As electronic gadgets have become a ubiquitous part of our lives in recent decades, so too has the rate of return to the manufacturers.
Large companies – take Samsung, for instance – then have to figure out what to do with their returned inventory. The solution has long been a patchwork of small resellers, who compete against one another and drive down prices across the board.
Enter Amherst-based Deal Partners, which offers a new proposition for electronics manufacturers. The company strikes partnerships with those brands, selling only certified, high-quality refurbished goods at margins that have already been agreed upon.
Instead of effectively competing with their own supplier, the company views itself as a partner.
“The great thing about our model is that the brands are in control,” CEO Kevin Hamman said. “We consider ourselves an extension of their sales team.”
The plan is working. Deal Partners revenue increased from $36 million in 2019 to $65 million in 2020, and the company is preparing to move from its existing Amherst headquarters, which has about 6,500 square feet, to a new facility at 500 Commerce Drive with 32,000 square feet.
"We're really excited to be moving into a larger office," Scarcello said. "We expect to be fully operational by the end of the year."
While Hamman works out of Deal Partners’ Florida office and the company also has an office in Texas, much of its finance and administrative personnel work out of Western New York. That includes co-founder Jeremy McVige and chief financial officer Andrew Scarcello.
Deal Partners was acquired late in 2020 by Buffalo-based private equity firm Lorraine Capital. The management team retained significant equity in the company upon closing.
Lorraine managing director Sam Russo said that the market for refurbished inventory is exploding, and Deal Partners is making fast in-roads with manufacturers precisely because it is a trusted and sophisticated partner. The deal was brokered by Williamsville-based Paramax Corp.
Lorraine bought into the company with the plan of retaining its executive team and providing them with capital and guidance to fuel growth.
“Deal Partners exclusively partners with brands to create a collaborative strategy that shares in the risk,” Russo said. “The relationships with OEMs are growing as we gain access to more of their SKUs and product families, and we’re leveraging technology to create rich market data and drive good decisions.”
Deal Partners now has about 40 employees, with plans to grow by at least a handful more this year. The company was recently named to the Inc. 5000 list of fastest private-growing firms in the U.S., which it has appeared on multiple times.
Deal Partners sells its products through the brand Deal Parade on marketplaces such as Amazon, eBay, Newegg and others. Its growing list of clients include Samsung and JBL.
