Having invested £1 million on its website infrastructure, UK tech etail giant Ebuyer.com broke sales records on Black Friday with one order made every second. To find out the secrets to its success, Dominic Sacco gets a tour of the warehouse from MD Stuart Carlisle…
From the moment I meet Stuart I know he’s not going to be your typical managing director.
With a broad smile, firm handshake and sprightly demeanour, he doesn’t give me the standard 30 minutes of his time for an interview – instead he frees up almost the entire day to show me around. And he’s clearly eager to run through the tricks and tools of the business. Before I know it, we’ve donned some high-vis jackets and have stepped foot into the third floor of Ebuyer.com’s 280,000sq ft warehouse.
First I’m shown where the orders are processed. As soon as a customer pays for their items online, between five and 15 minutes later their order is assigned to an individual box, which makes its way around the warehouse to the correct product areas automatically via a conveyor belt. Stock is also replenished this way – a huge robotic machine picks up products from 4,000 shelves three floors down, then places them in a tote which is moved to the correct product area.
It means that staff only need to place nearby items into the incoming boxes, before each box moves to the next area. Once all the correct items are added, it’s off to be automatically weighed, hand- packed and shipped using Dx, Royal Mail or others.
“It’s easier on the staff and easier to get the stock,” Stuart explains. “We don’t need to have someone going upstairs or downstairs with boxes. Our staff are only walking short distances to pick and pack – it’s more efficient.”
As Stuart explains how things work, it’s clear he cares a great deal about the business, its 262 staff (of which 28 work in the warehouse across three floors and three shifts) and is proud of their achievements.
The warehouse gets through 600 orders per hour on average, but it can handle up to 1,200 per hour, and in the run up to Christmas it processes a minimum of 11,000 orders per day, while Stuart assures me the Ebuyer.com website can take ‘unlimited amounts’ of orders, with 1.8 million people reading its emails every week.
NEW ERA FOR EBUYER
Following a controversial £1 sale in 2011, which Stuart admits “was probably not the right thing to do”, as it saw the website crash leading to customer complaints, he has made a number of changes. Since joining the business in August 2013, Stuart has tweaked the pricing strategy, upped its marketing activity (it has just struck a year-long deal with TV channel Dave) and invested more than £1 million on the website’s infrastructure to cope with higher customer demand. And it’s paying off.
Black Friday (November 28th) 2014 was the biggest sales day for Ebuyer.com in its 15-year history, taking almost one order every second. “I’ve never seen anything like it,” Stuart beams. “It was chaos in a nice way. What was more exciting is it wasn’t high demand for just one item, like it is for our deal of the day, but it was across the board – our customers were buying lots of everything.
“I get up at 5 o’clock in the morning, and on Black Friday there were 1,200 people on the website then. By the time I got into work at 7am, this had risen to 2,800. It was absolutely crazy. We took on another 3,000 orders and had to do them on Sunday alone – I’m really proud of the guys.”
Stuart assures me he worked in the warehouse himself on the Sunday to help out his staff, managing to pick 1,000 orders by himself. The journalist in me makes me automatically dubious of any MD that would do such a thing, but I can’t help but believe this cheery chap; his enthusiasm is infectious. I ask Stuart if he got paid overtime. “I didn’t – I’m cheap labour,” he laughs.
Suddenly his mobile phone rings – Exertis’ retail director Mike Buley’s name flashes up. He takes the call as we proceed to a high walkway that overlooks a central conveyor belt below, (which even has its own mini traffic lights that signal if there’s a fault). Looking down, I notice hundreds of boxes making their way across the warehouse. One has an Nvidia Shield Controller in it, another has four copies of Panda Security, while the one behind it is packed full of USB drives – probably for a school or small business.
“In the past our customers were purely consumers, but as the business market becomes more mature and internet savvy, they’ve realised companies like Ebuyer are well suited for their needs,” comments Stuart.
Around 40 per cent of Ebuyer’s customers are consumers, 40 per cent are B2B, and 20 per cent are ‘prosumers’, for example a school headmaster or a musician that needs tech for their recording studio.
While there are a wide variety of items being passed around the warehouse, a large number of boxes are full of PC gaming gear, from keyboards and graphics cards to fans.
“What has probably played into the PC market more than anything is the slow launch of the PS4 and Xbox One – it’s moved a lot of kids (and big kids) back to computers,” explains Stuart. “We’re really looking forward to the Steam Machines coming out in 2015, they will take the market by storm and hopefully cause a bit of a resurgence in the components industry. We’re looking at offering our own system building offering too.
“Also, laptops have gone crazy and there’s been a resurgence in tablet sales too. We’re selling normal Microsoft laptops for £169 – I can’t remember any time in history when they were ever that low, and it’s come mainly from the guys at Microsoft funding it, because they want to take some of that marketshare back from Apple.”
"I’d love us to be the biggest online tech company in the UK, and that’s where we want to take it not just over the course of the next year, but over the next three to five years as well.”
Stuart’s phone goes off again – this time it’s a call from a vendor. I ask him how challenging it is keeping them happy while also getting the best price for his customers.
“I tell them how good or bad they are! And we have an open and honest dialogue. We measure them all with a balanced scorecard,” he says.
“A lot of vendors have a one-to-one relationship with us and give us [good] prices. We price according to deals we get, and offer some great deals of the day, but at the same time we don’t want to destroy the marketplace.
“Sometimes amusing things happen with our competitors – they have been known to undercut us on price without actually having the item in stock, for example. Saying that, etail is becoming a bit more sensible in how it prices products overall.”
We head over to the area where staff manually pack each order. In a matter of seconds the lady working here has boxed up several products, placed them in bubble wrap and used a hot glue system to seal the packaging. The finished box then spirals its way down a helter-skelter-style track to the ‘goods out’ area, to be stored in a lorry and delivered to another depot before reaching the customer.
It’s all incredibly efficient – but the company doesn’t want to rest on its laurels. It’s planning to expand further with more hires, offices and potentially retail stores.
“We’re in growth mode,” Stuart says. “When I joined in August 2013, we had two people in marketing. Now it’s 20. We’d love to take on more people in marketing, buying, sales and warehousing.
“26 per cent of our business is done within the M25, so it makes sense to have a sales office in central London, which is on the cards.
“At some stage we’ll look to open up a retail store. We’re readying ourselves for that eventually. It’s about finding the right format – if we do it we’d like to do it on a smaller scale and see if it works.”
In terms of what the future holds, Stuart believes wearable tech will take off in 2015, and is excited by the Microsoft Band device which Ebuyer.com will be stocking, but admits he’s not sure how well virtual reality devices like the Oculus Rift will fare. I ask him if he’ll be stocking the upcoming Apple Watch.
“No – the guys at Apple don’t feel as though we suit their current strategy, which is a shame,” he replies. Well, if you can’t join them, why not beat them? “I’d love to be above the Apple Store and PC World,” Stuart adds.
“Over the course of the year we’ve improved our online presence and marketshare, so we’ve gone from having a 6.4 per cent share of the UK online computing market to 8.6 per cent. I’d love us to be the biggest online tech company in the UK, and that’s where we want to take it not just over the course of the next year, but over the next three to five years as well.”