November 02, 2015

New Egg Hatching To Expand Into Australia - Chat With James Merk

New Egg are one of the largest websites in the world for technology and they were at PAX Australia to announce some big news. I had the chance to chat with James Merk from New Egg about this news and what is even cooler is they are launching a sale to celebrate the announcement.

Maxi-Geek: So who are New Egg?

James Merk: So New Egg started as ABS and that was kind of built to order computers and then we realized it would be a lot easier just to sell drives and motherboards, things like that and so that is when we go really big. Then when we started to get really big, we were kinda famous for four main points, that we were really keying on, Great Prices, honest reviews, we verify every review before its published, to make sure it’s not a manufacture writing it, we don’t syndicate our reviews and we only get them from our community. The third thing is really fast shipping, we are really keen on that and the forth one is fantastic customer service, so over the years our community has really be built up and is really good, you can even ask a question and have another member of the community answer, like if they bought the product before.

So over the years we have grown into the second largest online retailer in North America, so there is Amazon up there and we are down here, but we are still doing $2.6 Billion a year, which is not too bad. Then about two years ago, we started looking at where the traffic was coming from and we realized about 10% was coming from overseas, most English speaking countries, UK, India, Australia and New Zealand, so we thought we would open up and let people shop in their currency for products that would work. Memory is memory no matter where you go, things like power supplies are trickier, you have to get the right cords to go in and things like that, so we didn’t have those up there. After about a year, we realized Australia was spending twice as much money as the number 2 country in the new markets, so we were like ok, I bet it would be better if we didn’t have to ship from America, so that is our announcement at PAX Australia, we are now shipping from local distributors. Now it is not everything we sell, in North America we sell around 20 million products, but here we will have around 50,000 products locally shipping and we will try to double that as quickly as we can.

The kinds of things people are buying from us right now are video cards, all the new games followed by SSD, then memory and motherboards. We are pretty excited and the reason we are here at PAX, next year is going to be a big focus on gaming from New Egg, with a hashtag #likeagamer, you know for the person who wants to get into ESL, or have the right equipment to feel like they are a part of ESL. So mostly PC stuff and we are going to be doing a lot of stuff to help out PC gamers, to ensure they get the right stuff. And to celebrate the news, we are having a big promotion on our site just for Australian shoppers, so if you want to get some new gear now is the time.

MG: So with the local shipping, is that you guys sending product here from the USA or ordering it from local distributors here?

James: It’s kind of, well we are working with local distributors and manufacturers, I don’t know them all it’s a big list, but who can move it out on our behalf. So that is the goal initially, but next year the goal is to have our own warehouse and we will have a localized website to go with it. So it’s not dipping our toe anymore its submerging the entire foot and we will dive in more next year. The other thing is we are very responsive to customers so if we see demand in some category we will work to ensure that gets filled. Again we are kind of methodical, so we will try and see what happens, so we are shipping locally which will give us a better sense of what people really like and once we come here in full next year, we make sure to appropriately get the inventory together.

MG: So obviously the people go to New Egg’s site, will it redirect to a local site now?

James: Yeah, it will redirect you and have the Australian flag up the top.

MG: So if you are purchasing something and you can’t find it on the Australian site, will it show as not available to you?

James: if you are looking for something and it’s not there, you can make it show, just by swapping to the American flag. It is not the best experience as it will allow you to place it into your shopping kart, but won’t tell you that you can’t have it shipped to you until you go to check out. I wish we could do it better, but we try to get you into the Australian site, which everything in the Australian site is fine.

MG: So if you go to the American site, there will be some products that can be shipped here and others that can’t

James: I would imagine, there are somethings that you don’t want again like the power supply.

MG: So the start will be around 50,000 with the goal to grow as fast as you can, is there a plan in place for if things don’t go the way you would like, will you just leave things as they are or would you pull up and leave?

James: That is an interesting question, I have not had that one yet, I can tell you in our strategy sessions, we have never talked about a pull out plan. It is, if we go in to anything we do, we know if might not be massively profitable, we know with our planning that we know what we need to do. I can say that things look good so far, you know, we were not expecting Australia to be the number 1 country and when we got here, we got the feeling that there was space for us to be here as well, it feels like you guys are really hungry for technology. I can tell you it is my first time in Australia and seeing what is going with PAX here, it is really encouraging.

MG: That is really good to hear, so that is all I have, so thank you for taking the time to chat with me.

James: You’re very welcome, I hope that Australian consumers can find what they need and they can always contact us to let us know if there is something they want that we don’t yet sell.

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