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Businesses debate role of resellers on the net

Businesses debate role of resellers on the net

Although nobody is questioning that the internet will change the role of the middleman in the retail world, exactly what shape resellers will take online is still the subject of great debate.

Out of the five companies participating in what was billed as "The Business Design Debate: Reshaping the Way We Do Business in the 21st Century", here in London yesterday, each company had its own vision of how the internet would affect its business model. But they all agreed on one thing -- resellers who traditionally lie between the company and the end user may face the greatest changes in the internet economy.

"Banks in the US are offering free PCs to stay in banking, and retail companies are losing money to get online, so what is the right strategy for leadership in this business model?" asked Andrew Lees, director, emerging markets for Microsoft's UK branch, Microsoft Ltd, the company that sponsored the event.

Microsoft, for example, has a history of reaching customers through resellers, but the internet is forcing companies to come up with innovative new business models.

Companies such as group-buying website letsbuyit.com have based their business model around the potential disappearance of the bricks-and-mortar middleman. Letsbuyit.com puts products online for users to purchase, and as more users agree to purchase the item, the price drops because of the quantity involved.

"With the internet, a rug seller in Afghanistan could sell rugs directly to the consumer, completely cutting out the middleman," said Soames Hines, global marketing director for letsbuyit.com.

However, before this scenario becomes common, certain fundamental technology and societal changes need to occur, according to John Molyneux, chief executive of online business directory Scoot (UK). "At the moment, it's doubtful that the seller in Afghanistan would even have a PC, never mind an ISDN line," he said. "But eventually it will happen, and the customer will be king."


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