Interview – Iain Wilson MD for International Business Centre Ltd
Iain Wilson runs the multi-national musical instrument manufacturing and distribution company International Business Centre Ltd, from his headquarters just outside Belfast.
The company has a solid reputation as a facilitator, matching instrument manufacturers, together with attendant hardware including amplification and PA systems, to distribution companies around the world.
MIN’s Andy Hughes discussed with Iain, the company’s formation and structure, and its survival through the financial crash and COVID epidemic, and its continuing evolution and development moving forward.
What’s your history in the manufacturing and distribution sector?
I started working with Lowden Guitars in September 1993, so the thirtieth anniversary has just passed. I started as their European Sales Manager, and became their Worldwide Sales Manager within twelve months, and I stayed with them until 2006.
My involvement occurred due to a bad car accident I had when I was sixteen, and I injured my pelvis and back severely. I was a keen golfer, and suddenly unable to move very much at all, so I used some of my insurance payout to buy a guitar, and it was a Lowden.
I studied marketing and French at university, and I knew the owners of the Lowden company, they needed some research in France, and I went there for them, and then to the Frankfurt Music Fair, although I wasn’t working for them at that time. Three years after I graduated, I was offered a position with the company, and I was delighted to join them.
How did you spot the gap in the market that is now filled by IBC, what was your idea for forming the company?
What happened was, in 2003, before the G7th Capos company was formed, they approached me because I had some experience in the manufacturing and distribution systems in China, and they asked me to do some research into those areas for them. I travelled to China over a two-year period, and I looked at around seventy to eighty factories from the north to the south. That meant I built up quite a long list of contacts, and knowledge of the infrastructure over there.
In 2006, a lot of companies were approaching me asking for contacts with the factories in Asia that I had visited, and I was hooking them up free of charge. Then I thought, there must be a business opportunity here. So, I started my company offering consultancy, sourcing links for brands and manufacturers, and working as a ‘matchmaker’ in effect. Then other companies approached me about finding routes to international markets for their products.
We have two distinct operations in the company, one is sourcing marketing opportunities for companies, and that is done on a consultancy basis, and the other is finding manufacturing resources for different brands all around the world.
Are you proactive in terms of finding new business, or do companies approach you to assist them?
It’s a mixture of the two – we do look for companies to approach, and we get a lot of contacts internationally through LinkedIn as well. We also attend all the major trade fairs around the world.
I understand that you overcame the potential obstacles of a rival in your sector by merging with another company, Kuffner International Limited.
Yes, what happened was, Hap Kuffner was one of the very first people sourcing instruments from Korea, Japan, and China. When China opened trade with the rest of the world, he was there. He was working for EMG and he visited the Lowden factory and we became very good friends. We were doing the same thing, he was working for EMG as their Sales Director, I was working for Fishman in international sales, and we travelled the same routes doing the same thing. He had a huge list of contacts, and I suggested that he didn’t want to keep going to China all the time, and that I could do all the travel. He was a mentor to me in my early days in the business.
You managed to survive and progress during Covid, because you had teams on the ground in Asia.
I was fortunate that when I set up in 2006, I had people working for me in Asia who still work for me today. I had people I trusted in China. So, while everyone else was struggling to get supplies in China, my teams were able to get into the factories when restrictions were lifted, and able to carry out quality control and oversee things. This was when no-one else was able to get into China, or anywhere else. The cash flow was difficult, we had to outlay tens of thousands of dollars upfront to get parts to supply orders to our customers, machine heads, pickups, and so on, and get to the top of the production list when things started moving.
Now, like everyone else in the industry, we are dealing with an oversupply in the market, and the market is correcting itself, so the last six to nine months have been more difficult, dealing with the oversupply. It will probably be the middle of next year before the market evens itself out again. You can’t predict these things, there are things outside your control, and you have to work around them. I started IBC Trading in 2006, and then the financial crash happened in 2008, and then I started International Business Centre Ltd in June 2019, and then Covid hit in 2020, so I have a habit of starting companies at the ‘right’ time’!
Your company has been awarded the first King’s Award For Enterprise, do you know why your business was selected, and what the criteria were?
