Capmark Financial Group’s newly combined companies generated more than $1 billion in 2014 e-commerce sales.
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VacuumBags.com sends customers an order confirmation as well as an e-mail message that the order is being processed. Customers usually receive their orders within three to five days. VacuumBags.com also plans to add a live help feature to increase sales. Currently, the site offers e-mail help.
Although relationship marketing and providing service to customers are helpful in maintaining and building customer bases for small retailers, niche players also have to contend with the conundrum of getting new customers as well. Getting to be known on the Net without extensive marketing campaigns backed by capital investments is no easy task. Extreme-niche retailers say that getting listed on search engines is the primary way they get new customers. The search engines provide services that allow retailers to bid for a top billing on search result lists. Most retailers agree that with hard to find or specialty products, customers who come in through searches become regular buyers.
While Vacuumbags.com was getting a few orders from customers who knew about the web site locally, orders increased when it worked with consultants who helped place them on search result pages. The company works to keep its web site high on search lists, including Goto.com, Findwhat.com and Sprinks.com. “We want to stay on the front page of the search list if not in the top three,” McClellan says. Today, VacuumBags.com has orders from around the country and around the world, those especially coming from U.S. embassy posts in such countries as South Korea, Puerto Rico and Canada.
For Music For Little People, word of mouth as well as its web links with like-minded business sites, artist sites and family sites have filled the marketing gap for a company that had little capital to work with. “We used Google.com for awhile. But at 35 cents a click-through, the cost was too high for the results we were getting,” Sherman says. “We have never placed banners and never paid anyone to be on their site, nor have we had others advertise on our site. We rely on mutual trade for marketing.”
Mar-Beck has an easier time paying for search page listings because there are so few retailers bidding. Costs rarely run over 5 cents per click-through, Wheeler says. Even though some parts sellers pay more, that nickel gets them in the top three search results. “Because we are such an extreme niche it’s still affordable to do this kind of marketing,” he says. Affiliate agreements with cooking or gourmet sites may also be in the future for Mar-Beck.
Part of developing an online presence as a niche player includes planning for the future. If the niche takes off online, will the retailer be able to handle it? This point is more than a quirky television commercial about handling overnight success online, it’s a reality for small retailers with big online plans and limited capital. “The big question for these niche retailers is how do you grow?” says KPMG’s Duncan.
GarlandGirl.com says its online business became so big that it closed its hometown retail store and has even had to turn down orders simply because the current staff of part-timers could not fill the orders. Bashoor says she has to consider financing in order to expand.
VacuumBags.com’s business is run by McClellan’s Lincoln City, Ore. Sewing Tech & Technique store, in which employees handle the pick, pack and ship. “Right now we are able to maintain the orders in-house,” McClellan says. “We have our own scale, we weigh the packages, put tags on them and drop them in the night box.” The retailer uses Hayward, Calif.-based Neopost Logistics Systems for shipping. “If I got more than 35 orders a day I would have to hire another person to package them up, and I might have to get some financing from the bank if the business was like that day after day. That’s a concern,” he says.
How big these extreme niche retailers will get online-or whether they will grow at all-is a decision each needs to make. But Duncan says the fact that many have either weathered the dot-com disaster or came into business after the online retailer crash means their plans for slow and steady growth based on sensible grassroots marketing are working. “If they can stay in business online for two to five years then they’re doing pretty well,” says Duncan. “If they’re profitable, then they’re doing great.” l
Still going: One niche retailer lives to tell of online growth
With the rate that online retailers have dropped off in that past 18 months, three years in business seems like a lifetime. But many extreme niche retailers, whose in-demand products are so obscure that the sites that sell them often fly under the radar of other retailing segments, are surviving and actually growing their businesses online.
In Internet Retailer’s first year, 1999, the magazine profiled several niche retailers. Revisiting one underscores the steps small retailers need to take if they want one day to be among the dot-com Methuselahs. Austin, Texas-based Complete Books and Media, which sells business and technical manuals to government and corporations, has seen its web business grow to be about 65% of total revenues of $2 million, up from as low as 30% three years ago.
How did it manage to grow its web portion even as governments and corporations cut back on spending? The company had no capital investments to fall back on and, even more importantly, staffers had to learn to do everything themselves, says Peter Coomaraswamy, president. He notes that what creates success on the web is what creates success in the traditional business world. Nowhere is that truer than in the small-business world, where it’s still important that everyone do every job.