Low-cost start-up, strong revenues, and fast growth are some reasons that DirectWireless.com and Affordable Supplements landed second and third place, respectively, in the ROI category of the 2000 Inc. Web Awards.
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Web address: www.directwireless.com
Why it won: This unadorned site generates at least 10 times in annual revenues what it cost to build.
Company revenues: $2.4 million
Site-launch cost: $25,000
Judge's view: "While this is not the most elegantly designed site ... it puts forward a no-frills, get-down-to-business attitude that should appeal to active, self-directed shoppers." --Mark Leiter
In 1997, Rob Marler, who was selling Nextel cell phones in central Florida, was living the sales rep's nightmare: his customers wanted to buy things he couldn't provide. They were asking for accessories like batteries, chargers, and cases, "and there weren't any," he recalls. Those items were always out of stock.
"It seemed like a forgotten sales opportunity," Marler says. He and a Nextel colleague, Brian Bangle, quit their jobs to start a wholesale business selling accessories to Nextel dealers. Next, they opened their Direct Wireless retail store near Orlando, adding products for Motorola, Nokia, and other brand-name phones. In 1998 they launched a Web site. A year later they renamed the whole company DirectWireless.com, acknowledging some of their repeat customers' growing preference for ordering goods online. Currently, only about 10% of their customers make their subsequent purchases online, a percentage Marler hopes to increase in coming years.
Today the 10-employee company offers 750 products, including hard-to-find accessories for older-model phones and for the latest models of pagers and handheld computers. The Web accounts for about 10% of the company's revenues, but Marler expects that figure to grow with the market. (He estimates that there are 100 million cell-phone users in the United States this year, up from 79 million last year.)
Initially, DirectWireless.com outsourced all its Web work, but "it cost $150 an hour and took a couple of weeks to get a new graphic or text on the site," Marler recalls. Now a full-time Web staffer does the same work in minutes.
Not that DirectWireless.com focuses on design. Judges unanimously mentioned the site's stripped-down look. "Designed to win sales, not art awards," noted judge Mark C. Thompson, but he added that he found accessories for his own phone faster on DirectWireless.com than he did on the "much prettier Motorola site."
Marler, who owns but rarely uses a cell phone, now wants to attract a new generation of customers: teenagers. "If we acquire them as customers today and keep them until they're 80, we'll be servicing every phone they ever use in their lifetimes," he says. --Anne Stuart
Company: Affordable Supplements Inc.
Web address: www.affordablesupplements.com
Why it won: The site helped to grow the company's business in nutritional supplements so quickly that they now represent 95% of sales.
Company revenues: $250,000
Site-launch cost: Less than $500
Judge's view: "The site loads quickly and lists products immediately; it has a clear search capability, clear information on products, and an easy purchasing method. The ROI is huge since they designed the site themselves." --Mark C. Thompson
Dave Gray of Colby, Kans., thought he could muscle more money from the bodybuilding supplements he and his wife, Kristi, sell at their gym, the Fitness Club. At the time, sweaty athletes fresh from their workouts were buying about $2,000 worth of the supplements each month. Gray figured he'd be doing well if he made one sale a day online.
So with no experience, Gray cobbled together and launched an E-commerce site in March 1999. He saw results within days, making his first sale to a weightlifter in England. Within six weeks, Web sales matched over-the-counter sales. As their fall season began, the Grays were doing 95% of their supplements sales over the Web, averaging more than 32 orders a day for projected sales of $750,000 this year. They still run their health club, but online sales account for 80% of their revenues, which reached $250,000 last year.
Gray developed the business by focusing on a specialty audience: serious athletes, primarily body-builders, weightlifters, and football players. "MotherNature.com sells vitamins and herbs. We've stayed totally away from that," he says. "If we do sell a vitamin, it's because it's targeted specifically to an athlete." He buys in volume so he can deeply discount products like mineral supplements, muscle-building hormones, and powdered meal replacements.
And Gray, who is an experienced weightlifter, knows whereof he sells. The Grays and two full-time employees answer hundreds of E-mail questions on everything from effective exercises to the pros and cons of protein supplements. While he can't yet cite figures, Gray believes those personal responses convert to sales often enough to justify the effort.
Gray, who calls himself "really cautious, the do-it-yourself kind," chuckles when he hears about E-commerce start-ups that have spent six figures launching their Web sites. "I didn't even buy Microsoft Front Page," he says. Instead, he built the site himself with shareware he found online, mostly at CNET Download.com. He spent about $300 for software that handles credit-card processing and $50 on a scanner. Gray maintains the site; two employees handle order fulfillment, and a third does the product photography.
Judges felt the site's look and feel reflected its skinflint roots. "Weak and confusing navigational architecture, cluttered purchasing process," wrote Nicholas DiGiacomo. "Ugly in a Yahoo sort of way," agreed Mark C. Thompson, but added, "It definitely achieves the company's business goals." --A.S.
Conversation with Mark C. Thompson
Trying to keep up with Mark Thompson is like chasing a hummingbird. That's because he never stops moving. During this phone interview, for instance, he's driving from Silicon Valley to San Francisco. En route, he stops for lunch and polishes off a chicken sandwich, all while talking nonstop about why Internet ROI isn't an oxymoron.
If anybody knows about E-commerce investments, it's Thompson. Currently, he's chairman of Integration Corp. of Mountain View, Calif. Previously, he spent 12 years at Charles Schwab & Co., most recently as executive producer of Schwab.com. Thompson, 43, says return on investment relates to how well companies know their customers -- and how well they treat them. More Thompson musings:
On the winners: "These companies jumped out at me because they appeared to quickly solve the problem the customer would be coming with: They want to buy sports supplements. They want to buy accessories for a mobile phone. They want to custom-design a houseboat."
On the losers: "I'm always surprised when you can't actually complete a transaction on a site. Most people aren't coming to browse. You need to have empathy for the poor customer who's trying to get things done."
On designing for success: "There's going to be a shift away from the designer Web site -- one that's used to showcase a company -- towards a new pragmatism. [For example] Yahoo is enormously successful. Yahoo isn't pretty. It's fast, it's effective, it's on target. That should be a lesson." --A.S.
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