Online auction house PCAuction has announced its intention to conquer the e-tailing world with the launch of an online IT superstore, PCAdvantage.
Former E-Store founder and managing director Steven Spilly heads up the new division, which will offer fixed price discounts on everything from routers and switches to consumables and software.
"Until now, our model has been to select big brands and heavily discounted products," said PCAuction managing director Aaron Blackman. "But we started getting a lot of enquiries for a lot of products we didn't have. There was this big gap in the market, so it made a lot of sense to create another brand."
The site will also cater to the small business market, an area not typically covered by e-tailers, according to Blackman.
The secret to the new business, according to Spilly, is the development of an ERP system that integrates every aspect of the business. The company partnered with Solectron Global Services to implement the system. Keen to avoid the reporting problems that plagued E-Store, PCAdvantage has been on trial for the last month and has held up to the most rigorous of tests: spot specials.
"We sold 27 wireless keyboards in three minutes with an e-mail blast," Spilly said. "It was so fast, I thought it might have been a technical error."
While there is no shortage of IT e-tailers in the market, Blackman says PCAdvantage will differentiate itself in remarketing discontinued or overseas products.
"We compete on price by partnering with leading distributors and vendors, but we also have local and international supply chains with unique product offerings at a lower price," Spilly said.
This must be handled carefully, so as not to cannibalise the local channel. "We chose products that have been discontinued locally, or not sold locally," Blackman said.
The company did not rule out a bricks-and-mortar play and is already looking at strategies to move into the physical world. But for the moment Blackman and Spilly are happy to work on their e-tailing model. The company will also trial a TV campaign to build awareness of the site.
"The reality is if you do a good job you can get the volume online," Spilly said. "Our aim is to conquer the dotcom space and do it well before we diversify."