Although Ellison had offers to buy the company back in the days of the initial Internet boom, he said he knew he was in it for the long haul. “While it was tempting, we stayed the course,” he said. “We grew the business brick by brick. By 2001, we expanded to the full spectrum of office products, and today, we offer more than 400,000 products for the office.”
Ellison said there are a number of factors that separates it from the big brick and mortar office supply chains that also offer online shopping. “We’re the number one e-retailer in our category, which is a big accomplishment considering where we started,” he said.
“Innovation has been the key to our success. We not only offer e-procurement, we have also built a niche by offering the widest selection of green products online.”
E-procurement tools for small businesses
“As broadband became more widely available, our capabilities expanded as well,” Ellison said. “Shoplet made its mark on the business community by offering a complete, free of charge e-procurement product that allows small and medium businesses to streamline their purchasing processes and gain control over their ordering.”
The e-procurement system allows customers to set up budgets by department, location, and even individual user. “The program allows users to enter approval routings and corporate purchasing policies within Shoplet,” said Ellison. “A typical application like this offered by Ariba is more complex to use, and the starting price is $750,000. When you think about small and medium businesses, they can’t really afford that price.”
In addition to the e-procurement application, the company offers a large selection of eco-friendly products. “We started the Shop Green campaign about 30 months ago, and since we have started pushing that message it has been widely received,” Ellison said. “Over the 30 months, the sales of the Shop Green products have increased by 1,200%. That’s a huge number, and it’s allowed us to keep ahead of our competition.”
In addition to offering thousands of eco-friendly products, the website’s shopping cart offers suggestions for eco-friendly products when non-green products are put in the cart. “We make it easy to convert that product with just one click,” Ellison said. “That’s just one of the many innovations we have pushed forward.”
Promoting good relationships
Shoplet is very conscious of maintaining good relationships with manufacturers and customers, according to Ellison. “One thing we do that makes us successful and is different from some of our competitors is that we are very much focused on our manufacturers,” he said. “A lot of the big companies make it very clear to Wall Street that the most profitable segment of their business is coming from their generic or private label brands.”
Ellison said the private label brands don’t really foster innovation. “From our perspective, this erodes the marketshare from the manufacturer and puts a lot of them out of business,” he said. “We are very brand conscious. If we want to support a company like Avery, we don’t go out and promote our own private label products.”
The company puts just as much effort into maintaining good relationships with its customers. “We are passionate about servicing our customers and keeping them engaged,” said Ellison.
One way the company keeps customers engaged is through its wide array of product offerings that include more than just pens, paper, and basic office supplies. “In a 250- to 500-person company, one person typically does the buying not just for office supplies, but also for everything the business needs, from break room supplies to janitorial supplies,” Ellison said. “These kinds of areas have been doing very well for us recently.”
Positioned for growth
Shoplet has experienced tremendous growth over the past decade and is in a prime position to take advantage of the growth in online office supply sales. “From 2001 to 2006, the company grew in triple digits year over year,” Ellison said. “In the past several years, in one of the worst economies we’ve seen, we’ve still managed to grow aggressively with strong double-digit growth.”
As many other companies have laid off employees, Shoplet has added to its workforce. Last year, the company increased its number of employees by 40%. “This is a company that has truly been in a phenomenal growth mode,” Ellison said. “That’s reflected not only from a sales perspective, but also how we have stretched our core and added additional categories.”
The office supply business is a $250 billion per year business, according to Ellison. Five years ago, about 5% of the business was done online, but by 2011, he expects that number to grow to almost 50%.
“We see ourselves as being well positioned to experience the phenomenal growth this industry is going through,” Ellison said. “I think the era of people going to retail stores and buying heavy cartons of paper and paying list price is over. Many large companies understand that retail space is beginning to be a liability, and we are in a position to leverage our advantages from that perspective.”