Online Retail Widens its Net

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INNOVATORS E-trade newcomers are finding new ways to use the medium, reports Lia Timson. THEY make no promises, give no guarantees and are still learning their trade, but the founders of Australia’s newest online store are full of ambition. “We want to be bigger than eBay,” says Alain Sarfati, co-founder of zazz.com.au, a site that sells only one product, in large quantity, each day.

Zazz’s main focus is electronic gadgets, which Mr Sarfati says everyone loves and can’t resist, but it also sells toys and assorted homemaker items one day a week – Sundays. Items are advertised for sale at midnight. If sold out early, buyers must wait until the next day for a different one. Sometimes the company advertises a Mystery Grab – a collection of three surprises, for $14 – or Zazzmania, a special day when several products are offered, one after another, for an average of 20 minutes each. Popular items include SD cards, MP3 players, USB gadgets and media centres. Mobile phones and digital cameras have not been listed because Zazz has not yet found any offering better value than elsewhere.

Mr Sarfati says the site does not operate as a clearing house for electronics stores. It imports products directly and sources others in Australia. However, he says clearing overstock on behalf of vendors and retailers is a genuine strategy that may be employed in future. Buyers unhappy with their purchases are advised to swap them on the site’s forum, or sell on eBay. Returns are accepted only if the product is faulty, within warranty and by email arrangement.

“We want to create an online store that is very different and very transparent,” he says. According to his partner, software developer and veteran of Australian IT Alfred Milgrom, Zazz is “everything you want, nothing you need” – a reference to the digital generation’s tendency to buy gadgets on impulse. “You don’t come to the site because you need a hard drive, because you don’t know when a hard drive will come up.” It is modelled on the unrelated American woot.com site, but designed to be “more Australian” in language and tone. It aims at capitalising on members’ sense of community, gathering buyer reviews and requests, which guide the selection of new items.

“If it’s just one-way preaching, it’s very restricted because it doesn’t (allow us) to pick up mistakes and doesn’t give diverse points of view. Communities that encourage feedback are the only ones that have a future.” Unlike Woot, Zazz does not take paid advertising, but its operators aren’t ruling it out. All options are being considered, including the possibility of parallel sites for other product lines such as auto parts and wine. Its undisclosed revenue is derived from sales margin on large volumes, but Mr Sarfati says that is enough to trade in the black over the past two months. “There are people who look at the money-making aspect only. We’re looking at the fun, the social aspect as well. If someone creates a beautiful avatar, we send them a gift, we don’t even tell them. The best part of it all is the fun and the (member) involvement. The money will come,” he says.

Mr Milgrom owned game development studio Melbourne House, which was absorbed by Infogrames and later sold to Atari. He owns Smarty Pants educational software marketed by Dataworks. Zazz employs eight people, has an office in the inner-Melbourne suburb of Prahran and a warehouse. The site is built on open-source software – phpBB for the forum and osCommerce for the shopping cart – and uses eWay as its payment gateway; eWay links directly with St George Bank, circumventing the need for Zazz to store credit card details. Zazz claims 8500 registered members in its first six months of operation.