High five for Express Online

There is little denying the Internet has changed the face of not only the IT industry, but every industry possible. Today, nearly 1.3 billion people go online and it is that coverage and success which enabled distributor Express Online to reach its five-year birthday this month.

Using a solely online model has enabled the Sydney-based firm to ride the growth of Internet purchases and procurements over the past five years. In the US alone it is forecast there will be US$174.5 billion of Internet-related sales during 2007. Last year, online computer hardware and software sales totalled US$17.2 billion in the US and you can bet similar patterns can be found on local shores, too.

“We are very excited and proud to reach five years,” said Alison McQuarrie, general manager at Express Online. “We’re Australia’s first and still to this day only 100 percent online distribution option for Australian resellers.”

All of Express Online’s resellers visit the firm’s website to process almost every transaction possible from taking orders, processing returns, gathering product information, quotes, obtaining invoices, and proof of deliveries.

“Resellers can do that at anytime, when it suits them. From that we have found that a lot of our resellers place their orders out of core business hours. Forty percent of our orders are placed between 4pm and 9pm. Resellers are often out in the field during the day and doing the purchasing and procurement after hours,” said McQuarrie. “Our proposition is around providing a different distribution offering for resellers. We like to think of our offering as unique in terms of the level of service we offer alongside the functionality and interaction of our website.”

Express Online also has a customer service team of three people who field calls from customers, however McQuarrie stressed that the firm attempts to push as much information online as possible. “Customers can and do call us, we have hundreds and hundreds of calls a day, but what we try and do is identify ways to reduce that by sending resellers the information they need to our website.”

Building a virtual presence

“Our model has not changed too much over the years,” said McQuarrie. “We launched online from day one. A few things have changed, we have grown substantially since then. We started with seven vendor partners, we now have close to 30. We started with four or five staff, we now have more than 20 staff.
“Our reseller mix has changed slightly, too. Initially we were pushing into the SMB space and still continue to do that today. We envisaged that our model would suit those types of resellers in that they didn’t have a huge amount of account management and pre-sales support and that has proven to be the case. However what we have since found is that it also suits a much broader range of resellers, with us gaining some very large resellers. There is now not many segments of the Australian reseller community that we don’t already deal with.”

McQuarrie said there is not a “typical reseller” for Express Online due to the transition of its reseller base to incorporate these larger channel players.

“If you’d asked me three years ago our typical resellers would operate in the SMB space, but today that has really changed. The ones that we go after, the ones that are of particular interest to us, are still in the SMB space,” she said. “That is where we can offer a lot of value with marketing tools which enable those resellers to rebrand and pass this onto their own customers.

“We want to differentiate ourselves and offer the types of services to our resellers which our competitors can’t. We can provide that constant interaction by way of our marketing material, but also resellers have traditionally not been well looked after in the past by the big distributors out there.”

McQuarrie said it is widely acknowledged that some distributors have minimum orders and are cutting their reseller lists, and this has seen Express Online picking up hundreds and hundreds of resellers who better suit the distributor’s model.

“We market to around 7000 resellers on a bi-weekly basis. In terms of active resellers we are well into the many thousands now – we are dealing with one to two thousand resellers on a regular basis. We are picking up new resellers at the rate of knots and signing up five to 10 new resellers a week. Obviously some get struck off as well, but we are signing them up pretty quickly.”

Express Online has a vendor stable of close to 30 players including players such as Apple, Canon, Microsoft, Adobe, MYOB, Brother and a whole range of other peripheral vendors to support its product line – ones such as Kensington, D-Link, and Netgear. “I guess our aim is to provide our resellers with a comprehensive offering of the top-tier vendor partners within each given space,” said McQuarrie.

Online advantages

The vast majority of businesses fail within the first few years of their interception, so it could be a fair assumption to suggest that Express Online has benefited from a purely online model which could have been deemed risky back in 2002.

“We feel that distribution in terms of the commoditised end is going to go this way [online]. The same way the banking industry has moved from people walking into branches to people going to ATMs, to people going to Internet banking. We feel there will be a similar type of evolution for IT distribution at our end of the market,” she said. “That means that the people who are going to be successful in that space are people who can offer a very efficient, not compromising on service, quick and easy offering. Our model enables us to manage our costs as we do not have huge overheads and can invest our time and money into organising our systems better.”

McQuarrie claimed that Express Online offers resellers a unique way of doing business, which
might mean them not having to pick up the phone and call for assistance.

“We save our vendor and reseller partners time. We try and work to their needs and have our model operate around what it is they require from us. Most of our changes have been driven by our customers telling us what they need.”

Concerning advantages for the distributor’s vendor partners, McQuarrie believes that Express Online brings them into spaces they have not reached before.

“We have given our vendor partners a broad touch to a lot of customers they have never heard of and have never been on their books before. All of our vendors want incremental growth, they don’t just want us to take business from our competitors.

“You’d be crazy if you did not have an online presence and we still believe that online is the way the market is going to end up. Slowly a lot of distribution players are falling by the wayside because as margins come down costs are either going up or staying the same – some distributors are struggling. We haven’t seen that because we have a model that lends itself to the types of products and organisation that we are dealing with.”

The next five years and beyond

Express Online recently toasted its five-year birthday with a Moroccan feast in Sydney (see page 52), but it is still keen to look forward to the coming years.

“We are always looking to the future. Nearly all of our future plans are driven by our customers or our desire to have our customers getting a better experience from us. Whether that be new innovations onto our website, or new areas we push into from a vendor perspective, or new technology we offer,” she said. “A few areas I would pull out include our push into the software licensing space, that is something we are very committed to. We launched licensing about
a year ago on our website and there has been incredible uptake from our resellers.”

Express Online will also be pushing new innovation around dealing with the firm to provide a lot more pleasurable experience according to McQuarrie. “There is definitely lots on the go. We are always looking at offering a broader range of vendors, we are in discussions with a few [vendors] now.

“A lot of the changes in the market, to date and in the future, are going to be very positive for us. We have found that a lot of our vendor partners are wanting to work more closely and align themselves more closely with their distribution partners. I think consolidation will continue to happen in the market and the distributors selected to stay in the line-up are ones that resellers are really supporting.”

Businesses are increasingly becoming more comfortable using the Internet for mission-critical operations and that is a trend which Express Online has been taking advantage of for the past five years. Other distributors continue to build and expand their online presence as it forms an essential tool in succeeding in the competitive Australian IT distribution landscape.