It was supposed to be a quiet, part-time business to give a couple of prospective retirees something to do. Fifteen years later, Bill Kenerson and Deb Venman have created a beehive of activity creating bow ties, ascots, cummerbunds, scarves and pocket squares.
What started as a mailing of 3,500 catalogs (actually a single-sheet flyer) in 1993 has grown into a dynamic multichannel sales operation. Kenerson and Venman now mail about 500,000 catalogs annually. and they manage a company generating about $2 million annually — about 40 percent of those sales at the company’s website, Beautiesltd.com
Bow tie wearers are certainly a niche market. There are about 175 million ties sold annually in the U.S., and only 4 percent are bow ties.
Although the business started in virtual mode with sewing and fulfillment outsourced, it grew quickly to a home-based endeavor. When the bedrooms and garage couldn’t hold one more scrap of fabric or one more bow tie, the couple built a manufacturing facility in their hometown. From Middlebury — a small, rural community in upstate Vermont — a success story blossomed around butterfly-shaped neckware.
PeC: How did you start getting the word out about your bow tie business in 1993?
Deb: The thing is, we were not naive enough to think we could do very much with a mailing list of 3,500 names. Right from the beginning, we advertised in The New Yorker.
We advertised occasionally in The Wall Street Journal. We experimented with different kinds of printed media. We did Ivy League magazines. We did flight magazines. We did branch out into various things of that nature. Word-of-mouth was, far and away, the most successful means of adding names to our mailing list. That has changed only slightly in that it is now sort of a combination of the old-fashioned word-of-mouth and what we call e-word-of-mouth — the Internet word-of-mouth.
PeC: Why did you launch a website?
Bill: We did not start out to add ecommerce as a sales channel. We did it as another way to add customer names, and it was to get people to request our catalog.
PeC: How did you make the shift to a site that sold products?
Bill: One of our customer’s wives who was working in website design, designed a website for us without our knowledge. Then she called us and said, “Why don’t you take a look at this website and see if it’s something that works for you?” We were pleased with what she had done, and that is how we got started with the website.
PeC: Beyond your own website, do you sell at other online locations?
Deb: We do have products on Amazon.com. We find that it is OK. It certainly more than pays for itself, but it does not begin to compare to selling from our own site. So we have not pursued that element as vigorously as we might have.
PeC: Is it a challenge to locate potential customers who are interested in bow ties?
Bill: One thing you have to understand [is that] this is a very niche business. The bow tie wearers of the world are few and far between. So, we had problems reaching them when we started with the print ads. Our whole goal is to find all the bow tie wearers of the world and get them on our mailing list. The problem is finding them, and what vehicle we use to find them. The print ads were doing very well, but now we have realized that people have kind of stopped reading magazines, and we have got to branch into a more aggressive use of the Internet as a way of attracting these customers.
PeC: Do you operate a call center to serve your catalog and online customers?
Deb: Yes. We have that right next door. By next door, I mean in the next room. Our call center has three stations permanently set up plus Internet access station. We have homegrown hours. You will reach a live operator from 8 a.m. until 6 p.m., five days a week with the exception of the Christmas season when we open our call center from 10 a.m. to 4 p.m. on Saturday. Other than that, when you call in, you will get a good, old-fashioned answering machine.
PeC: How do you go about promoting your estore?
Deb: A couple of different ways. One thing, we do use the website as a support for the print catalog, and vice versa. I do not know which is currently supporting which, but any time we send out the catalog, we send out an email concurrently that, in effect, tells these customers who have requested it, a new catalog is on the way. We also do pay-per-click. We do it on a year-round basis. We have a list of keywords we bid for. We focus more attention to that area probably for the last three months of the year, but we do it on a year-round basis. We experiment with different kinds of wording to see which approaches lead to sales. Obviously, there is a limited utility in having people go to your site if they are not going to develop into buyers — preferably, right there and then, but at least in the near future. So, we do track that. Print advertising has a much more difficult time right now reaching the kinds of audiences that we used to be able to take for granted. I know that different companies are finding different ways of dealing with that.
PeC: I see that you rank high on an organic search for “bow ties.” Is that something you focus on?
Deb: Yes. We tend to score really well on organic or natural searches. We do not insist on being number one in the paid searches, but we like not to be any lower than three if we can manage it. At Christmas, it gets to be very challenging towards the end of the year because you do have merchants who use pay-per-click who do not utilize it the rest of the year. Certainly, the cost of bidding for a term is more expensive in the last quarter than it is the rest of the year.
PeC: How does your company distinguish itself from others who sell bow ties?
