Cathie Anderson

Insights into the people who shape Sacramento’s business landscape

Cathie Anderson: Consumers buy Rancho Cordova company’s candy-colored electronic accessories

10/24/2013 12:00 AM

10/24/2013 7:59 AM

As Wes Sumida lays out how he built a $120 million electronic accessory business in Rancho Cordova, you begin to understand that NBA players are not the only ones who have to excel at pivoting.

Sumida, the founder and chief executive of E-filliate and Cyberguys in Rancho Cordova, started with a one-hour photo business in Davis, sold it and then got into several businesses that failed.

“You learn from your failures – obviously – and you have to fail to learn,” Sumida told me. “You just want to do it earlier in life; the earlier the better.”

Sumida didn’t find his true calling until he became a stockbroker, a profession that looked more lucrative to him than air-conditioning repairman, the trade that his dad, a pharmacist, had suggested years earlier when Sumida dropped out of Fresno State.

It wasn’t the sale of financial products that brought Sumida his greatest financial reward, however. He actually made more money by setting up computers for financial planners who wanted to create portfolios for their clients on the computer. This was at a time when few people had computers in their offices or homes.

He opened a storefront, advertised in the PriceCo sales circular, and he got plenty of takers. He eventually moved into selling computer accessories, but as big-box stores cropped up around him, he thought, “How am I going to compete against this? I better do something else. I’m going to have to reach out and sell to other people, other than people just in my region.”

He began a mail-order business that he evolved into computer accessories e-tailer Cyberguys as times changed. Sales grew to around $25 million and his staff grew to nearly 100 people. Then came the recession, and Sumida had to let half his staff go. He was struggling to stay afloat when Steve Jobs introduced the iPad tablet in 2010 and welcomed everyone to the post-PC world.

It scared Sumida. How would he survive if he didn’t embrace mobile?

He knew he had to rethink his business position, and he dedicated himself to producing great computer accessories that would sell for under $20 at retail. First, he created little spinner displays for retail counters with technology products – HDMI cables, CD cases, screen protectors and more – all priced at $5.

Walgreens picked up his so-called 5 Buck Tech, and the drugstore chain began to see its flagging sales of electronic accessories pick up. It was then that Sumida was hit with an epiphany. If price, displays and packaging could buoy sales, what would happen if he gave consumers a choice of colors on earbuds, car chargers and cables?

“It’s not men that buy this stuff,” Sumida said. “It’s women, and we better make these things in colors because, you know what, women buy the colors. Men buy things because they need them. Women buy things because they want them. Right? Big difference.”

These days, Walgreens sells more than 400,000 products a week developed by Sumida’s E-Filliate wholesale business, making the company Walgreens’ second-largest vendor after titan Procter & Gamble. The drugstore retailer had thought about getting out of selling electronics before teaming up with Sumida, but that’s no longer the case. Sumida also has signed a deal to develop mobile accessories for supermodel-turned-designer Kathy Ireland, and there are other confidential negotiations in the offing that Sumida said will boost his sales even more.

“We call ourselves ‘the slot machine of retail’ because you can make more money per square foot, per square inch than anything,” Sumida said.

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