Arbitech LLC’s new headquarters and warehouse near the Irvine Spectrum were renovated to push more product while paying homage to its beachy roots.
A custom-made surfboard and murals of iconic point breaks commissioned by local artists adorn the walls of the front office while two 100-foot production lines buzz in the back warehouse.
The 47,000-square-foot headquarters at 64 Fairbanks is 10,000 square feet larger than its old digs at nearby Barranca Parkway and should help the distributor boost its top line in the coming years.
“This affords us a lot more space to expand,” David Peterson, director of engineering, said during a recent tour of the facility. “In the old building we were actually filling up our downstairs kitchen with inventory, we were so full.”
Arbitech posts annual revenue of about $100 million, which ranked No. 87 on this week’s list of OC’s largest private companies. It employs about 80 in Irvine and competes against big global distributors, including the world’s largest, Irvine-based Ingram Micro Inc., which posts annual sales of about $42 billion, as well as Avnet Inc. and Arrow Electronics Inc.
Ingram was acquired late last year for $6 billion by Chinese conglomerate Tianjin Tianhai Investment Company Ltd.
Arbitech doubled packing and filling stations on the production floor, which features digital scales and three full bay loading docks that speed up the shipping line. A dedicated caging area is stacked with retail items for its growing e-commerce business, from smaller components like access points and docking stations to larger products, such as printers, scanners and surveillance equipment earmarked for the likes of Las Vegas casino customers and financial firms.
“The layout is a lot better,” Peterson said. “Everything you see here today is out the door within two weeks. We turn it pretty quick.”
Arbitech receives and ships 20 to 30 pallets daily at its warehouse, an operation that included a facility in Torrance for overflow before the recent move. Most of its products are destined for locations in the U.S.; about 30% of its business is international.
Amazon.com and eBay are the primary distribution channels utilized by the company’s network of value-added resellers, or essentially technology consultants that sell goods and services to businesses.
An adjoining room in the warehouse houses a gym for workers, who also have access to a newly designed kitchen and game room featuring pingpong and arcade classics—the types of amenities that have become hallmarks at tech companies coast to coast.
“We’ve always tried to balance the work and family life,” said President Frank Llaca. “And try to stick with our roots. That’s how this company started.”
Arbitech was established in 2000 in a tiny office next to a liquor store just a short walk from Main Beach in Laguna Beach.
Torin Pavia, who wrote the business plan for his MBA thesis at the University of Southern California, is the only founder among the company’s five still active in the business. The plan was centered on arbitrage, or profiting from different pricing for the same product in different markets.
A push into e-commerce in 2015 fueled the expansion and now accounts for about 25% of annual revenue. The diversification increased volatility in an already thin margin line but complemented its enterprise business of selling networking gear, servers and storage by the likes of Cisco, Hewlett-Packard and IBM.
Arbitech has been profitable since its early days but is positioned to grow under its management team, which was largely assembled in the last few years.
“We wanted to consolidate everything into one building and have all our eyes on it,” Llaca said. “This building is a statement of who we are, where we’ve been and where we’re going.”
