liquidity Services, Inc.'s sustained success, but one of the main ones has been its strong, stable leadership. Co-founder, CEO, and Chairman of the Board William P. Angrick, III recently took some time to talk with the National Center for the Middle Market about his organization's growth and other key topics.
Q. To what do you attribute your organization's recent success?
A. There are a few factors that are key:
- The Marketplace We Operate In
We are looking at a marketplace that is in need of a more professional, transparent solution. So we are transforming the way that the industry thinks and behaves. We use e-commerce to bring supply and demand together in an open, transparent, secure way using a business model that has unique, competitive strengths. This includes the world's largest base of business buyers; over 2.2 million business buyers that have the ability to digest large volumes of surplus and end of life equipment.
- Global Market Data
The marketplace we operate has unique data that is generated for every transaction that we complete. So this global market data across key industries is very valuable to set the price of these goods. It ensures that a large seller is getting the market price as opposed to negotiating with a local seller or broker in the absence of competition.
- Unique Service Offerings
Our large sellers want a “do it for you“solution. They view the reverse supply chain as a non-core function and don't want to invest additional time, space, and resources to handle these items. So they outsource the entire process to us because we provide the turnkey service offering.
- Strong Execution
We've handled large scale programs for government agencies, Fortune 500 retailers and manufacturers, and our ability to move hundreds of millions of dollars of goods reliably is a key competitive advantage for us.
Q. What type of traits does your organization look for in its employees?
A. We're a service organization, so we rely on our associates' ability to articulate our value proposition and provide a high level of service. The core areas that we want for our company is an understanding of how to analyze data and make recommendations that are fact-based and driven by empirical data.
We also look for an understanding of how you fit in our operational processes. Knowing how your role in a process affects people both upstream and downstream helps you understand our client's business context as well as how we execute internally at Liquidity Services. Along those lines, we have a lot of emphasis on six sigma process excellence and look at reducing defects and non-value added activities.
Even though we are a market leader, we're in a marketplace that has not embraced technology. So we're blazing a trail and have to have entrepreneurial people that have creativity and think about new ways of approaching client situations and problem solving.
It's also very important that for people to succeed they need to be able to communicate and collaborate with other team members across functional areas. This allows you to help build on each other's ideas and find the best solution to a problem.
Q. What advice would you give to executives who are trying to grow their company?
A. First you need to think “Who“and then “What“. You really have to have an outstanding team in place that has the knowledge and experience to do great things. It's not an accident that the world's best-performing companies have great talent, so focus on that talent and you will increase the probability of success. In new venture creation there are so often great ideas that are not profitable.
You can't charge a premium for your service that allows you to be profitable unless you have an outstanding value proposition; one that isn't just incremental to available alternatives, but is fundamentally better.
Finally, be sure to balance short and long-term objectives. You need to be able to dedicate a certain amount of investment, time, and resources to thinking beyond the current year. This means having the discipline to be planting the seeds for growth that you won't see in the next 12-18 months, but are critical to arriving at the destination that you've established as your long-term growth objective. That fundamental balancing is a continuous process and is very important to the growth of any business.