Bucking the web trend of industry flameouts resulting from poorly executed Internet launches of the '90s, Backcountrystore.com celebrated its 5th anniversary in May. In a classic retail story the mirrors that childhood favorite of the Little Engine that Could, Backcountrystore.com began small, in a bare Heber City, Utah, apartment selling one item, an avalanche beacon. Ignoring the larger engines who boasted strength and speed, Backcountrystore.com founders pinched pennies by using patio furniture for conference room seating, making desks from doors, and even standing at the entrance to a recycling center to nab boxes to fill their shipping needs. While others scoffed or largely ignored the small company, it kept doggedly chugging along, bartering gear for shipping help, phone system installation, construction help and more.
By 2000, they'd turned the corner and suddenly, as the Internet world was crumbling around them, manufacturers and customers began to notice that maybe they weren't such a small deal after all. In fact, more and more manufacturers began to seek them out to carry their product. The Little Engine That Could, Backcountrystore.com, was now pulling industry cars up the hill.
Of course, success begets expansion and that is what Backcountrystore.com is currently experiencing. They've hired Jeff Carter, former operations manager for the Sundance Catalog company, to oversee the company's upgrade to a new e-commerce platform, an expanded warehouse, and for the hiring of new employees, all to better serve its expanding customer base.
While all the press-release flackery was quite excellent, SNEWS® thought it better to ask company co-founder and VP of business development, John Bresee (you might recognize his name as the former editor of Powder), a few questions for additional insight. The following is what he told us:
Q: How many unique visits are you seeing now as compared to last year, the year before and the year before that?
A: Our uniques are between 200,000 and 300,000 a month.… However, that is not a static number. The landscape changes really quickly on the Internet. Each year our traffic has grown between 100 and 150 percent.
Q: What is your conversion rate (conversion rate is percentage of visitors who turn into actual buyers)?
A: Our conversion rate is proprietary information. But over the course of the last 24 months, we have seen strong growth. However, it's our area of biggest focus and a large part of why we are building our new e-commerce platform. Our conversion usually trends with the industry.
Q: You have grown from selling one avalanche beacon in 1998 to how many skus now?
A: We currently have over 2,000 active parent skus..…Again, that's changing quickly.
Q: How many staff?
A: We employ 18 people. However we are currently looking for a graphic designer, warehouse, and customer service positions.
Q: How much has your sales volume increased year-to-year since 1998?
A: Total sales volume in 1999 was up 350 percent over 1998. Total sales volume in 2000 was up 107 percent over 1999. Total sales volume in 2001 was up 153 percent over 2000. For this year, we're tracking a 115 percent increase over the same time last year.
Q: Percentages are great, but don't really tell the full picture. Can you give us in indication of total volume?
A: Unfortunately I'm not comfortable giving out our sales volume in dollars. BackcountryStore.com has been really fortunate. A lot of what has happened has been pure luck. We made a bet that a specialty retailer on the Web that focused on high-end gear could benefit from aggregating a community of hardcore recreational athletes. We also understood early on that we are not technologists, but retailers. It's an important distinction as many Internet companies developed their own e-commerce platform, hiring many engineers to do it, and then had huge IT costs. Imagine if Home Depot kept employing all of the construction workers who built their stores. Many others bought Broadvision-like software which costs between $2 million and $10 million to implement and then require many engineers to run. It's a faulty biz plan at our traffic levels.
So we used off the shelf software, CPA marketing, search engine optimization, and fanatical gear enthusiast employees to build a business customer by customer.
The hardest part at this point has been predicting and buying for strong growth without getting unrealistic. It's sort of an "all boats float with the tide" situation. We can count on strong growth because e-commerce is still in the fat part of the growth curve. It's not a testament to our marketing skills as much as it is evidence that people are becoming more comfortable with the notion of e-commerce. So we are continually having to tell ourselves, 'Don't get cocky, assume this hayride ends pretty soon.' It's much like skiing 18 inches of fresh powder in November. It's a sweet ride but there's a nasty stump out there just under the surface ready to give us a vicious knee injury if we aren't incredibly cautious.
(SNEWS® comment: After checking with vendors and others in the industry who know Backcountry store well, we'd estimate its 2001 sales volume to have been in the $2.5 to $3 million range which puts the company on track to be grossing slightly more or less than $6 million this year! Now those are indeed very healthy numbers if accurate.)
Q: How do folks find out about your site store?
A: We are very skilled with search engines. Also, due to the fact that we have been online since 1996 there are now over 20,000 links directing people to us. The network effect is our friend. We have been very careful to use Cost Per Aquisition marketing since the beginning, which has allowed us to control the monster that is marketing costs. Word of mouth appears to be getting much stronger for us as well.
Q: How have perceptions about you changed from startup to now from manufacturers?
A: Manufacturers were very skeptical in the beginning. We feel great gratitude to companies like Voile, Alf, Atomic, and Kelty who believed in us early on and allowed us to succeed. Supporting the small businessperson is a bold move for established companies.
There were plenty of funded dot-coms that were coming at manufacturers with huge offers, e.g. the Fogdog and Nike partnership. Nike ended up with an ownership position in Fogdog in exchange for exclusive Internet distribution. So an unfunded company in Heber, Utah, didn't have a lot of traction.
Initially many companies assumed the worst -- that we would be sub-retail mail-order merchants. It's taken years of careful work building our brand before we were able to convince people that we are a legitimate outlet with trained sales people who understand the gear, rigorous MAP pricing , full warehousing and deep support of entire lines.
It's also helped that we have a fanatical belief in paying all of our bills on time or earlier.
In many instances an Internet company can provide deeper information and better inventory than a small specialty store. We make every effort to communicate specialty store values on the Internet.
The nicest change we have seen over the last 18 months has been a slow shift from where we were chasing vendors to where they are approaching us. However we now have most of the lines that we considered crucial to have a complete footprint in the outdoor industry. We will be launching a slew of new lines in the fall including deeper support for alpine skiing and more complete winter outerwear. Gravity sports are also beginning to get really compelling.