Australian online retailer uBid has appointed a new general manager to oversee its online auction site.
Gary Massie has replaced Chris Hitching, who has been appointed CEO of LibertyOne's online auction arm - a business established to develop online auction sites throughout Asia.
Visitors to the uBid site log on and bid in auctions to win excess and end-of-line merchandise from brand name manufacturers. Bidding begins at $9, there is no reserve price and the products are all backed by warranties and guarantees.
"The big difference is that we [uBid] operate on a business-to-consumer, rather than business-to-business basis," Massie said. "It is a different method of going to market and the opportunity to get a bargain is fantastic."
Massie joins uBid from General Electric, where he was chief executive of GE Lighting in Australia and New Zealand. He said uBid offered a very different approach to retailing because it utilised the Internet to move excess and end-of-line goods without the expense of running a bricks-and-mortar enterprise.
"On the one hand it is an auction system with no reserve prices and customers have the opportunity to pick up a bargain or opt out if the price gets too high. Typically, there is a 20 per cent saving. One of our customers recently purchased a ride-on lawnmower for less than $4000.
"The other aspect is that there is no bricks-and-mortar store. We only sell brand name products, and our target market is very happy to take up last week's model, so there is no need for our customers to go and look at the product."
Massie said the site also allowed regional customers more choice and the chance to pick up a bargain.
However, he maintains that, in the short term at least, the Internet will have little effect on traditional retailing.
"Customers will continue to go to the stores, even if it is only to do comparison shopping. However, I think in the longer term, the Internet will win every time," he said.
"The uBid proposition represents a very small piece of the retail distribution chain. We are not competing with the larger retail world because we sell end-of-life products."uBid's auction site sells a range of products, from typical online retail fodder such as computers and electronics to lifestyle merchandise like homeware and sporting goods. It recently added jewellery to its catalogue.
Customers do not need to constantly monitor the site to buy a product. They simply enable BidButler, which automatically bids for the customer up to a nominated price range.
"What is interesting is how we are changing the game for suppliers," Massie said. "For example, Shriro Australia (an electrical supplier) used to run four warehouse sales a year. They had to keep that stock for the quarter, run the sale and then write off what was not sold. Now, they ship us their end-of-life stock on a weekly basis, allowing their retail channels to focus on new products. We sell in single units so we are able to move excess product very quickly. It is introducing a more efficient stock handling system into the equation."
Additionally, the buying price does not impact on the sale price, he added.
"It is almost a total reversal of the traditional retail approach in Australia. We are not squeezing suppliers for a price and we are selling at the price that the consumer wants to pay."