Buy.com launches into price war
The bitter price war between online resellers is set to intensify with the official UK launch of Buy.com next week.
The bitter price war between online resellers is set to intensify with the official UK launch of Buy.com next week.
The reseller's product fulfilment will be handled by Ingram Micro. Buy.com's site went live for testing last week, although it will be officially launched at the end of the month. However, the reseller has already signalled its intention to be the UK's leading internet retailer by pledging to beat any other price by £1. Buy.com launched in the US in October 1998 amid criticism for selling below cost.
While Buy.com refused to divulge details of its business model, David Atherton, managing director of Dabs Direct, predicted the reseller's presence will shake up the market. He said Buy.com is expected to affect the sales of all online resellers and mail-order firms in the short term.
But he said Dabs Direct expects to win back sales over time with its customer service. "According to reports in the US, Buy.com's customer service is very basic," Atherton said. "If you don't do the customer services stuff, it won't matter, it's still the classic values that count. But Buy.com is a threat and will be a strong competitor."
Tony Price, director of online reseller WStore, dismissed the concerns about Buy.com. "I'm not worried but quite encouraged. It will bring more site traffic to the web and will get more people buying on the internet," he said.
Greg Finney, marketing and business management director at Ingram Micro, Buy.com's distributor, said he also expected "some cannibalisation" of the market.
Ingram has confirmed it will handle product fulfilment for Buy.com and is in the process of hiring staff for its warehouse and purchasing department to handle the sales increase. Finney said Ingram had also signed up 20 new vendors at Buy.com's request and will recruit between 20 and 30 more.
But Finney denied that Ingram was giving preferential treatment to Buy.com. He said Ingram offers the same level of service to all its customers.