High-street retailer Comet has improved its sales and distribution by outsourcing the web site through which it sells surplus stock.

The home elctronics chain says that using a specialist hosting supplier for the auction site has allowed it to take advantage of innovative technology, as well as providing extra functionality and flexibility to the business.

A problem with shortages of warehouse space a few years ago led Comet to 'change a traditional approach to clearance and get on board with online retailing, while still maintaining the brand', says Tony McAlpine, Comet's business development manager for direct channels.

Moving the site last year to a hosted ecommerce service from specialist Truition means that Comet now moves warehoused stock only when a web order has been finalised.

The customer's postcode is entered into a location-based distribution system that correlates stock availability with location, providing a delivery price and initiating automated dispatch processes, using a sliding scale of delivery charges, which minimises costs.

'It also allows us to sell more pristine, higher-margin product through the stores, and generate more profitable sales through them,' said McAlpine.

'And the direct sales model on the site eliminates resellers, which means we get improved cash flow from fast stock turnover.'

Comet's clearance site generated £3.2m in direct sales last year, which McAlpine says represents 53 per cent of the retailer's traditional store clearance sales, or two-thirds of the stock that would normally have to be cleared through stores.

'The service now has very low-cost acquisition costs with very high repeat visit rates,' said McAlpine.

The hosted technology model also allows the retailer to maintain the site's front end in-house, and to advertise its inventory on other ecommerce sites such as eBay and Amazon.

'Truition offers us a very quick route to a massive number of online shoppers,' he said.

The ecommerce software manages where Comet's inventory should be advertised, and normalises pricing structures to put the best-value products through the most profitable channel.

'Working with other auction providers means it's really positioned to continually drive customers not only to the auction site, but to the main Comet site too,' said McAlpine.