Practical Ecommerce

Netshops.com Finds Its Niche

Company Name: NetShops

Established: 1999

Revenue: About $62 million

Products: Niche specialty stores

Shopping Cart: Custom

Quote: “We saw the opportunity to acquire and build sites…around a specific need.”

NetShops launched its first site in 2001 and in the past six years has amassed a collection of more than 150 niche sites, each specializing in distinctive areas such as hammocks, dartboards, toddler beds and jewelry boxes.

Its 2,630.8 percent growth over a three-year period landed it No. 13 on Inc. magazine’s fastest growing companies in America in 2006, with gross sales around $62 million. The company is based in Omaha, Neb., and CEO and co-founder Doug Nielsen said NetShops will continue to use its Midwestern sensibilities of “honesty and hard work” to fuel its ongoing growth plans around targeted niches. The company employs more than 300 people, and all signs are that it’s a pretty decent place to work — it was named one of the top five places to work in Omaha in 2005 and also recently received the “2007 Excellence in Business” award from the Greater Omaha Chamber of Commerce.

On the web, NetShops has made a name for itself by taking niche marketing and niche selling to new levels of success. A significant part of the company’s success is anchored in its commitment to host keyword URLs such as Hammocks.com for its hammock site, Adirondackchairs.com for its site selling Adirondack chairs and Desklamps.com that sells, well, you guessed it.

PeC: You’ve made a conscious choice to center a business around specialty shops with so-called intuitive, “keyword URLs” since the launch of Hammocks.com. Why is that, and how does that impact your overall marketing efforts?
NetShops: Given the growth of search as the primary way to locate businesses, products, etc., we saw the opportunity to acquire and build sites not around a specific customer demographic, but around a specific need (such as hammocks) that wasn’t being met by traditional retailers. The main benefits are the added credibility to our store and type-in, direct traffic.

PeC: How has NetShops product offerings evolved since that launch?
NetShops: It launched in 1999 with one site, Hammocks.com. After the initial success of Hammocks.com, we began to research other niche outdoor and indoor home categories. It has really evolved into a wide breadth of products outside of the home category. We have also began acquiring like minded companies in new categories like Binoculars.com, Telescopes.com and Radarbusters.com

PeC: Why create an “online mall” concept of specialty retailers? What was the original vision?
NetShops: We don’t consider ourselves an online mall, so to speak. The original vision was to provide consumers with the most complete selection of each individual product (i.e., hammocks, barstools, etc.). The online mall approach grew into fruition as our company and categories grew.

PeC: Can your products be found at online locations other than your website — marketplaces like eBay and Amazon, as well as shopping comparison sites?
NetShops: Yes, we actively market our products through the major comparison shopping networks, eBay, Amazon and Shop.com.

PeC: How do you market NetShops?
NetShops: We market NetShops stores via the major online marketing channels such as pay-per-click advertising, affiliates, eBay and Amazon. We utilize email marketing and other direct marketing mediums for our customer base. We do market both.

PeC: How does your company distinguish itself from other online malls?
NetShops: We don’t like to consider ourselves an online mall, but our distinguishing factors are superior customer service, product selection and competitive pricing. We also are extremely focused on making the shopping experience as user centric as possible. We are constantly evaluating new technologies, etc.

PeC: How else do you find products to sell?
NetShops: We employ all sources, including attending trade shows and product research.

PeC: How do you handle fulfillment of such a diverse operation?
NetShops: We have and continue to make investments into our back-end order management infrastructure that allow us to streamline our fulfillment operation. We do inventory items in our warehouse facility but also utilize drop shipping.

PeC: Is search engine optimization a priority for your site? If so, how do you approach it, and what has been the result?
NetShops: Yes, we have a team dedicated to SEO and currently rank first organically for the main keywords on more than one-third of our sites.

PeC: To what do you attribute the extraordinary growth NetShops has had during the past few years?
NetShops: The evolution of the Internet and the way people are looking for and purchasing products combined with a driven, focused and forward thinking team

PeC: With more than 100 specialty shops under the umbrella, is the company growing toward a particular number of stores? What’s the future for NetShops?
NetShops: We have no cap on where we will be growing. Our goal is to expand into new categories where it makes sense.

PeC: What do you look for when choosing to operate, acquire or launch a new site?
NetShops: We have a proprietary evaluation model that factors in several hundred data points in deciding what categories we choose to enter.

PeC: As a significant “player” in the ecommerce space, are there trends you see around the corner that all ecommerce owners should be watching?
NetShops: The growth of social networking and alternative media marketing avenues. Everything will continue to evolve, and it will be a matter of staying in front of the wave.

Practical Ecommerce

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