Few businesses can boast £3 million turnover, with 20% to 30% monthly growth, after just one year. Online auctioneer QXL, founded by Tim Jackson in January 1998, is an exception.
The company sources everything from computers and consumer electronics to flights and jewellery, selling them by auction from its web site (www.qxl.com).
Over a pre-set period, visitors to the site bid online for the items.
There are two main reasons why Jackson's idea is so successful. First, most people believe traditional auctions are for the super-rich and don't go to them, so the number of potential buyers is limited. Second, sellers dislike paying commission to middlemen.
Auctions lose their rarefied reputation online, and QXL is able to handle a potentially infinite number of bidders and run several auctions simultaneously, thereby keeping its overheads relatively low. 'Our strategy is to make wafer-thin profit margins,' says Jackson. 'Normally, there's a string of brokers between manufacturer and customer, each taking their little cut. Manufacturers actually make more money with us, and buyers get bargains.' The strategy seems to be working - QXL is selling 3,500 items a month.