A Plymouth tech firm has seen its turnover hit £2.5million as the coronavirus pandemic created an e-commerce boom.
IT and investment company Vertical Plus saw nearly all of its 50 client businesses generate increased sales due to the demand for home shopping.
The company, headquartered at Plymouth Science Park, invests in e-commerce businesses with potential and in return gets a percentage of their sales.
This investment includes building clients’ platforms, their inventory and their market edge by providing all-encompassing strategic consultancy, inventory and technical support.
“It’s performance -based selling,” said sales director Justin Smith.
David Gadd, Vertical Plus chief executive, said: “We think of ourselves as investors. Some call us an agency, some call us an IT company, but we don’t give them (partner firms) cash, but do give a website and fully managed service.”
Clients include Plymouth-based and national firms such as Roof Giant, jewellery company Catherine Best, and The Pet Express.
With lockdown forcing the closure of “non-essential” retailers Vertical Plus has seen its clients’ e-commerce turnover hit £25million through its platform.
Mr Gadd said 48 of the firm’s 50 clients had seen turnover double during the past year. He said: “The increase in turnover for most of our partners has double and in some cases trebled.
“So it’s been a successful year for us, we did not expect to hit these sales figures until 2024/5, so it has brought our growth forward three years.”That is not to say there are not pitfalls and challenges ahead but Mr Gadd said Vertical Plus now has a wealth of experience in the e-commerce sector and knows how to make a success of it. And its commission-only business model means it only makes cash if a client does.“If turnover can double overnight, it can half over night,” Mr Gadd said. But he doesn’t think the end of lockdown will hurt e-commerce, if the experience of summer 2020 is a guide.“When the last lockdown ended, turnover carried on,” he said. “At our peak we were treble (turnover), the average was double, but out of lockdown it was still a 75% to 80% increase. We think it will stay that when we are not in lockdown.
“We are wondering what happens when retailers can reopen, but it’s clear some big retailers were vulnerable and will not be back on the high street.”
Vertical Plus employs 28 developers, inventory specialists and consultants, most of them local to Plymouth. And it has already supported several local charities and wants to help more.
It has been involved in a European Union funded project helping additional businesses in the South West to achieve their growth potential by providing free consultancy.
“We had 500,000 euros so we could give free advice to local businesses,” Mr Gadd said. “The project ends in July, but has enabled a further 12 businesses to grow and we are still looking to see how many more of these sorts of businesses we can bring onboard.”And Vertical Plus is looking for new partners outside of this project, with Mr Gadd saying: “We have been working with some e-commerce companies for 10 years, but have taken on some new companies.“The focus for us at the moment is try to try to bring in new entrepreneurs in Plymouth with good brands, great ideas and ambition so we can work with them to grow.“But we work intensively and do not take on hundreds, only one a month. We have 50 at the moment and will probably stay on 50. We don’t really engage in extensive marketing of ourselves as the work we do is very intensive and focuses on a small number of rapidly growing businesses.”
