Read about our brother site BikeExchange.com.au, the 2012 Telstra Australian Business Of The Year, as featured in Smarter Business Ideas.
Article By Stuart Ridley.
Launched in 2007, BikeExchange.com.au is now Australia’s top bicycle market, attracting a million monthly website visits.
Sam Salter and Jason Wyatt have been mates since their primary school days, fanging about on BMXes and surfing Victoria’s icy cold breaks at an early age. They remained inseparable throughout high school, playing football together and training as lifesavers at the same surf club.
But their paths veered in different directions in their early twenties: Wyatt pursued a finance career in London and raced powerboats with his corporate colleagues on the weekend; Salter followed his mother into the classifieds industry and became an A-grade road cyclist like his father, a former world cycling champion.
Both quickly rose through the ranks – Wyatt as Holden’s youngest ever financial controller, Salter as the national account manager for Just Cars – but after a day at the races during Melbourne’s Spring Racing Carnival in 2005, they decided to take a whole new gamble.
“I came home for the Spring Carnival to hang out with my mate at Oaks Day,” recalls Wyatt. “We had a really good day at the races – as most people do! – then the next day we caught up and started talking about the possibility of doing this venture together. We saw there was a real need for a single online marketplace for bikes.”
The cycling industry was growing, but the market was fragmented. There wasn’t a single strong classifieds channel to help Australian retailers and wholesalers compete with online stores based overseas. So, with an initial investment of $22,000 and 18 months’ work, BikeExchange.com.au was launched in 2007.
“As consumers are going online first, it’s important for bricks-and-mortar retailers to be active online, too,” explains Salter. “It’s troubled times out there for Australian retailers and shops need a strong voice online, which means more than just having a website – they need to build their online search rankings to attract people that want to buy.
“They still complete the sale in store, where they can concentrate on providing great service.”
While the tens of thousands of private advertisers generate plenty of traffic, the big success of the site is its comprehensive listings for close to 400 bike retailers.
Bike stores each pay $300 a month to promote their stores and individual product listings, with the option to upgrade their packages to include banner ads for special promotions.
Wyatt says the investment in designing a solid e-commerce platform for BikeExchange.com.au can easily be leveraged in other industries. In spring 2012 they launched tinitrader.com.au, a new classifieds hub for baby and kids products. They plan to launch several more sites in the next 12 months.
“We’ve focused on delivering the complete online solution for Australian retailers,” says Wyatt. “They can advertise on what we hope will be the number one sites in each vertical [segment], and run their complete e-commerce sites as well.”
The Keys to BikeExchange.com.au’s success
MARKETING: “Search engine marketing is our most effective marketing tool, driving hundreds of thousands of people to the business each month,” says Wyatt. “We employ independent consultants that provide different expertise and capabilities to build our audience.”
MANAGEMENT: “When it comes to recruitment, we’ve learnt you have to be patient and find the right person, not the first person. Every person selected contributes to the overall working culture. Providing an environment for development is also important. We hold a weekly internal training session as well as many external training opportunities throughout the year.”
MONEY: “We’ve created a recurring revenue stream based on automated credit card billing. It has allowed us to easily plan our sales forecasts and growth. We’ve only spent what the business can afford – and we’ve measured everything we’ve spent. We’ve invested in technological innovation as the bedrock of our business; including automating processes wherever possible to improve efficiency.”
Tim Reed, CEO of MYOB, a past winner and now Awards sponsor says: “BikeExchange.com.au is a terrific example of what can be achieved in business if your team has the passion, drive and leadership. Our increasingly digital economy intensifies the need to be increasingly competitive.”
Will Irving from Telstra Business says BikeExchange.com.au has a compelling business model. “Their growth in revenue, database and traffic is impressive, with profit up 900 per cent, turnover up 123 per cent and margins rising 450 per cent in the past year.”