By John Willman,
Business Editor
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While consumers are becoming increasingly confident
about going online to buy mass-produced products such as books
and DVDs, buying designer furniture over the internet may
require a certain leap of faith. The product is far from standardised
- there is usually a variety of finishes and fabrics, and
shoppers will want to see samples. Meanwhile, it costs much
more to deliver bulky and fragile furniture than smaller items.
Yet Julie Edwards, a former investment banker, has created
a thriving internet business selling upmarket Italian furniture.
The reason, she says, is that "rip-off Britain"
allows her Europe by Net business to sell expensive designer
products online at prices consumers cannot resist. Some of
the furniture is new to the UK, but the most eye-catching
offers relate to those already on sale in conventional retailers.
The cheapest version of
the company's best selling sofa, which is
available in a
variety of |
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sizes
and coverings, is £4,407 - compared with £6,099
on the high street.
A mirror designed by Philippe Starck is priced at £1,051
- just over half the UK retail price of £1,999. "The
mark-up in the UK is so high that we can pay for the transport
costs and make a profit while undercutting shop prices by
up to 40 per cent," Ms Edwards says.
The concept struck Ms Edwards - who is married to an Italian
- when she had her first child. She flew to Milan, bought
the pram she wanted and saved more than the cost of the air
fare. With the birth of a second child, she repeated the exercise
to furnish a new home and saved thousands of pounds. "That
was the time when the dotcom boom was at its peak and it didn't
take much thought |
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to see it as an online business. "We started the website
and had to convince people it was a good way to buy large
and expensive items of furniture.
"We were one of the last online companies to start up
a website before the dotcom crash, so it was hard at first
to get going. But the savings were so enormous that people
were prepared to try it. One big-ticket item, after all, could
save a month's salary, and that made it worth taking the plunge."
Her strategy was to build a large range of furniture quickly,
making it harder for competitors to get off the ground. Europe
by Net became profitable within four years and now turns over
about £5m a year with 25 staff. It has also expanded
internationally, with half its sales in the US and catalogues
in several other European countries, Japan and Dubai. So how
has Ms Edwards managed to persuade consumers to buy online?
A |
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combination of unbeatable prices and very high-quality products,
she says. "We get very few returns. Some customers have
done all the research - they know the model numbers, the fabric
codes and just want the best price. Others value the convenience
of it all - one guy ordered the sofa he needed for his home
at 2am on new year's eve."But if customers are happy,
competitors are not. Europe by Net has come under attack from
manufacturers and conventional retailers concerned that internet
sales are undercutting their businesses.
The European Commission is investigating a complaint by the
company about four manufacturers it claims have tried to stop
suppliers selling their products to Europe by Net. Pressure
is also alleged to have been put on glossy magazines not to
accept its advertisements, with the threat of losing other
lucrative advertising. |
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