iBuyXS, a St. Petersburg-based electronic component broker, was recognized by Inc. Magazine as Florida’s fastest-growing private company after its sales exploded by 4,800%.
While the national Inc. 5000 list is still months away, the ubiquitous finance publication is compiling its regional lists. With a microchip shortage still gripping the nation, iBuyXS placed fourth in the Southeast.
CEO Claudia Pallazola and her husband, John, launched the company after they moved to St. Pete in 2019. Proprietary software, a marketing focus and pandemic-induced supply chain disruptions led to immediate and exponential growth.
“This was such an unprecedented point in time,” Pallazola said. “Just everything converged. Politically, health-wise and economically. We had to adapt to what it was.”
As Pallazola noted, the company’s name embodies its operational foundation. She and her team purchase surplus electronic components – microchips, semiconductors, central processing units (CPUs), graphics processing units (GPUs) and the like – and sells them for a profit.
And, as the saying goes, business is booming. Graham Scott, vice president of global procurement for St. Pete-based Jabil, recently wrote that just a few previous imbalanced markets could rival the ongoing global chip shortage.
“However, it’s unique in the breadth of product families feeling the gap in supply and demand,” he continued. In addition to the previous factors Pallazola mentioned, she and Scott noted that recent technological advances – 5G cellular service, the automotive industry’s electrification and artificial intelligence – served as fuel for the component shortage fire.
Despite the soaring demand, many manufacturers still end up with excess parts. Canceled orders are one cause, and Pallazola said those companies are eager to shed the superfluous stock from their accounting books.
“So, that’s where we come in,” she explained. “We help them place that inventory and give them some cash flow.”
She added that iBuyXS also specializes in acquiring specific, hard-to-find components. A company like Ford Motors can put in a request, and Pallazola’s team then reaches out to an extensive web of vendors built over the past three years.
They also created EPIC (Excess Placement Inventory Control), proprietary software that enables iBuyXS to utilize surplus original equipment manufacturer (OEM) parts to fill another company’s shortage. Then there is BidChips, an iBuyXS auction platform.
Pallazola likened BidChips to eBay for electronic components, with international vendors vying to acquire parts for the best price possible. She said her company believes in transparency, and buyers can always see how much the broker paid for the product.
Pallazola understands both sides of the industry through 25 years of experience. She started her career as a purchasing agent for Scientific Atlanta in Juarez, Mexico.
“We hated brokers,” Pallazola said. “Because they would charge so much money and make so much money off us. So, we really want to be transparent to them (customers).”
Her company typically charges a 20% markup over its cost. While prices increased exponentially during peak shortages, Pallazola said a shift is occurring.
She said supply is now starting to meet demand, and costs will decrease accordingly. However, Pallazola is not worried about a softening market affecting iBuyXS.
“We are set up for either situation,” she said. “We’re not that big of a company, like some of the other brokers, so we don’t have all the levels of authorizations that they have to go through. So, deals go really fast with our structure.”
She said that speed allows iBuyXS to keep prices low. The company operates a small office and warehouse in downtown St. Petersburg, and Pallazola explained there is no need for additional space or overhead.
Electronic components are minute, and market research guides inventory decisions. Technology constantly advances, and Pallazola said, “we don’t want aging stock.”
She and her husband moved to St. Pete from New Hampshire, and the Mexico native appreciates the change in weather and culture. The entrepreneurs sold a previous company to launch iBuyXS, and Pallazola looks forward to growing her business alongside the “up-and-coming city.”
She is also preparing to launch another company in the coming weeks. Dinefits (dine plus benefits) is a mobile application that provides cash back to users when they visit restaurants during specific hours.
“We are invested in the community,” Pallazola said. “We love it here, and we want to keep flourishing and be part of this growth that is happening.”
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Sounds like a creative and productive new business which is, of course, very welcome in our community.
The Dinefits Company information will work well in a diverse population like St Petersburg. Hope to be on the list to follow them.