Hard driven seniors spin profit

Podvertising To Grow Fivefold, But Remain Niche

Chatting over sushi on a week night in the Cafe, seniors Robert Burns and Sarah Schoen seem like typical Bowdoin students—except for the fact that they just made more than $50,000 in profit with their recently founded computer resale business, which was founded just four months ago. And that is only the beginning.

The idea for the business first struck Burns last summer while he was working for the Maine Department of Education in Augusta. He learned of a program through the Maine Learning Technology Initiative (MLTI), which leases Apple iBook computers for every seventh and eighth grader in the state's public schools. After the computers' four-year leases end, MLTI buys the computers for about $40 each from Apple and sells them at extremely low prices in a surplus warehouse in Augusta.

Burns saw an opportunity for quick profit by updating the computers and reselling them on Web sites like eBay and craigslist.org. Burns, a computer science major, was familiar with easy and efficient tasks like reimaging a computer's hard drive and upgrading the memory chips, which greatly increases the laptops' selling value. In August, Schoen partnered with Burns on his entrepreneurial venture, and together they pooled their savings to buy 12 computers, planning to survive the remainder of the summer on canned spaghetti if their investment fell through.

However, the small-scale Internet scheme was so successful that it quickly escalated into a full-fledged business called Appleton Computers (both a play on the merchandise they sell and a tribute to Burns's first-year dorm). Following a lawyer's advice, Burns and Schoen registered with the State of Maine as a limited liability partnership in order to protect their personal assets. Within two months, Schoen and Burns recruited three Bowdoin friends and Burns's father as investors by offering a convincing sales history and handsome profit shares. The extra cash allowed them to expand the operation, and soon they were selling 90 to 110 laptops a month to customers in the United States, Canada, the United Kingdom, Ireland, and Germany.

Appleton Computers currently boasts a 100 percent customer satisfaction rate on eBay, but the Web site has been less than satisfactory for business. So far, eBay has suspended the business' activity twice without warning or explanation, which significantly disrupted sales.

"We believe that they thought the computers were stolen. It was like: suspend and ask questions later...There was a real lack of communication," explains Schoen. During the three weeks it took to straighten out the matter, the pair would probably have sold well over 40 computers, so the setback was "a major hit."

Another difficulty Schoen and Burns have faced is discerning reliable buyers from scammers. They have been warned of certain groups from Africa and Asia that send fake money orders, so Schoen and Burns personally monitor all the e-mail purchase requests they receive carefully.

Despite a few bad experiences, Schoen enjoys dealing with the customers and occasionally makes generous exceptions in order to please them: "Sometimes we'll get messages saying things like 'I'm a single mom, I'm working two jobs, I could really use this computer, but I can only afford to pay this much' and we'll say 'Okay, you've touched our hearts, that's fine.' Then we'll get a follow up message that says 'This really means a lot to me and it made a big difference in my life.'"

Over Winter Break, Schoen and Burns attended the Consumer Electronics Show in Las Vegas, which is the largest industry-wide convention.

"We went there to find some more business contacts. We talked to a few people, and we didn't really find too many people who would sell us Apple computers, but we found plenty of people that would sell us other electronics, like digital cameras, so we're toying with the idea of branching out into more than just computers right now," Burns says.

Schoen and Burns also hope to develop their own Internet auctioning Web site and enlarge the business to include textbooks. They want to market the site to students on a budget by posting links on university Web sites. However, at this time both Schoen and Burns are unsure of their post-graduation plans.

"The greatest part about running an Internet business is that you can live anywhere in the country and still operate," Burns said.

Go to source.

Miscellaneous BusinessesGreat Entrepreneurs in the Movies
eBay Listings That Draw New and Repeat Customers

Sold on eBay, Shipped by Amazon.com

Dell program to award $30,000 to innovative small business

Your next eBay purchase could arrive at your door in a brown Amazon.com box.

Amazon.com, the online retailer, is expanding a program designed to allow independent sellers to use its network of distribution centers to store and ship their products, according to Jeffrey P. Bezos, Amazon’s founder and chief executive.

Since last fall, the program, Fulfillment by Amazon, has allowed independent sellers who list their goods on Amazon.com to use its network of more than 20 distribution centers around the world to fill orders. Now Amazon, which is based in Seattle, is opening the program to vendors who list their items elsewhere on the Web — on their own site, through Google, or even on Amazon’s e-commerce rival, eBay.

The program is part of a broader set of tools called Amazon Web Services, an effort by the e-commerce pioneer to rent out complicated parts of its infrastructure to smaller companies that might benefit from its hard-earned expertise, and who will pay for the privilege of lightening their workload.

Think of as it Amazon 2.0. Though the company’s primary business appears to be booming — it announced a 32 percent increase in revenue this week, which sent its stock soaring 40 percent in the last two days — revenues will inevitably flatten as the company matures. If it wants to keep treating investors to torrid growth, the company needs to develop other ways to make money.

