Network: `No area is out of reach'

If someone had told John Palmer three years ago that by the turn of the millennium, he would be one of the largest suppliers of Christmas trees in Europe, he might have chuckled and dismissed the thought.

It wasn't his biggest goal, or even a small one: he had his hands full as chief executive of Bates Malaysia, the largest communications group in that country. Hailing from Melbourne, he had first worked to become marketing manager of Mattel Toys in Australia; then he left for the Middle East, and stayed in Asia for nine years. Palmer, now 39, came from a family that ran its own manufacturing business, and had long wanted a firm of his own. But the lure of corporate life was strong: "There's always that extra rung to climb," he recalls.

Palmer claims that he recognised the Internet's potential some years ago, but that it didn't click with his own dissatisfaction until he met Johan Stael von Holstein, of the Icon Media Lab, in 1997. Stael von Holstein had a very simple idea. It was based on the old co-operative society model: that if enough people with a common goal got together over the Internet, they could leverage a greater amount of bargaining power upon manufacturers and cut out the middlemen. Palmer saw that he was the perfect partner, eager to plough his own marketing and advertising expertise into a quickly developing field.

LetsBuyIt.com, formed last November, was the result of their conversations. It's a company that sends out teams find the best deals in everything from perfume to holidays, then aims to aggregate consumers and drive down prices. Information is posted on the website, consumers file their intentions, and the negotiation begins.

Home and garden products have proved popular "co-buys"; 2,500 people, says Palmer, have ordered Christmas tree via the site. A pair of Salomon skis might set you back pounds 370 in the shops, but members of LetsBuyIt.com can save pounds 81 with a "best price" - the lowest possible, if enough sign up - of pounds 289. Palmer plans to have 14 country-specific sites by the end of next year. It launched its first in Sweden in April, and went live in the UK at the beginning of October.

Palmer plays the action man to Stael von Holstein's visionary. "There's this story about Johan making a presentation to a group of Volvo executives, saying, imagine this guy Bob, in America. He goes down to the dealer and says `What's my discount?' There's none, so he goes home, goes to his computer, and types in `Who else out there wants to buy a Volvo?' This story has gone down in urban myth, and even Nicholas Negroponte has used it. It didn't actually happen, but the penny dropped," says Palmer.

"To be able to do what we're doing well takes a lot of money. It's not cheap - in the first year, we will have spent $55m to do this properly. In me, Johan saw someone who had built brands and made things happen. The reach of the Internet is incredible. There are no demographic or geographic areas you can't get to. For me, the Internet is not about technology, it's about adding value to make people's lives better. I'm definitely not a tech-head - I'm a people person. Although I use the Internet a lot, I use it for booking tickets, not talking in chat rooms."

His company now employs more than 100 workers across nine countries; through the venture, Palmer claims, he has learnt more about people management than about technology. "It's all about finding the right people to execute the plan. I've worked with some maniacal people, and that has taught me not to be too emotional about the way you do business. You have to build a team spirit. I've seen good people destroyed by destructive personalities, and I don't want that to happen."

LetsBuyIt.com is already well-established in Scandinavia, where Internet penetration is high, and there are plans to launch in the US next year. Palmer feels confident that British users will embrace the idea with the same enthusiasm. "The concept is easy to understand: the Internet connects the chain by bringing together people that shop. The more that shop, the more the prices drop. I don't think that Britons are more cautious than the rest of the world; in fact, distribution here is far more inefficient than elsewhere, and Brits have been far more ripped off," he says. "I think they have had enough, and will see that this is very timely."

Interview by

Rachelle Thackray