Ebuyer ready to do battle for online shoppers

The company, which is owned by multi-millionaire Malcolm Healey's private equity firm Vida Capital Partners, said its aggressive buying strategy combined with lower prices for its customers would lead to a 5m increase in December sales.

Managing director American Armando Sanchez said: "We usually sell 20m worth of products a month at Christmas but we expect the figure to be 25m this time because of our pricing service.

"We have some very aggressive buyers who work closely with manufacturers and distributors to make sure we buy at the best prices and pass them on to customers. We are all about giving the customer the same item they can find somewhere else for less money."

The firm sells over 19,000 products, including televisions, laptops and components. About 10 per cent of revenue comes from its exclusive range of products under the Foehn & Hirsch brand.

The company, which has a 250m turnover and operates from a 280,000 sq ft base in Howden, East Yorkshire, processes 8,000 orders a day.

It stores up to 30m worth of stock at any one time and 67 warehouse staff receive, pack and load all the orders through an electronic system.

According to Mr Sanchez, the security in the warehouse is the same as that in a Las Vegas casino with 97 cameras watching every move. "It's phenomenal," he said.

The company, which employs 260 staff in total, has spent 17m on developing the warehouse, which was built in 2006.

It continues to grow the number of registered customers. The figure currently stands at 3.2m compared to 1.2m in 2005.

Ebuyer's unique selling point is that customers can order up to 11pm at night for next day delivery and at the weekend. Orders are processed in the warehouse in only 15 minutes.

The company is the fourth largest player in the computer market in terms of the volume of products it sells. It is behind giants such as PC World, Apple and Dell but sells more units than Amazon.

Mr Sanchez said: "You used to buy a DVD player five years ago for 200 but it costs 19 today. Our products depreciate very quickly every week so it's important that we bring them in and move them on as quickly as we can.

"We've had to squeeze our margins but we've had to be very careful – not buying as much and being a bit more clever. You've always got to be looking out for your stock."

Ebuyer's website has an in-built price comparison tool to compare its prices to other retailers.

Mr Sanchez said: "Everybody has felt the recession and it's really hit us but what we're finding is customers are becoming more aggressive, wanting to find the best product at the cheapest price. It's a war out there with internet retailers. Customers want reliable companies with good service. We have to be ready to handle that."

He added: "However, even through all these times we continue to grow. The business grew by 10 per cent in 2009."

When Vida Capital Partners bought the company for 19m in 2005 the company, which was then based in Sheffield, was experiencing significant customer service problems with hundreds of complaints to Trading Standards.

Since then Mr Sanchez has been on a mission to improve the customer experience, including restoring the customer service number to the website.

"It was very challenging when we took over because Ebuyer had grown too fast in the beginning and they couldn't keep up with the amount of orders that were coming through.

"It took a lot of time to change all that and get the new systems in place but now it's something we're very proud of," he said.

From a humble garage to major headquarters

Ebuyer was founded in 2000 in Sheffield by entrepreneur Paul Cusack, who invested an initial 250,000 of his own money in development of the site and purchasing the first set of stock.

In those early days, Mr Cusack and his business partner Mike Naylor picked, packed and shipped the orders themselves, using Mr Cusack's garage at home as their 'distribution centre' before securing their first premises in Sheffield.

Private equity firm Vida Capital Partners, which is owned by kitchen magnate Malcolm Healey – one of Britain's richest men – bought Ebuyer for 19m in 2005.

Mr Healey, brother of property magnate Eddie Healey, made his fortune from building up kitchen businesses on both sides of the Atlantic, including the Hygena brand, which he sold to MFI for 200m.

Ebuyer later moved its operations to huge purpose-built headquarters in Howden, East Yorkshire.

Ebuyer US was launched in 2003 but closed in 2006.

Today, the company has a turnover of 250m and sells 19,000 different items through its website. It currently has 3.2m registered customers.