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Niche E-Commerce to $5M: Dan Dillon, CEO of (Part 4)

Posted on Sunday, Mar 3rd 2013

Sramana: When it comes to your commercial business, who are you selling to? Are your primary customers janitorial suppliers, or are they building managers?

Dan Dillon: We certainly have an audience of building contractors, maid services, and cleaning services that travel from location to location. The larger audience for us is the facility or office manager who is restocking their own facility. If you have 2,000 employees on site, then you are going to be using a lot of traffic.

Sramana: What are you doing to accelerate that corporate business? Are you going out and selling to them directly?

Dan Dillon: We are marketing to them on the web, but oddly enough, our business does not have any salespeople. All the traffic we catch we try to grow. We market to them electronically. We have batch and blast emails as well as segmentation emails. We are marketing to the client, and we are on the phone with them to support their business. However, we are not knocking on their doors to open new accounts.

Sramana: Are you trying to get to facility managers at big corporations?

Dan Dillon: Certainly. We attack that audience by profiling them in Facebook. We also use these folks in our banner ad re-targeting program. In the PPC effort, you can target specific term that would relate to a building manager or a facility manager. Anything wholesale related will generally indicate that it is a commercial buyer.

Sramana: How do wholesale-to-wholesale margins work? You are buying at wholesale discounts, but that is what they are looking for.

Dan Dillon: The margins are very, very lean. It is a volume game. We will run on 8 to 9 margin points. If the service is there and the price is right, then you will keep that client. We do not want a one-time customer. We need customers for life. We know that 38% of our customers return to purchase from us. In our market, that is a really big number. We have that number because of our focus on customer service.

Sramana: How do you handle inventory at this stage of your business?

Dan Dillon: We have not started taking inventory yet. We partner with United Stationers, which is one of the largest in the country. They have sister companies, and one of those sister companies has 35 warehouses across the country. That is who we partner with. We took our dollars and pennies that we saved and implemented an EDI system so that we can communicate with all of those warehouses every half-hour. They receive orders and process them, which allows them to ship the order very quickly. We get the customer payment on day one. The payment is in our account on day two, and we are paying the wholesaler 30 days later.

Sramana: What about the brand? When one of your customers receives the shipment, who does it come from?

Dan Dillon: It is branded for The outside of the box will be ink sprayed, or if it is drop-shipped from the manufacturer, then we will have materials included in the box. We also send customers t-shirts or promotional products directly from our office. We will include handwritten notes in those boxes.

This segment is part 4 in the series : Niche E-Commerce to $5M: Dan Dillon, CEO of
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