It was a really tough set of criteria, the application form was one of the hardest to complete I have ever had in my life. You not only have to complete a very thorough and detailed application form, they also go through your accounts, your VAT returns, and all your tax details, they do a really thorough investigation, because they don’t want to award the King’s Award to a company and then find out later on that it hasn’t paid its taxes correctly! The Award was given for our business growth and our international trade. We had a very steep growth curve in the company business over the last three years, which is thankfully still continuing. We were one of two companies in Northern Ireland to receive the Award, and there were around eighty others around the UK who received it for different achievements.
Having the Award logo on your website and stationery gives you considerable kudos in your international trading.
It does, and we are allowed to carry the logo for five years. It does help when we start looking into new markets internationally.
When you began your role as a facilitator, putting companies and organizations together, how did you work out a pricing strategy and structure, because I would imagine there was nothing else to actually compare to, for a guide on pricing your services and expertise.
I tell my new clients, you are buying into thirty years of experience and fortune spent on flights and accommodation in the areas you want to work in, to gain the expertise that I have. I do invite people to go and have a try themselves if they want to, but then advise them that doing so will cost them a hell of a lot more than I would ever charge them. The fee is usually structured around a percentage for the parts and instruments involved. That makes it easy for the customer to assess, and see if they think it’s a value-for-money option, or if they decide in fact to go ahead on their own without our support, contacts, and expertise. We have to factor in the costs of maintaining our teams in Asia and other areas, and the cost of maintaining our business in Northern Ireland, and of course, costs have gone up for everyone in the last few years.
Most people genuinely would not know where to start, and post-pandemic, a lot of people are worried about travelling in Asia, and having to sort out visas which are more problematic than they were previously, and we have all that in place already.
You did team up with Kuffner, a potential competitor, but are there any other companies out there offering similar services?
There are companies that source parts and instruments, but there are not a lot of them. Our USP is that we not only source products, but we understand the marketing side of the industry because we have the contacts and the experience in that side of the industry, so we offer the full picture.
We probably turn down as many, if not more, of the clients who approach us. We have people who come up with an idea, and we will be very honest with them. We’ll say it’s a nice idea, but you will only ever get a niche market out of it, unless you spend ‘x’ amount of money to get it launched. You’d be better to launch it as a small family business, and earn a small profit from it, but it’s never going to scale up to the level that you are thinking of. We can explain how the system works, through direct retailer contact, or marketing to the consider, we understand all of those aspects of the business, because that’s what we do all over the world.
You have Asia and the United States as your major platforms of business, do you plan to expand anywhere else in the near future, or are you planning to stay within those territories?
We manufacture for companies in the USA, Canada, Germany, The UK, Poland, and Italy, so we have other territories for that sector of the business. We do manufacture in Italy and Spain, and we are looking to source manufacturing sites for our US customers, in Mexico. That’s particularly in PA and amplification manufacture, that’s an ongoing project we are working on at the moment. There are many sides to what we do, and we are not limited by territory, We are liaising with a client in Paraguay at present with a view to worldwide manufacturing, we are always looking for new areas and new markets for our business.
You have the two parts of your company, manufacture and distribution, Is the plan to continue to run those two sectors in parallel moving forward, or can you ever see a time when one may take precedence over the other?
The plan is to run them in parallel as long as possible. We have been successful in doing that for more than twenty years, so there is no real impetus to change that business model. The key to our success is the wonderful teams we have around the world running things for us in their own geographical areas, and expertise areas. It is not just me, it is them that makes us successful.
How do potential clients contact you with a view to discussing coming on board with your business and looking for the support you can offer?
Our website is IBC-Music.com, but you can find us if you search for Iain Wilson on LinkedIn. The website will certainly give you all the information you need about what we can offer to businesses. In terms of up-to-date information day to day, we use LinkedIn, and that’s a good place to find us as well.
You are developing and moving the company forward, but what is the future for you personally, do you plan to carry on in your role, or step back and take it a bit easier?
I’m in my mid-fifties, so I plan to be around for quite a while yet, I may look old, but there is plenty of gas left in the tank! This is an industry with a great buzz to it, and I love what I do, so there is no reason for me to stop enjoying it.
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