Put the Web to Work (key move)

Name: Robert Wolfe
Company: Moosejaw Inc.

Be careful what you joke about — it may turn into your livelihood. As backpacking guides after college, Robert Wolfe and a friend quipped about how they kept sending all their customers to a single store for their gear, and why can’t we get a piece of that action?

And now, 13 years later, Robert’s own outdoor-supply retailing operation, Moosejaw Inc., has become a rugged success.

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“It’s not like we put together 100 spread sheets right away to see if it was feasible,” recalls Robert. “We laughed about it. When we said it, we didn’t think we’d do it.”

But Robert was an underemployed political-science graduate, so what else was he going to do to make money?

At first, Robert went the conventional retail route, opening a 2,200-square-foot store in a backwater called Keego Harbor, Michigan, with money lent by suppliers. But he sustained lots of initial lessons from the school of hard knocks.

First, his backpacking friend and partner sold out to Robert because he couldn’t stand retailing. And as he opened a second store in East Lansing, Michigan, and then a total of six stores in Michigan and Illinois, Robert ill-advisedly tried to buck the realities of retailing.

“I thought it would be cool to have Store A, B and C be different from one another,” he says. “But it’s not cool. It makes them difficult to open and operate. It means you can’t use a standardized IT [Information Technology] system from Oracle or IBM, so you have to build them internally. It wasn’t cookie-cutter enough. I just didn’t realize that until two years ago.”

And actually, Moosejaw was about to enjoy its biggest expansion—but not because of anything Robert did or didn’t do in his stores. In the mid-‘90s, Moosejaw jumped onto the web, and today his online business accounts for nearly two-thirds of Robert’s $10 million in annual sales.

Robert’s Key Move: Putting the Web to Work.

Robert knew diddly about e-tailing when he put Moosejaw online. But he was savvy enough to learn quickly that the Internet was going to be his route to unimaginable growth.

“Two guys who worked in my East Lansing store were building web sites and wanted me to become their first client,” Robert recalls. “And at that time, the Internet was just a bonus to the business as opposed to being a key part of the business. If we had one sale from the web, we got really excited about it. We weren’t spending time plotting Internet strategy.”

In fact, the way Robert processed online orders in the mid-‘90s was laughably archaic: He brought his laptop with him as he drove from store to store, typed in all orders himself and then re-entered those orders on the stores’ retail system. “I took my Visa machine and my 800 number home with me every night, literally,” he recalls.

Then Robert’s brother, Jeffrey, joined the company in 1997 with the purpose of making Moosejaw.com a serious player in outdoor gear.

And that’s exactly what has happened: 55% of the company’s total sales last year occurred online, a figure that Robert expects to leap to 65% this year. Moosejaw now is selling its stuff worldwide instead of at just a handful of shops in two Midwestern states. “And our online operating profit is much greater,” he says.

Robert and Jeffrey have used several gambits to succeed online. For one thing, they’ve emphasized developing personal relationships with suppliers. As a result, says Robert, “If you click on ‘Where to Buy’ on 90% of our supplier-manufacturers’ own sites, Moosejaw comes up. We don’t meet the sales-volume requirements that a lot of them have for that privilege, but we’re there because we’ve had great relationships with them going back several years.”

The Wolfes also have learned to dovetail the Internet and brick-and-mortar operations to leverage the huge physical inventories that Moosejaw holds at its stores. They do that by fulfilling online orders from their stores’ individual stockpiles, allowing the stores as well as the Internet business to benefit. Here’s how:

“We take as much as 30% of our Internet sales and spread the fulfillment of those orders among our six stores instead of our warehouse,” Robert explains. “That allows one store to carry, say, $200,000 worth of inventory rather than $150,000. And that makes a huge visual and perceptual difference to our customers because it makes for a packed shop, which they like. It’s also a great pitch to our suppliers. I get double exposure for those goods – in the store and online – and it increases sales immensely.”

Most important of all, Robert says, is that the Internet is the best way to communicate that the Moosejaw brand is about fun and humor as well as about selling the latest high-tech, foolproof gear to serious denizens of the outdoors.

Last Christmas, for example, Moosejaw had an “All Pink Sale,” and that message was all over its web site. And for Mother’s Day, customers got 15% off any purchase of a Moosejaw-branded item – as well as an “I Like My Mom” sticker.

“It’s a lot easier to communicate that kind of attitude online than in the stores,” Robert says. “If I want to do a quirky sale online, I just e-mail one of our online guys and say, ‘Do it.’ But with retail, I’ve got to have six managers do it, and I end up with a lot more expense and a lot less control.”

Robert’s Bonus Insight:

If vanilla vendors don’t have the software you need to run your business, develop your own. That’s what Moosejaw had to do with its retail-operations software. And the company got so good at this sidelight that it’s now about to sell the package that it developed to other small retailers to help them run their own chains.

  ABOUT THE AUTHOR:
Rich Sloan

Rich Sloan is chief startupologist and co-founder of StartupNation and host of StartupNation podcasts. He is also co-author of the acclaimed how-to book, StartupNation: America's Leading Entrepreneurial Experts Reveal the Secrets to Building a Blockbuster Business. Rich encourages you to [...]

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