Graduating from a position as Australia’s largest eBay PowerSeller, AuctionBrokers co-founders Paul Greenberg and Michael Rosenbaum are finding e-tailing a challenge worth getting into.

Launched just over 12 months ago the pair’s new site www.dealsdirect.com.au is growing at a rate of 30 per cent a month.

The company has just moved into new premises with a 6000 square metre warehouse packed to the gunnels with cut price goodies, which the company hopes will propel it to the number one spot for online sales.

Already the site is listed as the fourth most popular e-commerce destination in Australia behind, The TradingPost, eBay and Target.

“This looks like it’s going to be the online Christmas we have been talking about since 1999,” said Greenberg, who said the product going out the door is not restricted to DVD’s, CD’s and digital camera’s. Greenberg said DealsDirect is shipping jukeboxes, electric treadmills, garden furniture, even grandfather clocks in volume. The customers are buying these items sight unseen, demonstrating that if you treat your customers with respect and deliver good product at a good price, people are now happy to buy online, he said.

The company has grown to about 30 people, with five of these based in customer care, others in marketing and others as stock scouts, but the largest proportion work in the warehousing and logistics area.

The company sells not only direct to the public in small quantities, it has a sizeable business supplying other retailers and e-tailers with pallets of similarly priced stock offering free shipping.

Though Greenberg said email marketing is important to the mix, with the company doing a lot of email (subscribers receive as many as three a week), the company has also dabbled in a little radio advertising. It also leverages its significant AuctionBrokers exposure on eBay by pointing customers to the DealsDirect site. Greenberg says AuctionBrokers, an early eBay Australia seller pioneering the $0.99 auction for high-value goods, would typically have as many as 1500 active items on eBay.

Greenberg explained that key to the success of the company’s e-tailing business is careful buying. DealsDirect sources stock both direct from China and through local distributors targeting both branded and white label products. Occasionally it picks up distressed stock and orphaned stock in liquidations.

The product range is not so much designed to make DealsDirect an online department store as to deliver great prices where and when it can. This sometimes means reacting quickly to get product in and out of the warehouse as quickly as possible, he said.

We are not closed to the brands, but we find there is no real angle with a brand. There is a lot of channel management involved when you are dealing with branded product and you wouldn’t be able to get the favourable pricing because they have to protect their other channels, explained Greenberg. “We don’t aim to be a David Jones on line,” he said. “That involves too many lunches and not enough business.”

Though the company sources somewhat opportunistically, there is a growing need to switch from the present “intuitive” category management to a more metric driven approach, he said. Managing the categories as they grow is a challenge Greenberg is taking on now in anticipation for the year ahead.

The biggest savings, however, come from the company’s low cost of doing business. “If we were in a Westfield shopping centre we would be in a little store in the corner somewhere,” said Greenberg. Instead, getting the logistics right is critical and although he admits there is an argument for third party logistics (including drop shipping), the company has gone down the path of providing its own.

“That is where the action is,” he said. The need to be reactive and nimble lends itself to home grown logistics allowing DealsDirect to act quickly if it makes an opportunistic buy, explained Greenberg.