Bill: I think there are a number of reasons. The first one is it is made in the U.S.A., made in Vermont. All of the products, bow tie products, cummerbund products, ascots and cravats and many of our four-in-hand ties are made right here. We concentrate hard on that. Quality is of utmost importance. Deb and I, early on, did all the inspection of all the products.
The other discriminator is that we know we offer the widest selection of bow tie fabrics anywhere in the world. There is not any question in our minds. We have looked at our competitors and we know our website and the number of new products we issue every year are second to none. If you are looking for a selection that is eclectic, we go from the exotic to the routine. We carry them. If you have seen our website, we have a lot of solid colors. We are always looking for new fabrics.
PeC: How do you ensure that the manufacturing quality remains high?
Bill: Every tie is inspected. I often go out and take a look at the ties that are hanging and ready to be packed. We sleeve every tie in plastic to maintain its quality so that it does not get dirty in stores, etc.
PeC: How has your company evolved since the early days?
Bill: We started as a virtual company basically. We had no employees. We farmed out our fulfillments. We farmed out the making of ties to a sewing house in a basement in New Haven. We would pick the ties up and carry them up to the fulfillment house. Then gradually we decided to start taking over these things. We took over the telephone answering, followed by the fulfillment. Then we built the building, but we knew we had to do it because we couldn’t continue to grow where we were. When we did that, we incorporated the people from Viviane’s Sewing Shop into Beau Ties Ltd. So, we are all one big happy family. Many of the sewers that we have have been with us right from the beginning and it works pretty well. The sewers are right across the wall from the phone room. If the phone room has questions about whether someone can make a cummerbund or about the fabric, they can get off the phone and walk across the way. We are very well-integrated at this point. All of our shipping is done here, packaging and shipping. So, it is completely integrated.
PeC: How many employees do you have now?
Bill: About 28.
PeC: I see on your site you also do custom work. Correct?
Deb: We have built a substantial custom business. We have more than 500 customers who do not want a tie that is 2-1/2 inches wide. They want one that is 2-3/4 or 2-1/8 or 2-7/8 inches wide. They maybe want a slightly longer curve or they want diamond-point ends. They send their drawing in to us of what they want. We charge them $20 to convert that into a pattern and thereafter, we charge them $5 per order, not for the tie, but to pull their pattern and make their tie to order.
We also have an amazing business, and Bill and I cannot get over this, where people send us their neckties, their long ties to be turned into bow ties because they are a favorite pattern or maybe they are a club pattern that you cannot get on the open market. We convert those ties into bow ties.
PeC: How have you made the successful transition from a classic manufacturing business with a catalog to a $2 million operation that also features a successful website?
Deb: I think the real reason that this business has been as successful as it has is that Bill has worn bow ties for all of his adult life. Those are the only ties he has ever worn. He does not own a long tie. He has a strong interest in it. I have a strong interest in it. I think that made a big difference because when we first started looking for fabrics, Bill had a very good eye for what would look good as a bow tie
Bill: We have had the ability to organize and deliver, but the real strength is in the demand that bow ties wearers have for the new fabrics and wide selections.
What is a high performer?
Five sites have built dynamic businesses in unique niches
Some people may define that purely based on gross revenue numbers or by having a 30 percent pretax profit margin. Others might say a high performer is a company that dominates its market sector or boasts a double-digit conversion rate.
We are all familiar with the success of Google, Yahoo!, eBay, Amazon and other sentinels of online commerce. However, rather than focus on the handful of ebusinesses you might read about in The Wall Street Journal on a regular basis, we felt it was important to showcase online businesses we see doing a terrific job in highly-targeted niche markets.
The five businesses we are showcasing will not be considered among the 10 highest-grossing revenue sites on the web. However, each of these has built a successful business. What one thing do they each have in common? The owners built their businesses around a passion. As you’ll see, those passions run the spectrum of diversity — they include bow ties, appliance parts, horse tack, organizational products and pet supplies.
Each of these sites generates millions of dollars — from $2 million to $125 million in gross revenues — and has stood the test of time by operating for the better part of a decade.
These high-performing sites have proven that online success isn’t reserved for businesses in Silicon Valley. From small-town Vermont to Southern California to rural Massachusetts to the woodlands of Northern Wisconsin, our five high performers show that success has no boundaries.
If there are central themes to each message from the featured businesses, they are: Success generally comes to people who love the products they sell; be the expert in your niche and, above all, take customer service very seriously.
The five sites we will showcase include: Drsfosterandsmith.com, Organize.com, Appliancepartspros.com, Doversaddlery.com and Beautiesltd.com.