Purchase Power steps through the Gateway

Hot on the heels of the announcement that Gateway will now appear on store shelves across the David Jones retail chain comes the revelation that the formerly direct-only hardware vendor has signed a second distribution deal with Purchase Power.

Under the terms of the agreement, Gateway will become the exclusive hardware supplier for Purchase Power, a group buying Web site launched earlier this year and currently looking for reseller partnerships.

Gateway managing director Paul Heath told ARN that Gateway is considering selling through a variety of channels.

"We have a philosophy that we sell products the way people want to buy them," Heath explained. "It's not our strategy to populate Australia with Gateway owned and operated stores. We do want a strong retail presence and we're well on the way to that, but we will also consider other options like David Jones and Purchase Power."

He said Gateway is a strong believer in e-commerce and the company is currently considering deals with other Web sites.

"International Data Corp recently predicted that by 2004 up to 40 per cent of PC sales [in the US] will be over the Web," Heath said. "We are already experiencing huge growth and sales over our Web site, but we are looking at opportunities to sell over other Web sites as well. We realise that not all potential customers are going to access our site. There will be other announcements about deals with other Web sites in the future - Purchase Power is just the first."

Purchase Power will sell the entire Gateway range of products, create special package deals of Gateway products and link the Purchase Power and Gateway Web sites.

Meanwhile, Steve Baghdadi, Purchase Power's executive director, said the company was negotiating with a range of other suppliers to provide office supplies and business services, recently signing deals with phone supplier Primus Telecommunications and airline and hotel booking system Amadeus.

But Baghdadi harbours no delusions about the company's place in the world. "We are just another outlet to take products to market. We are not going to revolutionise the world."

Purchase Power is currently looking for partners to supply software and peripherals, but it is also looking to match the high quality and national presence of its current suppliers.

"We intend to sell software from a range of companies so maybe a software reseller could help us there," Baghdadi said. "We are having a debate within Purchase Power whether to concentrate on the top half dozen software programs, in which case we could administer it, or whether we will sell the whole range, in which case we need a partner. It depends on the quality of the supplier."

Working on the concept of power in numbers, Purchase Power aggregates the purchases and increases the buying clout of SMEs, also rewarding member loyalty with bonus points to be redeemed for company equity.

The site has been live since May 11, but Baghdadi said the company will not actively pursue business until after the GST. The company hopes to be profitable in six to nine months time.

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