Computer hardware resellers are finding good bargains in online auction sites, particularly in the second-hand market.
In June, PC clearing house Computer Source sold nearly $40,000 worth of computers through Fairfax's sold.com.au auction site and managing director Bill Benson is confident the company will soon reach sales of $200,000 a month from selling second-hand equipment over the Internet.
The success of the venture has surprised everyone. "I admit I was a bit of a sceptic at first, and now I am dumbfounded by the success of the venture," Benson said. "Our sales in the computer area are up 500 per cent."
Customers can bid for computers for as little as $300 and each computer comes with warranty and support services. The company now sells old machines to Southeast Asia and Russia.
"We built the [computer] business up from nothing," said Benson, who started Computer Source as an adjunct to auction company Dean's Auction Services, to compete in the marketplace. "We are now the largest independent reseller of second-hand computers in Australia."
The computers are mostly sourced from government departments and financial institutions. Computer Source currently has more than $1.5 million worth of stock listed on the sold.com.au site and buyers can bid for five, 10 or up to 50 computers at a time.
"The computers are all branded products. It wouldn't work with clones because customers recognise the brand names and we don't get as many problems as with unmarked machines."
Benson said the idea of lightning fast turnaround times on computer equipment is "a bit of a furphy".
"There is always room for old IT equipment - even for machines that are 20 years old," he said. "For example, we are sourcing low-end Pentium 120 machines and we are finding these to be a very good stepping stone for someone who hasn't used a PC to start from."
The site at sold.com.au/computersource.asp, gets around 300 visitors each month and has more than 130,000 registered members, driven by banner advertising from the sold.com.au portal.
Computer Source also takes many orders from regional Australia and is intending to have Australia's first "interactive auction" whereby buyers can bid via the Internet 24 hours prior to traditional auction and use those bids in sale.
Listings on the site vary from month to month. August has seen many laptop computers in the Computer Source catalogue.
"We have been fortunate with banner advertising and customers can buy one or 50 computers at a time. No one else is selling at volume," Benson said. "If a company wants to expand, we can go in and talk to the person to give advice and steer them towards the right computers."