July 21, 2011, 1:48 PM

My Second 500 Favorites

How can you not love these guys? They’re passionate and quirky, and they prove you don’t need $100 million in venture capital to succeed at online retailing.

Everyone loves an underdog story.

That’s why after wrapping up months of research on our first edition of Internet Retailer’s Second 500 Guide, I can’t help but feel a bit warm and fuzzy toward our group of up-and-coming web retailers.

I suppose I feel that way because most of these folks got started in an attic or a basement or a dorm room with only a great idea and a few hundred bucks. Now they are running growing and successful online businesses in a space where Amazon is king and such retail chain giants as Wal-Mart and Target are becoming increasingly aggressive competitors.

I can’t help but love the fact that in e-retailing, even though one company can own 20% of the market, there remains room for plenty of underdogs.

Our first edition of the Second 500 Guide is chock-full of these types of retailers—creative and sometimes quirky, they are experts in their specialties and provide customers with an experience they can’t get on Amazon, or anywhere else, for that matter.

The 368-page 2011 Edition of the Second 500 Guide breaks down the “what’s what” of the “who’s who” of the up and coming online retailing market leaders. The Second 500 Guide ranks merchants numbered 501 to 1000 on their 2010 web sales. You can view the rankings and purchase your copy now by clicking here.

One of the more silly—but brilliant—business ideas comes from PriveCo. Inc. (No. 792). Founder Tom Nardone got started in e-commerce way back in 1998 with the idea that, at that time, people were using the Internet to do things they wouldn’t normally do in the “real world” (like chatting with strangers or watching porn). So he set up about a dozen super-niche sites, each selling products that shoppers were embarrassed about buying in person. It worked too, as Vibrators.com, MinoxidilShop.com, OverTheHill.com and others brought in an estimated $3.4 million in sales last year. EnemaSupply.com brought in about $200,000, Nardone says.

The story behind RedOxx Mfg Inc. (No. 907) makes it another one of my favorites. Started by former marine paratroopers Jim Markell and his father of the same name, RedOxx’s 20 or so employees in Montana make heavy-duty luggage by pedal-powered sewing machines. In the beginning, it was just Jim Jr. and Jim Sr. sewing bags in the basement, employing the skills they learned in the military repairing sniper rifle bags, medic packs and rapelling gear in the field. Frustrated with early attempts to sell merchandise to specialty shops, RedOxx took its entire business online and direct to consumer, highlighting that its merchandise is “not sold at stores near you.” RedOxx brought in $1.7 million last year and is one of the fastest-growing manufacturers on our list.

Last but not at all least, the sleek and feature-filled site experience, quirky humor and behind-the-scenes-type feel at ScotteVest.com (No. 651) has me spending way too much time away from work every time I wander on the site. The retailer manufactures and sells travel apparel outfitted with pockets specially designed for iPods, iPads, smartphones and other gadgets. It has created somewhat of a cult following partly because of its hilarious YouTube videos like the one with CEO Scott Jordan modeling the Travel Boxers, which are, of course, outfitted with an iPhone pocket. It’s positively silly that any CEO would walk around in his underwear on camera, especially when accompanied by a cheesy tune in the background crooning, “ScotteVest…. There’s a pocket for that.” But this stuff works, as ScotteVest has grown sales 100% in the last two years, is tracking to do the same in 2011, and I’ve already bought two pairs for my boyfriend.

So I salute you, my up-and-coming e-retailing stars. I hope you feel vindicated by your success. And something tells me you won’t be underdogs for long.

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