Sometimes it’s not about the produce that you sell but how you sell the product.
Sean Belnick must have had an inkling of that idea when he started BizChair, a company focused on providing businesses and individual customers with chairs in 2001. Picture this; 14-year-old Sean introduced to a brand new platform called the Internet. The possibilities are endless and frankly, too much to think about. So, Sean took advantage of the new and confusing market and provided a simple plan to people. Drop shipping, a system that was simple for any customer who wished to order a chair or two, became the primary business model. This method involved no inventory, but rather a system of instructions relayed to a manufacturing company via BizChair. This system was advantageous in the early days of BizChair because nobody had massive amounts of inventory on the internet yet that would cut into the Sean’s revenue. He also saw that it would cost too much to keep inventory that had no guarantee of selling. This goes double for office chairs. Who thinks of office chairs?
So, Sean envisioned the ease of drop shipping and used this exclusively in the beginning, but he was also smart enough to know that it wouldn’t last long. This model was great because it kept costs low, production easy and location a no-brainer; wherever your computer was, the company was there. The problem is that other competitors knew this too. It was too easy to lose out to others. Once sales were steady enough, BizChair switched tactics and kicked things into high gear. They had a name, they had funds; time to mass produce and under-cut those with their former business model by always keeping inventory and applying to a wider customer base. This allowed them to sell each products by 10-15% lower then before.
Another way Belnick had foresight into the internet world is the eventual emergence of thousands of online retailers. What would differentiate him from the rest? Excellent customer service was the key. From day one, he maintained a free-shipping policy and a 60 day money back guarantee. He credits this for much of his growth and success in the early years.
Even today BizChair maintains a professional outlook on serving their customers. Belnick says that drop shipping was critical but notes that the switch to an inventory based model was one thing that sustained the business in the coming years.
I think this principle is important to remember because it’s not only about starting a business; its about maintaining it and always looking forward.
Sean Belnick’s story is quite moving. I have done some research in drop shipping and his name is very well known. Belnick took advantage of early internet and understood its true power. I wish at the young age of 14 I too would have taken advantage of new technology. Instead, I was focused on sports and playing outside with friends. A gift and a curse in my opinion. At the dawn of digital marketing, Belnick created his own system capable of reaching a broad consumer base. His ability to keep a large inventory was crucial in gaining a loyal consumer base which also enabled lower prices. Who doesn’t like cheaper things! Great blog post!