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Dabs Direct launches Playdirect.com

Resellers flock online

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Resellers are flocking to get online and branch out to other areas apart from selling IT kit. Bolton-based Dabs Direct is set to launch website Playdirect.com, which will sell music and videos, by Christmas. Last week saw the launch of jungle.com, the cyber initiative of Steve Bennett, Software Warehouse MD, which will sell also music and videos (as well as traditional IT equipment)via the Web. But that is where the similarity between the two sites ends. Dabs Direct will keep its IT sales separate and, apart from the odd Palmpilot, will not sell any IT hardware through Playdirect.com. Jonathan Wall, sales and marketing director of Dabs Direct and subsidiary Playdirect.com, said there would be little overlap between the reseller business and new website. "Playdirect.com will not try to be all things to all men. "We want to build an area where people go to buy things for their play time – for the things they do when they finish work," said Wall. Users will be able to buy CDs, DVDs, console games and gadgets such as mini-disk players from Playdirect.com. Jungle.com's Bennett has combined the online PC sales of Software Warehouse with the jungle.com website, and will also continue to sell IT kit through the existing Software Warehouse retail outlets. Bennett compared his model to that of British Airways and Go - its cheap alternative flights business. "Some people will continue to prefer to buy by phone or retail, even if it is more expensive than buying online," he said. However, Dabs is pushing to be an Internet reseller, according Wall. So why are dealers branching out into selling other products? For Bennett, it’s a matter of getting as much traffic to his site as possible. "There will be enough features on there to get people to come into the jungle every time they use the Internet," he said. Around 10,000 users have joined jungle.com so far, and the site got eight million page impressions in its first two days. Over £1 million has been spent on marketing the venture, with another £7.5 million available for the next 12 months. And there are other features planned for the site - this week it will launch its free ClipArt section, allowing users to download pictures from the web. "We want people to come to the website as often as for as long as possible," said Bennett. Wall commented: "At the end of the day, people aren’t going to buy more IT equipment, but a greater number of people are going to want to buy over the Web. "Businesses already on the Internet will therefore get a bigger slice of the cake," he said. The two ventures will be in competition with US companies selling DVDs and CDs, such as CDNow. Wall said Playdirect.com would be able to handle such rivals due to the existing infrastructure at Dabs. "We will use our own logistics to enable us to keep margins tight," he said. "Also, there is a huge untapped market. A lot of UK end-users are buying CDs in the US and taking the risk of getting caught by the taxman." Bennett pointed out that the secret of his success would also lie in utilising the logistics and infrastructure already in place at Software Warehouse, but said there would be many other imitation companies that would crash and burn. "There will be lots more competition in this area over the next few years, but the only ones that will succeed will be those with the infrastructure in place." Both companies are currently expanding their storage facilities. Software Warehouse is in the middle of doubling the size of its existing 60,000 square feet warehouse. Dabs Direct is currently buying and extra 50,000 square feet of land to cope with the extra logistics involved. Both Wall and Bennett said companies in the channel would try and jump on the online bandwagon. However, they claimed to be the only two IT reseller companies in the UK that were large enough to take the business on, and which weren’t owned by US giants. "Because we come from an IT background, the IT channel has the perfect platform to grow from. "We know the people we’re selling to – the people online are the people currently buying IT equipment," said Wall. "But the businesses here in the UK that are owned by global American firms are too busy concentrating on IT. And besides, it would take them too long to get such decisions past their boards of directors," he added. Bennett also warned there would be casualties: "There will be lots of fatalities. It is easy for people to develop the front end and have a good website. But if you haven’t got the background established, the company will fail." ®

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