It sounds like the stuff of an undergraduate's dreams: build a business selling beer pong tables to college students. But since its founding in 2009, Blue Ridge Product Solutions has grown up--a lot. Thanks to some savvy e-commerce strategies, the company landed at No. 380 on this year's Inc. 5000, an annual list of the fastest growing, private U.S. companies. Here, founder James Addison tells the story.
I started the company during my first year at the University of Virginia. It was a side project, something I spent two to three hours a day on so it wouldn’t disrupt my class schedule. At that point, I was certain I’d be going into investment banking or consulting when I graduated, and most of my peers were looking at interning for $8 or $12 an hour. I thought I could make more, learn more, and have something cooler to put on my résumé if I started something on my own in online retail.
I played around online and found there were these companies that let you market and sell their products, and then they’d ship them for you. A partner and I started selling all sorts of these things on Overstock and Amazon--everything from costumes to college party items, like beer pong tables and drinking games, to Airsoft rifles and accessories.
Of course, plenty of other people did the same thing with the same distributors, since all you needed was a little Web knowhow and a credit card. So we worked out a deal with them: If our vendors gave us a discount, we’d write them a check for the orders ahead of time, so they’d save the credit card processing fees and get cash upfront. We passed that savings on to customers--and soon we had the best price on Amazon and the other sites. Sales took off.
After a while, though, there were problems: vendors had great products but they ran out of stock all the time, or they charged high prices, or just didn’t ship on time. So soon we said, why don’t we cut out the middle man, and buy our own inventory? It would be more profitable and we wouldn’t have to ship stuff late. We started importing just a few different items, mainly the beer pong tables.
I raised money from friends and family to buy inventory--I was lucky enough to have this one uncle who wanted a little bit of equity and was willing to put a lot of money in because he saw our great sales. I bought two or three months’ worth of inventory--just a couple of different designs of beer pong tables. We knew what college students wanted--a low price--so we kept it simple. And since we were importing products specifically for online marketplaces, we didn’t need to invest in flashy packaging--no color boxes or annoying clamshell packaging, we just put the product in mylar bags and optimized the size and weight to ship for e-commerce, so we’d be within any FedEx size restrictions, or fit in a U.S. Postal Service flat rate box, and so forth. It saved us a lot of money.
Since then, we’ve expanded from college games to more niche outdoor games, to home and kitchen and outdoor furniture. Our product line went from a couple SKUs to a couple hundred, all sold on Amazon, eBay, and other online marketplaces. Our top sellers now are patio umbrellas and patio products--but our biggest seller is just 2 to 3 percent of our revenue.
Selling on Amazon is a numbers game. There is so much that goes into it, I can’t even tell you--you need good photos and good listings, of course. You try to identify products that are selling well but that you can get for cheaper, or items where you think you can offer better value for the same price. But if you launch 50 products, you might get just one or two that end up on page one of the search results, and five where, even though you have the best price and offer the greatest value, nothing ever happens.
Within three or four months, I was able to pay back my friends and family in cash. I graduated in 2012, which is a good thing--the company was becoming more than a full-time job. I hired a real staff shortly afterward, both here in Virginia and overseas. We have someone who finds and buys product for us full-time in China now. It kind of went from there. I want to build this into a great value brand. We want the people who’ve bought from us before for, say, their patio, to know they’ll get a good value and quality when they buy the next piece of furniture online. We’re building a brand that’s across home and outdoor and patio and kitchens.
And beer pong tables? We still sell almost $250,000 worth on Amazon annually--we’re the site’s No. 1 seller of them. But now they make up less than 5 percent of our revenue.
As told to senior contributing writer Burt Helm.