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Online auctions flow into channel

Online auctions flow into channel

Dataflow unveiled its IT auction site last week to pit resellers against each other in online bidding for excess or run-out stock in what the company claims is an Australian first.

Jeffrey Tobias, Dataflow's executive chairman, argues other Australian online auctions are "run by media organisations for consumers selling to consumers.

"Our site is only for IT resellers looking for end-of-line, run-out, or surplus stock which they use for loss leaders and special promotions," he said.

Dataflow will start its auction site by offering its own excess warehouse stock but in the future it plans to offer resellers, software and other IT vendors a chance to auction their excess inventory, Tobias said.

The company will hold three auctions a week running 24 x 7 and will notify its resellers of up-and-coming auctions via e-mail.

Tobias refused to detail projected revenues from the site. "No one knows what income auction sites pull because there's no local history and all other business-to-business (B2B) sites in the US are closed communities."

However, he did reveal the company has invested more than $500,000 in the venture. Tobias said the decision to build the site follows evidence from US dealers and retailers making healthy profits from online auctions. In fact, he purchased software from US company Total Site Services to use on the site for an undisclosed sum and customised the software to fit Dataflow's needs.

However, it appears B2B online auction sites have a long way to go before achieving widespread acceptance in the channel. As an example, Edutainment proprietor Henry Ho was sceptical about the success of B2B auctions. "It depends on what they offer, the quantity and the price. I don't want to buy 500 units of something if I can't shift them," Ho said.

But despite his reservations, Ho acknowledged he buys so-called fire sale and end-of-line stock through IT wholesaler Unlimited Computer Services.

This market is what Tobias is hoping will attract resellers to the online auction.

Unlimited Computer Services' managing director, David Alwin, said his company intends to set up an online auction site but said it won't happen for a few months yet.

According to Tobias, since Dataflow introduced online shopping for its 3500 dealers in April, revenue has grown by 300 per cent with around 1000 dealers regularly ordering online.

Tobias predicted, with the success of online auctions, excess inventory worldwide will shrink and he estimated that by 2002, 60 per cent of all revenue would be derived from worldwide B2B auction sites.

The company reports the site is secured through the use of a Thawte SSL (Secure Socket Layer) certificate.http://www.auction.dataflow.com.au


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