dabs.com boasts record sales, orders

Staking e-tail powerhouse claim

dabs.com, the UK online IT reseller, posted record profits and sales for the year to 31 March, 2002.

The privately-held firm posted profit before tax (PBT) of £2.54m, up 237 per cent on 2001's £755,000 on sales advancing 11 per cent to £116.5m (2001: £104.4m). The profits boost has worked out nicely for David Atherton, dabs.com's founder and CEO, who saw his salary jump from £80k to £451K.

The sales increase equates to 19.6 per cent
increase in shipments, reflecting falling prices, or ASPs as the computer industry insists on calling them, during the year.

Dabs.com reckons it is the world's biggest Internet IT reseller outside the US with £79.5m in 'unassisted' online sales, and in the top 10 - again outside the US - for "unassisted" online sales, full stop.

Atherton attributed the company's profit jump to Internet selling. "I was running a 1 per cent net profit mail-order business for years - as were Simply, Software Warehouse etc. and then the Internet came along. I didn't believe the stockmarket hype but I completely believed the technology hype. Self-service - unassisted sales - is the most important business improvement we have made."

He described last year's £755K PBT as a 'recovery year', from the previous year when the development and introduction of Internet selling system as well as inventory writedowns contributed to a £1.2m loss.

The company now sells only through the Net to consumers, accounting for two-thirds of turnover, while clued-up buyers in small firms operating in what Atherton dubs the digital industries are the only active 'unassisted' web buyers from the business sector, he says.

The bulk of dabs.com's non-consumer turnover comes from the public sector and the sales are made mostly over the phone.

"The public sector likes the impersonality of mail-order, and now the Internet. It means that there's no chance of compromising ethics requirements, " according to Atherton.

The corporate sector is the big lacuna in the dabs.com sales mix. Few companies buy unassisted over the Web, he says: - they have their corporate purchasing policies, and forms to fill in. Also, companies are keen to wangle best prices from their sales reps, a tactic which dabs.com ignores - its telesales team is not to negotiate on price.

dabs.com recently announced a recruitment campaign to bolster corporate sales, but the company will need to build an outbound account manager-type team, if it is to make more than a dent in this business.

As to the consumer side, dabs.com is flirting with Internet TV, -30 second streaming video ads on the Net. Atherton is keen to develop this vehicle, perhaps eventually through digital TV.

"We're only at step 1 of the Internet - the PC screen. MCommerce has stalled - nobody gives a stuff about data on phones, and they're waiting for the new equipment. T-Commerce has stalled - the failure of ITV Digital and the intransigence of Sky, which is acting like a monopolist over its prices -means that it's not happened yet. But its time will come. In 10 years time, mail order will be a video with a press button to buy. Television is the best sales medium."

The FY02 results in full are here (PDF). ®

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