Wall Street has never liked Amazon’s 10 million square feet of shipping space, far preferring eBay’s frictionless role as a meeting place for buyers and sellers. But Mr. Bezos is now doubling down on his company’s gritty infrastructure. He thinks that one day Amazon could do the dirty work of storing products and fulfilling online orders for many of the e-commerce companies on the Web.

“We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years,” he said. “We’ve gotten good at it. Why not make money off it another way?”

In a conference call with Wall Street analysts on Tuesday, Mr. Bezos said that the overall Amazon Web Services initiative was growing rapidly, but was not yet profitable. Another Web services program, Amazon Simple Storage Service, or S3, allows businesses to store their data on Amazon’s own computer servers. Mr. Bezos said S3 now held 5 billion “objects,” or pieces of data, up from 800 million last July.

Fulfillment by Amazon, in development for the last three years, is one of the oldest efforts in the company’s stable of Web services. Unlike S3 and other recent initiatives, Fulfillment by Amazon involves the movement of physical goods instead of digital information.

Participants in the program, which is still in the experimental phase, can sign up on Amazon’s Web site and print out stickers that they put on their goods. They then send their products to Amazon, which stores the items commingled with its own. Amazon ultimately ships them to customers when they are ordered online (and charges the seller a variable fee based partly on the weight of the item and the shipping cost).

Sellers are effectively paying to ship their goods twice. But the program is aimed at small online retailers who have filled up the space in their basements and attics but want to avoid buying and managing their own warehouses.

It also can increase revenues: using Fulfillment by Amazon to sell on Amazon’s third-party marketplace qualifies products for the shipping discounts the company offers buyers, which typically improves sales. But the program’s biggest benefit, Amazon says, is to relieve sellers of one of the most laborious parts of their business — packaging products and getting them to customers promptly.

“This is the dirty secret of e-commerce,” said Joe Walowski, a senior product manager who manages Fulfillment by Amazon. “It’s not just bits and bytes. You have to figure out this part of it.”

The program has some enthusiastic early customers. Barry Mark, who runs Treebeard Books from his home in Palm Beach County, Fla., buys surplus books and sells them on Amazon and other sites. Since he signed up for Fulfillment by Amazon last September, he says that his sales have jumped more than 30 percent, and a third of the orders that come in are from members of Amazon Prime, the company’s premium discount shipping program.

But he says he sees the biggest benefit in the reduction of his workload, on peak days when 200 packages have to go out the door. “Usually there’s not enough hours in the week to ship everything,” he said.

Mr. Mark is so enthusiastic, he says he bought stock in Amazon after it announced the program last year.

He is also bothered by the use of brown Amazon.com boxes for the merchandise he sells on the other e-commerce sites. “My other selling sites are not going to think well of that,” he said, because it could lead to consumer confusion. “And it’s not like I can afford to anger those other sources.”

An Amazon spokesman said that the company was considering using blank boxes when it shipped products purchased on other sites.

Fulfilling orders for other companies is not a new business for Amazon. In 2004, Toys “R” Us contentiously dissolved a partnership after saying that Amazon had broken their exclusive agreement by letting other parties sell toys on the site.

Last month, the bookseller Borders parted ways with Amazon to create its own Web site and take a larger part of the revenue from online purchases. Amazon still manages the online store and order fulfillment for Target, the retail chain.

Scott Wingo, chief executive of ChannelAdvisor, which makes e-commerce software, says smaller companies have the same reasons as larger players to fear partnering with Amazon on warehouse distribution. Amazon might give its own orders priority during the busy holiday season. And if packages are shipped late, the small retailer, not Amazon, would suffer in the eyes of customers.

“When you are late, the feedback from customers is immediate and negative,” he said. “Losing control of that important aspect of business is a little scary, maybe even more so for small and medium-sized businesses.”

Then there’s the unresolved question among many small retailers of whether Amazon has yet worked out the kinks in its fulfillment program.

DL Byron, the Seattle-based inventor of the Clip-n-Seal, a device that closes plastic bags, shipped several cases of products to Amazon last fall, but said the merchandise is currently lost in an Amazon facility. “To their credit, Amazon is working with us to resolve the problem and assigned us a person to talk to,” Mr. Byron said. “But somewhere in their giant warehouse sits our product, and if it’s not available to ship, it’s not available for sale and not making us money.”

Mr. Bezos and other Amazon executives stressed that the program was still in its early stages. “We will have to earn the reputation for doing this at such a high-quality way that people are willing to let us do it for them,” he said.

Even if he proves that to sellers, Wall Street may still respond with a shrug. Already many analysts who cover the company have expressed more frustration than interest in Amazon Web Services.

