Tuesday, June 19, 2012/
OzSale’s founder Jamie Jackson manages to squeeze this interview in while in his car driving between meetings.
After all, life is fast paced for Jackson, with OzSale’s recent acquisition of its competitor Buyinvite and the online shopping club’s rapid international expansion.
Right now he’s enjoying the ride and tells us all about how the online market sales are set to double in the next 12 months, explains why there’s no time to analyse online processes and tells us why customers don’t need three-hour delivery windows.
Chief executive of OzSales
You’ve just acquired Buyinvite, so what’s OzSale up to now?
Our revenue is $250 million, and we’re achieving those numbers currently. We see increases coming over the next 12 to 18 months with our expansion into Asia, into south-east Asia and China. We also see an enormous uplift into the Australian and New Zealand market because the market’s still extremely young here.
When you look at it compared to the rest of the world we are still in a small bubble over here, it has not really exploded like the rest of the world on online marketing. We’re very active as an Australian audience, we’re very active in New Zealand, but it’s still got a long way to go. So there’s a lot of numbers, a lot of people we can still reach in this environment to give them some great products at some great prices. We love our members.
Our members today stand at about the 5.5 million mark. We’re happy that they love to love us; they tell us if we’re doing it wrong, and we listen. So, without the members and without my team, we wouldn’t be in the situation we are in today, which is the number one discount retailer in Australia and New Zealand.
What are you doing to grow OzSale?
We’ve entered into south-east Asia. The Buyinvite acquisition just cemented us as the clear winner in the Australia and New Zealand market. Growth lies with south-east Asia and China. And these markets are colossal; if you look at the audience in those regions – in south-east Asia there’s a billion people.
If you look at Indonesia, Korea, Japan, Malaysia, Thailand and Singapore, there are enormous markets and they’re very active online users. Eventually, in the next few months, we’ll be going into China as well.
The Buyinvite guys who came on board offer us an exceptional skill set, which is already hard to find in this platform because it’s such a new business. So we saw them as key management people in an international role where they can drive offshore ventures that we’re putting in place. We’re also opening in Europe, not to sell products, but to bring products from Europe to the Australian and New Zealand consumers. We’ve set up the LA office and the UK office to do exactly that.
And how are you going about that?
We’ve put teams in place. Stephen Coles, who headed up Buyinvite, is now based in LA. He’ll be doing a six-month stint there and we’ll be opening up photography and a digital factory. Our buying team of ten buyers will be approaching all the brands in the US market to liquidate their stocks into south-east Asia, Australia and New Zealand. Stephen will then go onto Italy, where we’re going to be opening an Italian office.
How will this expansion make OzSale more profitable?
We can cut out their key cost of distribution and we can work with both suppliers through the acquisition of Buyinvite. We can reduce our costs with Australia Post as well, because we are now one of the leading shippers of parcels in Australia. So we can sit down with them and talk about different rates. We’re also talking with all the search engine people to discuss rates with those guys. On the logistic side of things, where we’re losing their distribution centre and putting it all into ours, we’re saving an awful lot of money there and it’s really showing within weeks of having this business – some very good gains for us. So we’re very happy to date with where we’ve got to.
And what about OzSale’s international expansion, how will that drive profits?
That will assist profits because we don’t have to buy the product. Before this we were buying product and shipping it across to Australia. Now we’ll work with brands in America, the UK and Italy, where brands will put products in there and ship direct to the consumer from those destinations. This will alleviate shipping costs, distribution costs in Australia and our products get to the customer a lot quicker.
Let’s go back to how you started up OzSale.
I arrived in Australia in 2006, I came over to semi-retire at the young, ripe age of 39. I got here and after about two months I realised that retirement wasn’t for me, and I got the opportunity to purchase the business that had gone into receivership. It’s a local store group in Sydney. I acquired that business through a liquidation event and I then traded that business for approximately 8-12 months. What this taught me was that the Australian market hasn’t – and doesn’t, still to this day – have a progressive bricks and mortar branded retail operator.
We clearly had rocked the boat by doing this about five years ago. Because my background was for the past 20 years based in the UK, on liquidating product, I thought, “How can I open up this market without opening up 200 stores?” It’s such a vast country, to access it through logistics, through distribution is going to be extremely hard and expensive, let’s start on the internet. So hence I started writing the software, got a team together and over about an eight-month period we created the software that to this day has driven the OzSale expansion. So that’s how we got into it.
How did your background help you in starting up?
Immensely, because we were from the branded business in Europe. We worked with a lot of key brands, and they worked with us on liquidating their excess clothing into markets that weren’t going to disturb them. So once I told them that we were going over to Australia and New Zealand, they said, “Fantastic! How many people live there?”
Everybody knows about Australia. Everybody wants to go to Australia. But people see it as a potential dumping ground for products. So there was a really good platform under a really good message to tell to the European customers, “Look, this is what we can do for you by putting your excess products into the Australian environment.”
This is how we accelerated to an early growth, because we bought a lot of the stock as we didn’t have the brands in Australia to go to. We were a new company, so it really gave us a strong foothold into the online audience very quick.