Operating in reverse: Genco buys Dell computer refurbishing business
Herb Shear, left, principal owner of Genco, and Thomas M. Perry II, president of Genco Reverse Logistics, at their Blawnox facilities.
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For the last four years, when anyone who bought a Dell computer sent it back, the return and resale were handled by Genco.
The O'Hara-based distribution company also is a big take-it-back company, a process as complex as shipping out. In the business, it's called "reverse logistics" and Genco is a leader in the field.
Now the company has gone a step further. It used to be that Genco would ship the computers out for Dell, bring returns back to Dell and then handle the reshipping of the refurbished machines. Now Genco has bought the refurbishing business, too.
It's just the latest change in a company that was founded 111 years ago by Hyman Shear, who turned his horse and cart into a trucking company.
Today, the company owns just a few trucks and none of the warehouses out of which it works. Instead, Herb Shear, Hyman Shear's grandson, is the owner of a logistics company, renting warehouses and hiring trucking as needed, so that as the economy has contracted, Genco is not parking trucks that it owns but does not need, and it does not have empty warehouse space it does not use.
Though thousands of products -- pharmaceuticals from Bayer, Procter & Gamble, GlaxoSmithKline and CVS; consumer products from Johnson & Johnson, Crayola and Black & Decker; food and beverages from Hershey's, H.J. Heinz and Smuckers; electronics from Phillips Electronics, Sony and of course, Dell, and clothing, from Levi's -- are all handled by Genco, there are no trucks on the road with the Genco logo.
By operating what the company calls a nonasset based model, meaning it owns the information and software to keep the company going and leases the rest, the company has been able to easily contract as the economy has contracted.
"We're never on the hook for the assets," Dave Mabon, the chief customer officer, said.
The company, however, is not ready to call the year a profitable one until it is over.
Mr. Shear, of Shadyside, said the acquisition of Dell's refurbishing business should add a good 25 percent to the reverse logistics division of the company, which is one of three aspects of the $788 million company, which employs 7,000 people and operates 37 million square feet of warehouse space throughout North America. Mr. Shear would not say how much Genco paid for the refurbishing facility, saying that was proprietary information.
In addition to the business of taking back products, the company in its logistics division handles the supply chain for customers, linking suppliers to manufacturers to the marketplace.
And if a product doesn't sell, Genco can handle that too.
Genco also operates Genco Marketplace, which sells goods by the pallet, liquidating merchandise and getting rid of overstocked goods to discount marketers, eBay power sellers and flea market sellers. It also operates nobetterdeal.com, where all manner of goods are sold online, cheaply.
The refurbished computers, most of which come back undamaged but are returned because of buyer's remorse, are repaired if they need to be and tested at a plant in Lebanon, Tenn., then resold on Dell's Web site.
Mr. Shear said the reverse logistics business, that of taking products back, refurbishing them and reselling them, is good for business -- and good for the environment.
"Part of reverse logistics is keeping stuff out of landfills," Mr. Shear said. "That's a big part of what we do."
First Published July 22, 2009 12:00 am