Expanding the fulfillment program to include non-Amazon sellers “almost suggests they are so confident with their core business that they can expend resources and management time on this,” said Safa Rashtchy, an analyst with the investment bank Piper Jaffray & Company. “But the core challenges have never been larger. To some degree this is a distraction.”

Mr. Bezos noted that in the past, new company initiatives such as selling electronics and the expansion into overseas marketplaces were viewed with similar skepticism. “We are willing to plant seeds that take time to grow,” he said.

[via nytimes.com]

What "The Secret" Means to Solo Entrepreneurs102 Personal Finance Tips Your Professor Never Taught You
Austin inventor racks up patents

World's Most Unusual Moving Company

Selling Cyber-meals

Shawn Lyons Story

http://www.rabbitmovers.com/

Rabbit markets itself as an anomaly in an industry with a bad rep, capitalizing on a staff of artistic types, word-of-mouth referrals, and a Web site that posts positive customer testimonials and descriptions of extra services traditional moving companies don't usually offer.

So far, Rabbit's bare-bones sales and marketing strategy—except for maintaining its site, the company spends no money on advertising—is working. Rabbit's founder, former itinerant writer Shawn Lyons, who started the moving company in 2004 for $1,500—the cost of a 1981 Dodge Ram cargo van—estimates revenues will be around $300,000 in 2006. This is up one-third from a year ago. "Originally, I was just going to do the 'man with a van' thing and have time to write," Lyons says.

But about nine months into helping friends move their furniture in his spare time, Lyons decided he was onto something because demand kept increasing. So he pursued the licensing and insurance required by New York City and State and started to build Rabbit into more than just a traditional moving company, carving out a niche with young urban dwellers.

Today Rabbit, apart from making residential and commercial moves within the New York metro area and renting storage space, also offers massages ($80 per hour) and feng shui ($200). Clients normally take advantage of these extras after the move. Moving prices range from $100 an hour to a flat $1,500 for a complicated, labor-intensive move that includes packing.

Toby MacPhearson, a 31-year-old information-technology worker in Manhattan, paid Rabbit about $650 to move from the neighborhood of Chelsea to Hell's Kitchen, and is glad he took advantage of the feng shui service. "I was mostly in it for the practical aspect: It helped me reduce my stress by helping me set up the apartment in a logical manner," says MacPhearson, who has since referred two friends to Rabbit.

Still, Rabbit is a tiny presence in an industry that generates approximately $7 billion a year in revenues and employs an estimated 450,000 workers. David Sparkman, a spokesperson for the American Moving and Storage Assn. (AMSA), an industry advocacy group with 3,400 members, estimates that there are 5,000 to 6,000 mostly small, family-owned moving companies, with just a handful of large van lines.

With so much competition out there, concentrating on a unique group of customers has helped Rabbit establish a strong reputation. Apart from Rabbit's positive plugs in its Web site's testimonials section, sites like Apartmenttherapy.com and Brooklynian.com include posts such as: "Rabbit Movers are awesome. I've used them and passed them on to friends as highly highly recommended."

That seal of approval lends multiple benefits to Rabbit. "The notion of community in an urban setting leads to positive word of mouth, customer loyalty, and branding, and it seems like Rabbit has all of those," says Heidi Neck, assistant professor of entrepreneurship at Babson College.

Those who hire Rabbit to help them move shouldn't expect stereotypical movers. "Most of our guys are artists or in some creative field; they're just a really creative bunch," says Lyons, who counts chefs, painters, musicians, and writers ranging in age from 23 to 43 as his employees. "We're trying to move away from the perception of movers being supermacho creeps. Movers kind of have a bad rep in New York, and for good reason. There are a lot of scams, so we try to combat that," he says.

Aside from wanting to work with people whom he liked on a personal level, Lyons says it was easier to communicate the tone he's trying to create for the company to people who already intuitively understood it through their own experience. Trying to nurture friendly interactions with clients further sets Rabbit apart from the competition.

Since good employees are the key to creating a good moving experience, Rabbit pays fair wages across the board. Lyons says most of his movers make between $13 and $15 an hour, while many other companies pay workers under the table or at minimum wage. Keeping morale up, he says, is a necessity when your primary selling point is alleviating stress for the customer.

Also atypical of a moving company: Rabbit's community of young movers and customers is forming around the Brooklyn art scene. Lyons studied literature and writing at Temple University in Philadelphia and wanted to have his career fit with his creative background. So he recently bought and renovated a space in Brooklyn's Dumbo neighborhood (Dumbo stands for Down Under the Manhattan Bridge), where he now rents space for artists to display their work.

Not directly related to Rabbit's moving business but intimately connected with its people and its style, the studio will host exhibitions at this year's Dumbo Arts Festival, and some of the artists will be Rabbit's own movers. Lyons says most of the people he expects to attend the exhibition are former customers who asked to be added to the Rabbit mailing list.

