NZ wholesalers shun start-up online firm

A fledgling Christchurch-based online company is being forced to look overseas for products following resistance from New Zealand wholesalers to sell them goods.

Off the Back, which launched in December and sells one product a day at a reduced price, had planned to source products locally and to be a clearing house for retailers and suppliers.

However, director James Hanafin said there was high resistance to online retail companies in New Zealand with many wholesalers keen to protect their retailers.

"Despite offering to pay cash for hundreds of products at a time, many suppliers are not interested."

Hanafin, 25, and fellow directors David Jones, 22, Robert Coleman, 22, were importing about half their products directly from overseas, which also enabled them to cut out the middle men and offer a better price to their customers.

Only 1 or 2 per cent of retail sales in New Zealand were conducted online, much smaller than Britain's 15%. However, Hanafin expected it to increase in New Zealand in time.

Off the Back has grown from registering 100 sales in its first three weeks of operation to averaging 50 sales a day.

It registers thousands of hits most days and in February was named the fourth fastest-growing site in New Zealand by internet monitoring company Hitwise.

The company was making a profit but its three directors who all worked part-time on the website were not taking a salary, preferring to put the money back into the business.

Hanafin said the company had been set up with almost no capital and profits were used to buy more products.

The trio was planning a buying trip in October and would need additional investment, which would either come from existing shareholders or they could look for more outside investment, Hanafin said.

- © Fairfax NZ News