Winds of change blow at PCAuction

Online IT auction site PCAuction has shut down, diverting traffic from its site to the site of sister company PCAdvantage.

The company’s managing director, Aaron Blackman, established the PCAuction business as part of the now-defunct Mercury IT group, prior to going it alone with the help of investment group Marshall Holdings. The PCAuction business model is centred around the online auction of discontinued and refurbished lines.

In October 2002 the company diversified, opening a second Web site called PCAdvantage for the sale of new stock to the business market at fixed prices. E-Store founder and managing director, Steve Spilly, was hired to manage this part of the business.

The company noted that the PCAuction side of the business began to wain in December 2002. Sales skewed off, as did the prices at which most customers were prepared to pay for refurbished stock. The company decided to migrate the refurbished and discontinued stock from the PCAuction site onto the PCAdvantage site where it would sell at a fixed price.

“It just didn’t make sense to operate two e-commerce sites and have marketing costs for two brands any more,” Blackman said.

But the change rapidly created complications for customers. Blackman said that when the refurbished goods were posted for sale on the PCAdvantage site, there was a degree of confusion among customers as to which goods were new and which were discontinued and refurbished stock.

The dilemma has caused the company to reconsider its options. General manager of the PCAdvantage business, Steve Spilly, said that once the remaining $250,000 worth of refurbished stock was cleared through the PCAdvantage site, the site would only sell new stock.

He said the majority of IT buyers customers preferred buying new products at a fixed price.

“Customers virtually made the decision for us,” he said.

Blackman, on the other hand, said the company remained 100 per cent committed to the refurbished and discontinued stock model, and that it was only the online auction model that had been abandoned.

“We are very much committed to the refurbished business,” he said. “It is very profitable and we have absolutely no plans to abandon it. The only change will be our model to market – it is fair to say that we won’t be supporting the variable price [auction] model any longer.”

Blackman said there had been “an internal misunderstanding” between he and Spilly over the future direction of the business.

There were many proposals being pitched within the company about how to proceed in the future, he said. The confusion stemmed from his absence from the office while he worked on some "special projects" - that were likely to result in changes to the business’ logistics operations - and “new channels” through which to sell the refurbished and discontinued stock.