eCommerce Report's eTailer of the week - TopBuy.com.au 
Peter Xie is the founder, owner and managing director of topbuy.com.au. He is also a highly-educated fellow. His first degree was a Bachelor of Information Technology degree at the ANU in Canberra, after which he completed an MBA at the University of Technology in Sydney.
TopBuy is his first foray into online retailing, although he has considerable prior business experience with wholesale businesses involved in distribution of electronic products.
“This was initially a spin-off business set-up to clear excess stock ” he told eCommerce Report editor, Stewart Carter.
“We were initially shipping around 10-20 parcels a day from our warehouse in Sydney”, he said. “But now we ship in excess of 400.”
Asked where the business’ competitive advantage lies, and what distinguishes TopBuy from its competitors, Xie said that there were a number of factors.
“Our business model is based on selling only reputable brands, only the top brands. Many of our competitors sell no-name brands. We don’t.”
“Our second advantage is that we have developed highly automated systems for turning around an order. We can turn around an order and ship the product very quickly. Orders that come into our system in the morning can be shipped out by the afternoon.”
“We use Australia Post for most of our deliveries and we also use Toll IPEC for bulky consignments over 25 kg that Post don’t handle.”
“We think customers like the fact that Post will leave a card if they aren’t home to take delivery and, of course, Post has service coverage all over Australia.”
Asked what other factors were significant in TopBuy’s choice of freight providers, Xie said that ‘systems compatibility’ is very important.
“Its important to find someone whose systems match yours, whose systems mesh well with yours.”
Web-site
Xie said that the TopBuy site was initially developed around a shopping cart from US developer - Cybercart.
But he said that was only a start point and today the site uses Microsofts ASP technology (Active Server Programming) for order handling and database integration.
Indeed, he said TopBuy does almost all its site development work in-house.
“We’ve got one full-time and one part-time developer on staff” he said.
“So the few thousand we spend on the cart initially is only a very small part of the overall investment we’ve made in the site.”
Asked about payments, Xie said that online payments are mostly handled and acquired through a St George bank supplied gateway.
Marketing
TopBuy is ‘multi-faceted’ in its marketing, said Xie but predominantly markets through online channels. Xie said part of the reason for that is because he doesn’t want to waste any effort either on educating people how to shop online or convincing them it is safe to shop-online with a credit-card.
As to precisely what type of online marketing, and where TopBuy spends most of its marketing dollars, Xie said he guessed 20% was on comparison shopping sites like shopping.com.
“Our products are included on a lot of comparison shopping sites, but shopping.com appears to have the highest exposure and delivers us a high click-through rate.
“But I wouldn’t necessarily say they deliver us the best bang for our buck because their fees are higher than others and some comparison shopping sites are much, more specialized in what they do.”
“We sell a lot of electronic and electrical goods and so, Shopbot, for example, which only does comparisons on that type of products is very relevant to us. So too is Staticice, which specializes in computers and IT.”
Xie estimated a further 30% of TopBuy’s marketing budget is spent on Google Adwords, and around20% is spent through affiliate marketers like ClixGalore.
Surprisingly, Xie said TopBuy uses emailcash but otherwise does very little email marketing.
“We used to do it a lot”, he said, “and tried a variety of different services. Its probably works for building new brands, but we never found it delivered us enough transactions.”
Xie said TopBuy didn’t have an Internet marketing agency or ad agency contracted to handle its marketing, and was also dubious about the pay-off from banner advertising.
However Xie said the business does advertise in magazines like PC User and NetGuide. But he conceded that it is difficult to measure the cost-effectiveness of print advertising, even when the ads include specific promotional offer codes.
Buying
Xie said that Topbuy has over 2000 products available and is going to double that number in the next month.
He said that the company sources most of its stock offshore, sand particularly via China.
“We have a lot of imported stock and have an overseas buying office in China. But we’re also actively looking locally for more local and new product suppliers. We know that local consumers are quite keen to buy Australian made or at least sourced from within Australia.”
Growth and the Future
“We’ve only 2 years young and are continually looking to improve the way we do things” said Xie.
He said that the company currently has twelve permanent staff and others on a part-time and casual basis.
“We’ve grown 200% year on year.”
For more information go to
www.topbuy.com.au
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