Smartbuy finds new partner in the post

Tony Gattari's e-tail operation Smartbuy has revealed that Australia Post's fulfilment service Sprintpak will form the backbone of his operation in the wake of Dataflow's demise.

Smartbuy announced yesterday that the company has signed a memorandum of understanding (MOU) with Sprintpak for it to provide outsourced tracking services, specialist packaging and goods despatch from its Villawood facility.

In addition, Smartbuy will lease space from Australia Post to warehouse products from some of the e-tailer's suppliers that lack the sophisticated e-commerce facilities needed to participate in the exercise.

Gattari told ARN the MOU is the first step to signing a commercial agreement within six weeks once pricing issues have been finalised.

The announcement comes at a time when many dot-com investors are losing faith in e-tail operations. In fact, falling investor confidence and the fallout from Smartbuy's aborted partnership with Dataflow have delayed Smartbuy's official launch, expected in the coming months.

According to Gattari, his investors -- Allco Finance Group, Brait Capital and Hambro-Grantham -- remain confident with Smartbuy because it has changed its business model.

"We actually have investors who invest in businesses for the long term," he said.

Gattari is also hoping the news will reassure his suppliers. "It's pretty important (to communicate) that we are still in existence."

Meanwhile, Smartbuy is clearly happy to have found a distribution and fulfilment partner outside the politics of IT distribution. Smartbuy considered other IT distribution partners such as Tech Pacific, Express Data, and non-IT distributors such as TNT and e-Fill.

"Australia Post are non-conflicting, they are not going to upset anybody," Gattari said. With obvious reference to the furore caused by his partnership with Dataflow, Gattari commented in a press statement: "Suppliers are sometimes uneasy about sending their product to be stored in the warehouse of a traditional distributor who may also be their direct competitor. With Sprintpak this is obviously not an issue."

One of Smartbuy's industry peers and competitors, E-Store managing director Steven Spilly, told ARN his concern centres on Smartbuy's intention to hold stock.

"As far as the fulfilment service goes I'm sure that Australia Post will have no problems. The problem lies in the fact that they are trying to be an e-tailer with a retail model.

"The perfect e-tail model is cash positive, the supplier holds the stock and sends it out on demand. If you have to pay for holding, you're sustaining massive expenditure."

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