The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Running three niche web sites keeps Jon Hoch plenty busy, but when an ice storm or hurricane causes a power outage somewhere in the U.S., he puts his operation into overdrive.
Running three niche web sites keeps Jon Hoch plenty busy, but when an ice storm or hurricane causes a power outage somewhere in the U.S., he puts his operation into overdrive. “When power outages hit, we immediately go into those markets to help them out,” says Hoch, founder of Power Equipment Direct Inc.
Hoch (rhymes with Coke) decided to launch Power Equipment Direct Inc. in the Chicago suburb of Romeoville, Ill., in 2002 after running into difficulties trying to find the right lawnmower at a local home improvement store, which was out of stock of the model he wanted. “I figured I could do a better job selling lawn mowers and other large products online,” he says.
He decided to focus not on lawn mowers, however, but on the types of equipment that stores typically don’t carry in large quantities-electric power generators, air compressors and water pressure machines-with a web site dedicated to each. Sales have gone surprisingly well, he says. “The whole idea of people buying power equipment on the Internet-we never expected it to be as successful as it’s been,” Hoch says. “I had plenty of sleepless nights wondering if this would work.”
The company was on course to do $15 million in 2006 sales, up from $9.5 million in 2005. “We cater to men who use these at home or at work,” Hoch says, adding that he also serves a gift market. While PressureWashersDirect.com does particularly well around Father’s Day, and AirCompressorsDirect.com gets a boost during the holidays as a source for running power tools, sales at ElectricGeneratorsDirect.com often follow storms that create sudden demand for alternate power supplies.
Hoch monitors daily news feeds of weather reports around the country. When a powerful storm hits somewhere, he immediately searches the web to find the local power company, then usually finds on the power company’s web site a detailed map showing any communities hit by power outages.
Next step is to search the web for a radio station serving those communities, then e-mailing the station an audio file of an already prepared radio commercial with details about available electric power generators ordered either online or through a toll-free telephone number. “We promote our 800 number in case people can’t log onto the web but can still use their cell phones,” Hoch says. The whole process of finding and then marketing to impacted communities can occur within hours, he adds.
Although Power Equipment Direct has also worked with newspapers, it has found radio the most effective and efficient medium and the fastest way to reach potential customers, Hoch says.
Ads placed on the radio as well as in local papers, however, also have a lasting impact on sales. When a winter caused the power to go out in Buffalo, N.Y., and the nearby community of Tonawanda, Hoch says, “we sold 250 generators in the 2-week period after the storm, and the orders are still coming in.”
With plenty of more snow in the forecast, Hoch is considering additional niche sites, he says. One is SnowblowersDirect.com.