The company also specializes in moving art for galleries. Lyons says the movers' appreciation for the work establishes a trust between them and the client. "What's really great is that they're not just movers, they're really smart guys. In a business you need things that are malleable—people who are quick and able to adjust to what you need," says Priyanka Mathew, gallery director for Gallery Arts India, one of Rabbit's clients, and a former banker at Goldman Sachs. Mathew says Rabbit has moved scores of contemporary Indian paintings and sculptures without damaging a thing.

The company also employs a design aesthetic on its Web site, trucks, and T-shirts that appeals to its target demographic of young urbanites. "I just went along with what I would want in the aesthetic of the designs, the character, and quality of the movers. So far it's working, I think," says Lyons.

Rabbit's faithful clients—Mathew included—agree that the company's got staying power. "I really think this is the way that business is going to be moving—especially small business. You have to be sound fundamentally, but to create a niche and an edge, you've got to try and differentiate yourself, and that's what Rabbit does very well," says Mathew.
The Littlest Hitler - StoriesThe End Of News As We Know It
Hot Franchising Trends for 2007

Reading, Writing and Entrepreneurship?

Cedric The Entertainer-You Da Bomb(stand-up comedy)

Wish you could've taken entrepreneurship instead of arithmetic in elementary school? You'll be jealous of the kids at Jean Parker Elementary School in San Francisco. It's not that they're foregoing a traditional education, but the fifth graders are getting supplemental classes in business from Salesforce.com and the BizWorld Foundation, which includes hands-on experience running their own small companies and competing for business from fourth-grade clients.

Kids in other schools are getting this type of experience, too, from the National Foundation for Teaching Entrepreneurship, which sponsors business programs for students ages 11 through 18 in Los Angeles, San Francisco, Chicago and other cities. Gerald Richards, head of the Bay Area NFTE says, "Business curriculum engages students in learning much more than the basic '2-plus-2-is-4' system, and it gives them a way to connect to their education."

Of course, not all kids will want careers in business. And some critics say that these programs corporatize the classroom a bit too much or are mere advertisements for their corporate sponsors. But these programs may be the only real glimpse some kids get into the business world.

If you think business education is a good idea, maybe you can find a local program and get involved in entrepreneurship education in your community.

How to Get Ideas by Jack Foster105 Service Businesses to Start Today
Some things beat a hefty paycheck

On Unsolicited Advice

Untapped Riches: Never Pay Off Your Mortgage--and Other Surprising Secrets for Building Wealth

Once you start your own business, the advice pours in from all sides: Your sister has a great idea for a marketing campaign. Your brother thinks you should get a franchise. Your father wants you to be tougher on your employees. And your mother, who's worried about you, suggests that maybe you should really be looking for a job.

Unsolicited advice doesn't just come from family members. Friends, lawyers, accountants, even strangers you meet at networking events or soccer games suddenly become experts when they learn that you own your own business.

It's a jungle out there. Of course, you could just ignore them all and go your own way. But some people have good ideas and insight. How do you know who to listen to and who to ignore?

Here's a handy guide for determining what advice to pay heed to, and who you should politely thank and say, "Could you pass the cheese plate please?"

• Experienced businesspeople in your industry: Listen hard to these folks! Novice entrepreneurs often believe they know better than those who've been around a long time. But the realities of an industry don't change quickly. You can learn a lot from those who've been in an industry. So listen closely even if you don't follow their advice to the letter.

• Customers: You'd better be listening to your customers, because they're the ones who determine whether you stay in business. It's tempting to dismiss the advice of customers because it often comes in the form of complaints. Instead, look for ways to gather as much insight and suggestions from customers in positive situations. Ask for their feedback.

• Employees: Your employees can be a rich vein of insight and advice for your company. Seek it out, listen to it carefully, and use it when you can. Create an environment where employees know their advice is welcome, valued, and given a careful hearing. Employees often know the ins and outs of some aspects of a business better than the owner.

• Investors: Your investors are, in essence, your partners, so the advice-giving and advice-taking process is a two-way street. It's part of your job to help your investors know enough about your business so that when they give you suggestions, it can be informed and well-reasoned.

• Board and advisory committee members: In most cases, people serve on your board of directors or advisory committee because you've asked them to, so their advice should be given great respect. Board members (of corporations) have legal authority, so board decisions must be followed.

• Friends and family: Your family's support is often essential for major business decisions, especially financial ones. If you're taking a home equity loan, for instance, you certainly must have your spouse's approval. In which case, they have a right to have their suggestions listened to with respect.

But on other decisions, remember, people close to you have their own motivations and their own fears coloring their advice. When your spouse suggests you'd be a lot more productive if you didn't work in the living room, he or she may just want to get your stuff out of the way.

Rich Today, Poor TomorrowMatzoball on David Letterman
dane cook