ICollector to introduce fee to subscribers

The plan was announced by Ron Miller, Chief Financial Officer of Ableauctions, who announced last week that they were acquiring the online live auctions site in a share swap deal.

He hopes to convert at least half of the site’s 40,000 users – who currently enjoy the service free of charge – to the subscription scheme, saying that the five per cent commission ICollector earn on live online auctions through their deal with eBay Premier is not enough, by itself, for the company to prosper on.

Mr Miller, who has been working on the deal for six months, and described ICollector as “a company in a lot of trouble” but one with “a business model moving in the right direction”, explained that a major attraction for Ableauctions in cementing the deal was the prospects for accelerating the growth of market share.

He said it would have taken Ableauctions two to three years to meet their market share target without ICollector, but with the company, he now believes they could achieve it in six months. However, the terms of the deal underline the hard tasks that are ahead. Ableauctions agreed to buy ICollector on the condition that the London-based firm’s major shareholder put up a year’s operating cost estimated at $4.25m. Then there are tough performance targets to be met next summer.

Icollector now has a new CEO. Robert Craig, former owner of Vancouver dotcom company Stratford Technology, has been appointed to the job and will be based in the UK.
Meanwhile, Mr Miller, who said they were looking at a deal with Federal Express that could help with shipping, gave his views on what he saw as the strengths and weaknesses of ICollector.

“ICollector was run like a typical dotcom company. They raised a lot of money and they spent a lot of money. It cost them $30m to create this business model – most of which went down the toilet – but they brought some good things to the table,” he said.

Particularly attractive were the contacts that ICollector has with 300 auction houses (over 50 auctioneers in the US use the service) and the live auction‚ bidding contract they signed with eBay Premier earlier this year.

“There are two aspects to our business. There are the seven bricks-and-mortar auction houses we have across the North-West and there is the software we produce for both live auction online bidding and back-end programmes to aid in the transfer of auction lots from the catalogue to the Internet,” said Mr Miller. “We want that software to be used by as many auction houses as possible.”