Discounter has big plans

STACY SQUIRES/The Press

SUCCESS FORMULA: Robert Coleman, left, and David Jones, of Off the Back, a website that sells one product a day at a discount, have studied what leads to success.

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More than half of New Zealand small businesses fail in the first five years, but a group of three young Christchurch friends are determined their company will not be one of them.

The figures are worse for information technology (IT) companies, says director David Jones, 22, but he and fellow directors Robert Coleman, 22, and James Hanafin, 24, are not daunted by that.

They launched the Off the Back website on December 10, selling one product a day at a reduced price. People have 24 hours to buy the product and a clock counts down telling the buyer how much time they have left to secure their bargain.

So far they have sold gliders, digital cameras, speakers, headphones and are about to sell a baking soda-powered rocket which can rise 91m.

They buy their products direct from importers, but once site visitor numbers improve they intend to target companies that want to test a product on the market or who might have a limited number of end-of-line products they want sold quickly.

Off the Back has made more than 100 sales so far, which has exceeded expectations. The number of people visiting the site is increasing every day.

Jones said it was well documented that a lot of IT businesses fail when they go mainstream, and run out of money, but Off the Back has strategies in place to get it through that point.

Coleman said one thing the company had in its favour was that it was not focused on making "squillions" of dollars. It was measuring success on the number of people visiting the site.

"We may be making next to nothing on some products, but if they come back tomorrow then we are happy and if they come back in two weeks we're even happier."

Coleman said the common theme with internet companies was that if you get the users then the money will follow.

"Google never set out to make money," Jones said.

He came up with the idea after researching what makes websites successful. Coleman and Hanafin had also been thinking about a similar venture so they decided to join forces.

- © Fairfax NZ News