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Tech reseller finds strength in numbers

ScholarBuys'  Bob Smith left  Matt Ryan. Sun-Times Medifile

ScholarBuys' Bob Smith, left, and Matt Ryan. Sun-Times Media file

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Updated: March 1, 2013 6:18AM

CARPENTERSVILLE — For Matt Ryan and Bob Smith, launching a business during the recent economic downturn was an ideal time.

It provided them access to a talented workforce and great rates on office space and furniture. The fact that they were marketing deep discounts on technology-related products was an even bigger coup.

It didn’t matter that their target market, K-12 schools, colleges and universities, had streamlined budgets, because their objective is to group together customers with common needs and leverage big savings for them by purchasing in bulk.

It’s an Economics 101 business model: the more you buy, the lower the cost per unit. What’s more, the savings trickle down to students and faculty, who can purchase products for their personal computers at reduced prices.

Ryan and Smith, co-workers for many years who sold technology products to academic markets, founded ScholarBuys in 2007 from the basement of Ryan’s Hampshire home. “I lived in Chicago at the time,” Smith said. “I got the short end of the stick as far as the commute.”

The Carpentersville-based firm is considered a reseller in the tech industry, but it has nothing to do with second-hand merchandise. Resellers sell products on behalf of manufacturers.

“We’ve been able to effectively negotiate special pricing and special services with companies like Microsoft, Adobe, HP, McAfee and VMWare,” Smith said.

In the beginning, the business partners put in 16-hour days. “If we were awake, we were working,” Ryan said. They had to establish trust with manufacturers, who were concerned that the start-up company would be short-lived; secure lines of credit (they paid bills early to earn favor with lenders); and build relationships with schools.

Within the first six weeks of operations, they received a return on their initial $20,000 investment. After three months, they left Ryan’s basement for professional office space. Several moves later, because the firm kept outgrowing its digs, ScholarBuys has most recently made 11 West Main Street in Carpentersville its official headquarters.

The company occupies a 2,250-square-foot, loft-like space, in the much lauded former Illinois Iron & Bolt building recently rehabbed by Otto Engineering. To Ryan, who knew at an early age that he would become an entrepreneur, the location is especially meaningful.

“I’ve lived in this area my entire life,” Ryan said. “I went to preschool at the Dundee Township Park District on Washington Street. I drove by these buildings as a kid and always thought they were cool.”

With a staff of 8 employees filling sales, marketing and operations roles, ScholarBuys has built a nationwide clientele. In Illinois alone, the company handles a majority of the software licensing for about 50 colleges and universities, and often gains a lot of business from referrals, Smith said. Now the goal is to hire more sales staff.

“We’re not a company that has been established for 20 years, with a huge Human Resources Department that has processes in place to train employees,” Ryan said. “There’s a lot of learning on the job.” He describes the ideal candidate as someone with an “apprentice-like mentality,” willing to do anything it takes to learn about the rapidly changing technology industry, the firm’s customer base, the products it sells, and its competitive advantage.

Many of the company’s hires have been recent college graduates, and just like proud parents, Ryan and Smith take great pride in watching them learn and grow both personally and professionally. A couple of young employees have even purchased homes in Carpentersville, establishing roots in the area that holds special meaning to their employer.

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