The Web-based zero margin reseller is not only already here, it is about to show its muscle in the channel.
From a staff of 2 four months ago, it is now a team of 22, and sales have been growing at 60 per cent a month.
Although online retail trailblazer Wholesale Direct (WD) may have been forced to adjust the launch of its new look Web site www.wholesaledirect.com.au back a month to October 1, it will herald an aggressive new business plan.
The new plan will see WD setting up a franchise operation providing fulfillment and services by real bricks and mortar channel businesses, similar to the way that petrol stations sold petrol to attract service and repair business.
And according to WD marketing director Michael Tregurtha, the company is preparing to move into top gear, which will see it more strongly targeting the SME market, and with a more user friendly site that will attract a wider audience than IT professionals. "We plan on being a noticeable player in the e-commerce area," Tregurtha shyly touted.
WD, which is a subsidiary of Sydney-based Computer Way, sprang to prominence in April last year by selling products to its end-user customers at Tech Pacific's dealer buy prices. At the time, the business plan was for WD to promote, and through Computer Way, provide the services associated with the products that it was supplying at zero margin. The concept raised the ire of many in the channel who accused WD of speeding up the end of any margin in the supply of IT hardware.
But 18 months on, it is now revamping its Web site and reviewing its supply relationships, while the beefed up management team is preparing for another major online assault on the SME market. And it won't just be computer products from the one supplier. Tregurtha revealed that the site will also include mobile phones, furniture, stationery and eventually flowers and liquor.
"Just like a co-op, we want SMEs to feel very comfortable that we are looking after their interests," Tregurtha said. Recognising the highly competitive space (SME market) they are targeting, Tregurtha claimed that WD has some advantages other than its price point. "All online sites will have specials, but on a basket of the more than 20,000 products we will offer, we'll be cheaper," he said. "But the site will be easier to navigate, based on joust menu principals. The payment options are expanded, and the product range will be broader and suited to the target customers. We will also link the services to a local associate."
But for now, the behind-the-scenes work continues, and the heat in the online channel is turned up.