Diapers.com expects $30 million in 2007 web sales

Finding a niche and sticking with it is helping Diapers.com hit the sales fast track. In 2006, Diapers.com finished with sales of $11 million—340% higher than web sales of $2.5 million in 2005—and expects revenue to exceed $30 million in 2007, an increase of 173%.

Four years ago, co-founders Marc Lore and Vinit Bharara scanned dozens of consumer products categories and ranked more than 250,000 keywords and phrases looking for an under-served niche. They chose diapers as their prime merchandise category after their research showed that young families and couples about to start families were shopping online for specific diaper brands and other baby care products at discount prices.

“Shoppers were making more than 200,000 keyword searches on diapers each month and we couldn’t believe there weren’t more retailers going after the business opportunity,” Lore says.

Since founding the business as 1800Diapers Inc., Diapers.com, No. 396 in the Internet Retailer Top 500 Guide, has shipped more than 50 million diapers to about 120,000 parents, Lore says.

Diapers.com is growing because it’s taking the time to understand its niche and how shoppers are using search engines to find the specific products they are looking for. “We combed through search engine rankings looking for the right niche,” Lore says.