High-Tech Thrift Shop Sells Corporate Assets
Ex-employees launch own business
BOSTON — GRADY SIMMONS lost a job but found a company.
In the process being laid off by Digital Equipment Corp., Mr. Simmons and colleague Craig Klepper got the idea for starting their own company. Their business: selling off used assets for companies that are downsizing, right-sizing, or plain old economizing.
Asset Conversion Specialists Inc., based in Chandler, Ariz., takes a percentage of the sales and promises to dispose of the items at a higher price (the owners claim 50 to 200 percent higher) than what most companies could get on their own.
The small, minority-owned firm moves everything: computers, office furniture, semiconductors, incubators, even construction equipment. And unlike many competitors that only sell off the equipment, Asset Conversion Specialists (ACS) will manage the entire closure, from cleanup to shutdown.
So far, business is humming along for this 19-month-old start-up. In its first year, ACS recorded $321,000 in gross sales; 1995 gross sales through October were $315,000.
"The surplus world is not what it used to be - a giveaway," Mr. Simmons, president of ACS, said in a recent interview in Boston. He estimates that the sale of used assets is a billion-dollar industry (no official figures are available). Although downsizing shows signs of slowing, he says the rapid change in technology will only perpetuate their business.
How did Simmons and his partner wind up in this business anyway? Downsizing, of course.
Before ACS, the two both worked for Digital Equipment Corp. in the company's thin-film-media manufacturing plant in Tempe, Ariz. Simmons (who spent his entire career at Digital) was the plant's controller, and Mr. Klepper was an engineering manufacturing manager. But a change in corporate strategy in 1993 led Digital to close the $80 million facility. Simmons and Klepper were in charge of the entire shutdown.
What they saw was Digital accepting pennies on the dollar for its used equipment, while the brokers who acquired the inventory then resold it and made a mint.
Rather than transfer to Digital's Boston office, Simmons acted on what he calls a "forced choice" and became his own boss. With $5,000 and a lot of gumption, he launched ACS.
CLIENTS range from startups to a handful of Fortune 100 companies. Often, corporations are in such a hurry to get rid of assets, Simmons says, that they don't give much thought to maximizing the dollar value of the goods.
"[Companies] spend a lot of time on the front end, purchasing equipment ... and on the back end, it's about five seconds," he says. ACS plans to develop a software program to help its clients better manage the sale of their used assets.
Their success rests on knowing the market value of any item that crosses their path and being able to find sources and outlets for it. "We don't appraise anything, but we can put a price to it," Simmons says. Within seconds, he was able to quote a price for the office furniture in the Monitor's conference room.
"It's surprising what you can sell," Simmons says. He shipped what may have been one of the first Olympia manual typewriters ever made, he says. "We shipped it to Manila the minute I could get my hands on it."
ACS also locates used equipment. (Simmons is currently trying to track down a 45-foot-long oven for a client in Texas.)
Simmons not only recycles equipment, he also recycles people by hiring as contractors those who are temporarily out of work from downsizing. He calls them "seasoned veterans."
Marcellus Stamps, a friend and former co-worker of Simmons's who also lost his job when the Tempe plant closed, came on board at ACS about a year ago. He currently works out of his home in Ashland, Mass., as a representative for the company.
"I left Digital 15 months ago, and I went out in a very dutiful way to try and find new employment," Mr. Stamps says. "I literally have 1,000 resumes on the street somewhere, and that netted me little if anything ... a couple of job offers, none of which I was interested in taking," he says. "And then I find myself here. I have value, I have knowledge, I have experience, and Grady's utilizing that."