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If the price isn't right . . .

If the price isn't right . . .

Price management and authentication issues are the major worries for resellers when it comes to the new marketing medium of the Internet, according to those already trading in cyberspace.

Recent incidents in the US have served to highlight some of the problems occurring in this new environment and those already working on the Net report that each individual business has its own set of problems as well.

One computer sales-centric site, Buy.com, reportedly lost more than $50,000 when it mistakenly advertised a handheld product at $79 instead of its correct $379 pricetag. Meanwhile, another went offline for 36 hours and lost unknown sales and customers.

Tony Gleeson is the proprietor of Software On Line (which hangs off the Yellow Pages site and is found at (www.users.bigpond.com/net.profit/soft99/ start.htm), which is marketing a large range of product on the Internet from Cairns. The only price problems he has experienced are with exchange rate fluctuations.

"All my transactions are done in Australian dollars," said Gleeson, who doesn't keep a lot of stock. "Most importers of software have to keep their prices on a par with international policies, so if our dollar devalues by 10 per cent, up go all the prices.

"I really have to be right on top of my pricing policies but every company in the industry is in the same situation. I can update about 10,000 prices automatically so it isn't really a huge problem."

Ron Harris, managing director of Harris Technologies (www.ht.com.au), Australia's most successful Internet retailer to date, has seen all the pricing woes before. He now has secure systems and methodologies which reduce any problems to an absolute minimum.

"Our system shows us immediately that we have lost money when the sale is made, so we can get in there and change it straight away," Harris said. "Unlike a catalogue, the Web is live and that is an advantage because all maintenance happens straight away.

"Online operators need to be on the ball. You work in real time all the time but I think that is a good regimen to be operating under.

"Under Australian law, if you advertise a price, you are obliged to honour it. It is a danger, so you have to develop your systems and infrastructure to incorporate quality control measures," he added.

In rural Queensland Paul Blake is the proprietor of Data Byte (www.databyte.com.au) which is yet another local company selling computer hardware and software on the Internet. He ghosts a site which allows him to market over 14,500 products with distributors such as Dataflow and Tech Pacific handling inventory and dispatch.

Blake said Data Byte downloads prices daily and has developed his own system of validation checks which allow him to totally update and check the site in "about an hour".

"I haven't had too many problems with pricing. There are issues with warranties when I make overseas sales and there have been a few problems with credit card fraud, so you have to be very careful in authenticating orders," Blake said.

The other major effort required, according to Blake, is to create awareness of the site.

"There are lots of free links that you can take advantage of and you can register with search engines," Blake said. "It works well at the moment because there are relatively few Internet traders. I guess when there are thousands it won't work so well."

Although not in the computer industry, Rebel Sport (www.rebelsport.com.au) launched a live e-commerce site last year and has faced the same sorts of issues. Internet manager Bill Moss said he has had no great dramas with incorrect pricing.

"These kinds of errors occur in our retail stores all the time," Moss said.

"If it happened on the Internet site, whoever was doing the picking and packing would notice it straight away and alert me.

"Our biggest issue has been adapting the internal infrastructure of the company to handle the Internet. Every physical retailer will come up against this problem."

Moss said that to be successful you have to make those mistakes for yourselves and learn from them. "You can't learn from other people because they don't know your business.

"We are sure that in six months we are going to be doing 10 times what we are today," he said.


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