SupplyZone shuts up shop

By RICHARD WOOD

Online computer and office products retailer SupplyZone has stopped trading and is hunting for more capital or a partner so that it can continue operating.

Managing director Neil Taylor said the e-tailer, which grew out of home-based computer reseller NetworksDirect, ran into cashflow difficulties when its bank, which did not have a debenture over SupplyZone, cut off its overdraft without warning. The company had five staff and Taylor said no permanent staff had been laid off.

Supplyzone was set up in October 2000 and was aiming for around $4 million in sales in its first year.

Last year, the company was in expansion mode with the launch of its Hewlett Packard Shop and its Services Shop.

Taylor said there were several profitable months, with September and November the highlights.

But the business did not go as well during December and January.

SupplyZone had taken the same web-based strategy as its predecessor NetworksDirect, but had added mobile phones, telephony, services, alcohol, stationery and office supplies to its list of products.

Taylor said the company had problems with suppliers in the telephone and alcohol markets and had had to give up selling alcohol.

Another problem was the lack of alternative suppliers to distributor Tech Pacific for computer products. Last year, distributor Renaissance stopped representing Toshiba, Microsoft, Hewlett Packard and Compaq.

"Because Tech Pacific insures its debtors and it is the only source, it put us in a difficult situation to negotiate," said Taylor.

Tech Pacific managing director Tony Butler could not be reached for comment.

Last year, SupplyZone attempted to launch a business initiative based around internet product content for manufacturers, resellers, and distributors.

This was pitched at Tech Pacific and Hewlett Packard without success.

The company's other initiatives included the development of further vendor shop within shops such as its Hewlett Packard shop, but these did not come to fruition.

Taylor said that in his search for capital or a partner he had uncovered interest from two computer resellers and a customer.