Being in business is all about taking risks. In order to succeed you have to be willing to stick your neck on the line and take a chance every once in a while. However, when you’re in charge of running a small company, the temptation to rest on your laurels can be overwhelming.
Take ebusiness for example. By now, few business people need to be told how important it is to adopt ebusiness strategies. To stay competitive, companies need to embrace technology sooner rather than later. Nonetheless, up to now most Irish SMEs have tended to take baby steps when it comes to getting online.
Sure, most firms now have some kind of Web presence, but to succeed you need more than just a basic, out-of-date Webpage that offers little more than contact information. Companies need to set up websites that function as a delivery platform for their products or services. A recent study commissioned by 3Com found that few are actively doing so.
According to the survey, 77 per cent of small firms in Ireland are currently generating less than 10 percent of their income through ecommerce. However, one local company that is managing to make some money out of its online venture is ExSellAuctions.com, a business to business website that was set up three years ago by David Tracey.
ExSellAuctions is a site designed to facilitate the auctioning of industrial plant and machinery, commercial surplus and other goods and equipment. Since its original launch in 1999, over EUR1 million worth of goods have been sold via the site and following a EUR1 million investment in software development, the site successfully relaunched last September.
Tracey was already a well-known businessman thanks to his offline company, David Tracey & Sons, a business that specialised in disposing of the assets from liquidated companies. He decided to branch out into an online business when he found that not only was attendance at auctions falling, but that there was also a collapse in prices being paid for goods.
After initially considering a move away from auctions into property management, Tracey began to think seriously about setting up auctions via the Net after a journalist friend of his began sending him research. While Tracey had no real prior knowledge of the Web as a business platform, he became intrigued with the idea of transferring his business to the Internet after seeing what was possible. But, even though he knew he had a sound business idea that could work well online, Tracey never expected to encounter so many problems in making his dream a reality.
‘When we first set the site up three years ago there was nothing that prepared me for the troubles I’d encounter,’ he says. ‘At first we bought a number of off-the-shelf software packages for which we paid considerable sums. However, none of these packages were suitable for our type of business.’
Part of Tracey’s problem was that while popular online auctions sites such as eBay may attract plenty of visitors, many of them don’t commit themselves fully to the auction process. More importantly, they may bid for items, but then not come up with the necessary payment afterwards.
Tracey wasn’t particularly interested in operating an eBay-style website anyway. His idea was to create a specialised business-to-business venture that would be used to dispose of surplus stocks and equipment and unless he could find a way to ‘lock-in’ paying clients, he knew it would be difficult to succeed. ‘Initially, we found that people were coming on to the site and bidding, but then not collecting goods they had ordered. The ‘come and go’ nature of the Net wasn’t helping us and we had to decide whether to give up on the whole venture or to start again from scratch.’
In the end, he decided to go back to the drawing board and redesign the website. In partnership with the UK-based Triumph Computers, Tracey devised and created new software which would help hook serious vendors and bidders into a long-term relationship with ExSellAuctions.
As well as enticing clients to register with the website in order to hear about upcoming auctions, the revamped website now features multiple currency bidding, faster database access and a catalogue viewing facility which allows users to see the entire auction room contents by thumbnail photos.
According to Tracey, the success of the site is due to the fact that rather than simply hoping for the best, the company decided on a results-based business plan that had to have a beginning, middle and end. ‘Many businesses failed during the dotcom boom simply because they didn’t have a realistic plan regarding income,’ he explains. ‘However, right from the start we realised that if we didn’t perform we weren’t going to get paid.’
One of the extra benefits of being online is that Tracey has been able to attract business from outside of Ireland. Given that ExSellAuctions often deals with specialist business equipment, the site has been inundated with clients from as far afield as Africa and the Middle East. However, while ExSellAuctions is already succeeding in attracting clients from around the world, Tracey is reluctant to rest on his laurels. He says that the site works on a very flexible platform, which means that he will be able to introduce new features in the future. Tracey can already envisage a time when buyers will be able to bid for goods via their mobile devices and he’s particularly excited about the idea of streaming media with 3D graphics, a development he believes will make online auctions even better.
Tracey believes that you have to be prepared to keep on investing in your Web presence if you want to be successful. ‘If you have an offline business, you have to pay rent and rates, and likewise if you have a website you have to pay capital investment on an annual rate in order to remain innovative.’
However, Tracey feels that companies shouldn’t just be investing financially; like any offline business, there also needs to be the personal touch. ‘While the Internet is a powerful tool, it’s often been something that people have felt they can hide behind, when conducting business,’ he says. But being successful online only comes about through creating and maintaining good working relationships with people.’
08/05/2003
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