Dell to launch auction site
Published: 19 Jul 1999 15:30 BST
The new auction business continues the Round Rock, Texas, company's broad push into Web retailing, begun three years ago with its own Internet site and continuing this year with the launch of its Gigabuys online site for computer and electronics gear. Analysts said it puts Dell with $18bn (£11bn) in annual revenue, squarely into one of the fastest-growing segments of online retailing.
Online auctions are expected to account for sales of $8.1bn by 2001, up from $525 million last year, says Sue Rothberg, a senior analyst at market researcher Gomez Advisors Inc., in the US.
Dell's entry comes as Web and store-based retailers are rapidly moving into the online-auction market. Amazon.com Inc. and CompUSA Inc. have launched online auctions. Last week, two of the biggest names in the business, Onsale Inc. and Egghead.com Inc. agreed to a $375 million merger.
For Dell, the decision to couple sales of outlet-store goods with customers' used equipment is "just one more way Dell is becoming a single-stop source for computer buyers," said Richard Owen, vice president of Dell Online. Customers can list any brand of computer on the site. "It's part of building a lifelong relationship with the customer," Mr. Owen said. Gomez Advisors' Ms. Rothberg said the blurring of consumer and business items "is great for building traffic to the site. I think Dell will do very well," she said.
A Dell spokesman said the firm will charge consumers $2 an item for each listing after an initial 60-day free period. The site also will sell refurbished Dell computers and used products made by other companies, such as printers, that previously were leased to customers.
Separately, the company reiterated it expects to begin offering Internet access service to its U.S. PC customers in the near future. In response to rumours the company may acquire an Internet-service company to provide the service, Chief Executive Michael S. Dell said entering the business "does not necessarily mean we'll acquire a company to do it. It's not needed to enter that market."
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