Paper: Houston Chronicle
Date: Sat 07/08/2006
Edition: 3 STAR RO
E-COMMERCE: Not too long ago, a local businessman had little technological savvy. Now his Web site is generating $45 million in sales. Entrepreneur says he is sold on the merits of online retail
JAY Steinfeld's Blinds.com is set to take in $45 million this year - a far cry from its humble online beginnings.
"I'm a CEO of a company that thrives on e-mail, and 12 years ago I didn't know what e-mail was," he said.
What he lacked in technical know- ledge he made up for in "guerrilla marketing."
For example, the original name for his Houston-based online company selling custom blinds, shades and shutters was Nobrainerblinds.com. His office was in his West University home and he got permission from his neighborhood post office to list his business address as "One Brainer Tower" to sound bigger than he was.
After his business took off, a competitor asked him, "How big is One Brainer Tower?"
"You'd be surprised," Steinfeld replied.
During the dot-com boom, shortly after Steinfeld first went online, it seemed like every entrepreneur, even those without a bricks-and-mortar storefront, had to have an Internet presence. Many saw the Net as a way to start or expand their business. Many tried and many failed.
He has survived - flourished, in fact - to tell about it.
Steinfeld, who previously owned a walk-in drapery store, strongly recommends e-commerce, as long as you find ways to differentiate yourself and make the online shopping process easy.
And now is a better time than ever, Steinfeld said, because high gas prices make shopping at home more appealing.
"There is still a tremendous amount of growth in online retail," said Scott Silverman, executive director of Shop.org, the online wing of the National Retail Federation.
A key factor driving online business is the Internet becoming "increasingly integral to people's lives," Silverman said. "But understand what you're getting into. These aren't the early days of e-commerce."
Some companies have gotten very skilled at it, creating "a high barrier to entry," he said.
Steinfeld's online business has soared beyond its modest origins. In the 2006 Internet Retailer Top 500 Guide, Blinds.com is listed at No. 186 - a notch higher than Nike.
It is the 10th-fastest growing e-commerce company, according to the same guide.
And recently he was named Ernst & Young's Entrepreneur of the Year in the retail wholesale division for the Southeast Texas and Louisiana region.
He credits part of his success to his effort to make the online buying process easy. Too many online entrepreneurs get caught up in the aesthetics, as opposed to functionality, he said.
"Rather than think about what looks good, think about what your customer needs and present it in a logical, thoughtful and trustworthy way," he said.
Think of your online site as "a regular store," he said. "Make the process seem as if you were face-to-face, telling them what they need to know.
"And if they already know what they want, make it easy for them to find it. Don't bury it."
It is also important to differentiate yourself from the competition, he said. In the case of Blinds.com, he emphasizes value and offers some products that can be custom-made in one day. In the vast online world, it is crucial to find ways to make sites as easy to find as possible.
For years, Steinfeld worked on getting other sites to link to his. Often it's a case of: "I'll provide you a link to yours if you provide a link to mine," he said. About 1,000 sites link to Blinds.com. It's harder to get people to do that now, he said.
A lot of time and money are spent on getting an online company's name listed high on search-engine sites such as Google and Yahoo, Silverman said.
There are two types of search engine listings: sponsored listings, which are paid for, and organic listings, which are free.
Getting your company name placed high on an organic list depends on the key words and phrases search engines find on your site and other factors, he said. Search engine optimization consultants can be hired to improve placement.
Steinfeld's first foray into retail was a walk-in store.
He and his late wife, Naomi Steinfeld, opened Laura's Drapery in West University in 1987, and soon after a second store in Clear Lake. The stores generated "a lot of income, but not much wealth," he said.
He considered getting into the mail-order business to bolster Laura's revenue, but soon realized he could not afford catalog production, mailing expenses or advertising.
In 1994, he decided to invest $1,500 in a Web site, lauras .com. "It was really just a brochure," he said.
Two years later, as an experiment, he put $3,000 in a new site that allowed people to place orders for blinds. Custom-made fabrics would have been too hard to sell online, he said.
His online operation was primitive. He'd get a phone order on his "heavy as a brick" cell phone while driving. He'd pull off to the feeder road, and take out his price sheets, order form and calculator.
`I was having fun'
"I didn't know if it would be a huge business," he said. "But it was generating "some" business, and I was having fun."
Having no money for marketing, he scoured bulletin boards on the Internet to track down people looking for blinds.
Over a five-year period, his online business grew to $1.5 million in annual revenue.
In early 2001, he "got serious" by acquiring a major competitor in Florida. The financing came from friends. The same year, he sold Laura's.
Four years ago he bought the name Blinds.com after paying "six digits easily." The price was well worth it, he said.
"It's the No. 1 name in the industry and gives us such a competitive edge. It also helps with search-engine listings."
The success of Blinds.com may make e-commerce sound appealing, but NRF's Silverman cautions entrepreneurs to first do research to validate an investment in an online operation. "Success or failure depends in great part on who your online competition is," he said.
"Ask yourself: `Will I be offering something unique or better than what's already out there?,' " Silverman said.
A good interim step, before establishing an online business, is to create a Web site that isn't transactional, but a place to describe the business, announce sales and other events and collect and send e-mail, he said.
Steinfeld is so sold on online retail that he's planning to launch new sites selling products unrelated to blinds.
With a traditional walk-in business, location is everything, but it's not the same with online retail. Blinds.com's Meyerland-area office is hidden on the second floor of a strip center.
"We don't want people coming in," he explained. "We're a direct-marketing company, we're not a store."
Occasionally, when someone happens to walk in, "We say: `What do we do now? Who's going to talk to this person? How do we get them out?' We're just not set up for that," he said.
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