As one of the biggest marketplace sellers in Australia, online tech retailer Harris Technology (ASX: HT8) has suitors knocking on their door keen to leverage their eCommerce infrastructure which contributed to a 40% increase in sales.
Reporting $13.4 million in revenue for the December quarter, a 40% increase on the previous corresponding period, sales were boosted by a trial of Household and Christmas products as an extension of the retailer’s flagship technology products.
The trial was made possible following Harris Technology’s warehouse upgrade in November 2021 which consolidated three smaller warehouses into one large complex, bringing with it a 50% increase in storage capacity. Already with their holiday season inventory on hand, the Company undertook the Household Products trial having identified its higher margins which could be quickly turned over in the lead up to Christmas.
These have included tools, toys, cleaning, gardening, pet and Christmas products which Harris Technology quickly listed across its marketplace channels including Amazon and eBay. Already the Number 1 ranked seller on Amazon Australia, the additional listings of household products could be easily bundled with their tech products where customers could minimise postage costs while ensuring delivery before Christmas.
“We have delivered $28.5 million in sales for the first half year compared to the same time last year of $19.4 million. The consolidation of three smaller warehouses into one large complex has positioned Harris Technology to build on the momentum built since pivoting to a pure-play online retailer,” said Harris Technology CEO, Garrison Huang.
“While the holiday season delivered strong sales from our flagship technology and consumer electronics categories, we have also witnessed encouraging results from our Household Products trial. This is a product category that Harris Technology is able to utilise its eCommerce expertise, adding to its offering and enhancing its margin mix.”
The margin mix referenced by Huang has been part of a concerted effort by Harris Technology to improve its margins amid a squeeze in the eCommerce industry where competition has risen as brick-and-mortar retailers have improved their online stores.
Rather than incurring their own advertising expenditure, Harris Technology has more than 10,000 products listed across online marketplaces including Amazon, eBay, Catch, Kogan and more. Through this eCommerce model, the online retailer is able to list hundreds of new products a day which can then quickly be dispatched from their upgraded warehouse.
Following on from the impressive results delivered from the Household Products trial, Harris Technology will explore the product category further. This will include discussions with other Australian-based importers with a strong focus on high-margin products as the Company seeks to build on the $1.75 million net profit after tax delivered in FY21.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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