Sramana Mitra: Regardless, in 2008 you were generating business at your own site. Talk to me specifically about your own site – developing your own site, business on your own site, the traffic. How much business do you do today on your own site?
OJ Whatley: Back then, as it is today, it’s primarily keyword-driven. Originally, it was all organic. It was a matter of getting as many relevant keywords in the title and in the top 10% that Google might scrape to have relevancy. I think one of the things that gave us greater relevancy and searchability was the fact that we were constantly putting up new inventory. That’s true today as well. Each day, we probably post five to ten new watches. There’s a constant new supply of inventory and content coming in.
Sramana Mitra: In that effort, what kind of competition do you have to deal with? Are there other sites online that are doing similar things that you compete with?
OJ Whatley: Our business has evolved significantly. We have now become the largest buyer of pre-owned luxury watches in the world. As a result of being the largest buyer of pre-owned luxury watches in the world, we’re probably the largest seller of pre-owned luxury watches as well.
Sramana Mitra: From a search engine optimization point of view, you are in the first or second slot in every single search of pre-owned luxury watches?
OJ Whatley: Yes.
Sramana Mitra: So organic search traffic is still powering a lot of your traffic?
OJ Whatley: Yes, but you can imagine, we have a substantial pay-per-click and digital marketing budget today. It’s probably one of our single greatest expenses on an annual basis. It truly is about staying on top of mind and it’s truly about maintaining the position on top. There’re always ten guys looking to spend more money than you, take your credibility, just knock you off the block, or render you irrelevant.
Sramana Mitra: What is the split today – from business that happens on your own site versus business that happens on eBay?
OJ Whatley: I would say eBay. I would say that probably 20% of our business is done via eBay. Keeping in mind that eBay is still the largest aggregator of watches in the world, so consider eBay to be a showcase and some people choose to do the business through eBay. Other people see the watch on eBay and choose to call us directly. It’s not a perfect science in that you can’t say exactly what percentage is eBay-driven.
I can tell you what percentage of our business is done on eBay with people completing the transactions through eBay. That’s probably around 20%. But as far as what our real eBay business is, it’s a hard number to get a hand on because you get a guy who sees a watch on eBay and then he calls our office. We have to track the fact that he saw us on eBay first.
Sramana Mitra: Is the price different on your site versus on eBay?
OJ Whatley: No.
Sramana Mitra: Do you have the same price on eBay versus direct?
OJ Whatley: Our goal is to maintain clarity. The price at which you can buy it on eBay is typically the same that we advertise on our website. Does that trend right into the prices we sell our watches out on eBay or the same price as well sell our watches off eBay? No, because eBay has a built-in fee structure that can be pretty significant when you start adding in 3% for PayPal and 2% to 3% completed auction surcharge.
We have more negotiating room when someone buys a watch from us off eBay because you can negotiate the method of payment. I’m not going to charge you the same price if you pay me by wire transfer versus paying me by credit card because my best price is a function of payment by wire transfer. I’m going to give you a discount for payment by wire transfer or check. Whereas with credit card, I’m going to stick to my ask price.
Sramana Mitra: Today, you have 75% to 80% or your business on your own website, right?
OJ Whatley: Yes.
Sramana Mitra: It sounds like that whatever calls that got you got kicked out of eBay actually turned out to be a blessing in disguise. You were forced to build up your own diversified strategy that you are much more in control of and have better margins on. It looks like this has resulted in a much more robust business today.
OJ Whatley: Absolutely. There’s certainly much more corporate value, so to speak, of having a website that gets 100,000 hits a month. I know that we can put up a watch today, and probably within three hours, someone will call us to buy that watch.
Sramana Mitra: What is the revenue right now?
OJ Whatley: We’re shooting for $20 million.
Sramana Mitra: $20 million for 2014?
OJ Whatley: That’s correct. What I want to emphasize is part of my journey. I started this business as a guy who wanted to work out of his house without relying on anyone. Now in 2014, the success of my business is from relying on other people. Being able to communicate my vision as it evolves so that we can grow the way I see us growing.