Australia Post gets Smart with new deal

One of the last bastions of the dot-com phenomenon is services and e-commerce outfit Smartbuy has announced a three-year partnership with Australia Post's electronic fulfilment service, Post Logistics.

The deal establishes Smartbuy as the preferred partner of Post Logistics in the provision of e-commerce services for retailers, providing warehousing and distribution for Tandy Australia, the first retailer to sign up with the company. The deal will also cover Smartbuy's future retail partnerships.

"We have been working on this project for about six months, developing a custom-built solution tightly integrated around what we believe retailers need," said Smartbuy managing director, Tony Gattari. "It is a true partnership in that our entire e-commerce platform now links the Post Logistics warehousing and fulfilment. Anytime we get a new client, Australia Post gets a new client because we are one and the same."

The partnership will offer Tandy scalable warehousing, inventory management, automated pick and pack fulfilment. The Web site infrastructure was developed by Uniqueworld for the companies. It will also enable Smartbuy to consolidate purchases from various distributors for shipments -- a process referred to as cross docking.

The deal includes using the Post Logistics' transport and distribution network. Retailers will be offered a variable rather than fixed cost model, minimising the cost and risk of setting up e-commerce facilities.

"Retailers do not need to invest large capital sums in setting up or adapting their own warehouses for e-commerce," Gattari explained. "What we have found is that, although some retailers have centralised warehouses, they are not built for e-commerce. This solution means they don't have to invest in building a new facility or modifying one."

Tandy and Smartbuy will share the profits of the new joint venture. Revenues from the Post Logistics partnership are related to volume. As the volume increases, the charges also increase.

"We are very comfortable with that. Our major requirement is that Smartbuy doesn't burn much cash and in order to do that we have outsourced the key functions."

According to Post Logistics general manager Alec Ceselli, the deal will help Smartbuy and its partners overcome one of the major stumbling blocks of e-commerce -- cost and efficiency.

"It also allows Smartbuy to view all transactions from end-to-end, so they provide their customers with detailed information on any delivery," he said.