Resellers missing e-commerce boat

Resellers missing e-commerce boat

You would bet on Australian resellers leading the way in developing e-commerce business models, wouldn't you? Unfortunately, recent channel research has shown this not to be the case.

Results of an ARN reader survey conducted by rental finance company RentSmart show only 10 per cent of respondents having already established an e-commerce infrastructure. A further 46 per cent intend to do so in the near future, but alarmingly, 40 per cent have no plans whatsoever to adapt their business to the pending virtual economy.

Successful operators already trading on the Net and analysts contacted by ARN last week agreed - it is an emerging market and a business opportunity resellers ignore at their own peril. Even those guilty of currently ignoring this opportunity recognised its inevitable evolution.

So why the delay? One thing is for sure - there are going to be casualties amongst those procrastinating too long.

Brendan Walsh, marketing director for catalogue trader PAW Products, sees the Internet providing relief in a "price competitive world". PAW's Net strategy is under way but is "not a great proportion of business as yet", but is recognised as a "cheaper way of doing business.

"Total cost of operations is the equation we live and die by," Walsh added. "The Internet is our future, but being a mail order business, it doesn't really change the company structure. It just gives us a cheaper way of doing things."

Walsh was not surprised many resellers were looking the other way. "What did 40 per cent of businesses do when Harvey Norman and Officeworks came along?" he asked. "Nothing. And a good percentage of them disappeared."

Ron Harris, managing director of e-commerce success story Harris Technology, said he will do half a million dollars worth of business on the Net this month and is dumbfounded people aren't heeding the warning signs.

"I can see a million dollar month and it will be this year," Harris said. "I think those who ignore the Internet are absolutely crazy. I can't possibly understand how these people can just hope it is going to go away.

"It is a new model for doing business and it forces a new regime on you, but it is a good one because it is a customer-service model. We have just improved our service overall which goes hand-in-hand with catering to a new sort of customer."

Channel diversity means that for some, such as Bill Bowman, director of Sydney's Second Byte Computers, "cash is king and it always will be". He sells pre-loved computers to a low cost market which needs "tools not toys".

Way of the future

"As far as trading on the Net is concerned, I don't even know how it works," Bowman said. "The thing is, if you work in the computer industry you don't trust computers. Our focus is elsewhere at the moment - but it is the way of the future."

Richard Verren, director of Dynatechnics, a Sydney-based Optima dealer, ruefully admits the only Internet presence he has at the moment is an e-mail address.

"We are probably so busy focusing on selling systems we have very little time to revamp and reorganise," Verren said.

ARN's survey results concurred with local channel research undertaken by Inform Business Development, according to research director David Hancock. He pointed out that 80 per cent of the channel is comprised of small businesses weighing capitalisation problems against what is currently perceived as negligible monetary benefit.

"The channel as a whole doesn't seem to think the Internet will be a threat or a benefit for some time yet. People like Ron Harris know otherwise," Hancock said. "Under margin squeeze, all these resellers have got to streamline their businesses to survive. The Internet offers great opportunities for dealing with suppliers and customers."

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