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#1 - Arbitech

Last year, Arbitech was #2. What did it take to leap into the #1 spot?

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#1 Arbitech

It's high tide at Laguna Beach, California, computer products distributor Arbitech. Manned by Torin Pavia, 32, and William Poovey, 33, our second-place winner for both 2002 and 2003 has now vaulted to the top of this year's Hot 100.

Growth is the buzzword around this . Sales for 2003 popped up to $86 million, and the company has expanded from 26 to 35 employees. But what's even more impressive than the numbers is the way Arbitech got there. "All our growth has come from existing accounts buying more from us, and word-of-mouth," says Pavia.

Staying down to earth (or down to sea level, in this case) is a priority at Arbitech. As Pavia puts it, "We've fought hard to keep our -the fun Hawaiian shirts, [being] near the beach, and playing together. We're all still surfing." Fun and go hand in hand in their office's high-energy trading-floor environment. Every trader working at Arbitech is his or her own CEO, says Pavia. That's not just lip service. Each employee makes major decisions, from accepting returns to setting the price for computer components. That attitude of empowerment is one of Arbitech's most potent secrets for success.

Beyond the catered lunches and annual retreat (this year to Las Vegas), the Arbitech team stays heavily involved in the community. They donate computer parts to the local high school and sponsor a golf tournament benefiting underprivileged youth, among other charitable activities.

Arbitech is still engaged in one of its greatest challenges: positioning itself as a complementary company alongside industry giants Tech Data and Ingram Micro, while still competing with them. Pavia and Poovey are accomplishing that by settling strongly into their niche of handling discontinued and constrained products (products that aren't readily available through Tech Data or Ingram Micro). This area also allows them to offer incredibly competitive prices to their small and midsize reseller clients, many of whom rely on Arbitech as a lifeline for staying profitable in competitive times.

Looking ahead, the Arbitech founders plan to continue to work their niche, hang their surfboards on , and trust their employees to lead the way. Says Pavia, "We couldn't stop growing right now if we tried."

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