Running a single ecommerce site takes skill and hard work, but entrepreneur Brad Likens runs 24 ecommerce sites. Likens is co-owner of Best Service Stores, and the company has grown to over $20 million in annual sales in just four years. Best Service Stores does all of this from its home base in Lenexa, Kan., and Likens joined us recently to talk about it.
Practical eCommerce: Tell us about Best Service Stores and how you got into ecommerce.
Brad Likens: “I was in the real estate servicing industry, servicing all kinds of different real estate and mortgage companies. We wanted to diversify a little bit and get into some different markets and we found a small website that was for sale. We saw some success, and then we acquired several more websites, and also started some of our own.
“The first one we bought was Thejunglestore.com in about 2006. And then Arsa Toys and Hobbywarehouse.com. Since then, we’ve opened up more than 24 websites.”
PeC: Do you sell retail products on all 24 sites?
Likens: “Yes. We also have approximately six or seven sites that are not ecommerce. A lot of those are social marketing sites, or just information sites that deal with marketing for ecommerce, and those will feed towards our ecommerce sites.”
PeC: Why don’t you run all of your activities on a single website?
Likens: “We look at the product lines that we have, and we try to do both niche sites and what I call supermarket sites. Ten years down the road, we’d like to have both be successful, but in today’s marketplace, it’s tough to determine which will have more success. We’re not sure what direction the market is going to take, but we’re prepared for either direction.”
PeC: Do you fulfill all the orders yourselves?
Likens: “Yes. We have two warehouses that we fulfill orders from. We use a lot of integrated shipping systems and we’re trying to keep up with all the latest advancements and making the shipping easy.
“We do drop ship on occasion, but we prefer to stock the items ourselves. Most of the times we drop ship, it’s more trying out a new product line. If there’s success, then we’ll try to bring it in-house.
“As far as keeping track of the inventories, it is tough running a lot of different stores. We essentially have nine ecommerce backend databases. So, we have nine different stocking systems. We try to use the same backend platform across all systems, so if we acquire new site that is in Volusion or NetSuite or Yahoo! or iCongo, we’ll try to work out an integration into our backend system. Right now we’re using NetSuite.”
PeC: Why did you pick NetSuite?
Likens: “One of the first sites that we purchased was in NetSuite, and as we added more sites, we learned more about different systems. They all have pluses and minuses. NetSuite has a very strong accounting and financial reporting backend, and since we’re using multiple front-ends to host the actual sites themselves, we wanted to make sure that our backend (our inventory controls and our accounting systems and our financial reporting) was really robust.”
PeC: Do all of your sites and your databases automatically feed into a single accounting system with NetSuite?
Likens: “Yes, they do. We have a team of four or five in-house programmers that build XML and real-time interfaces that feed directly into our NetSuite system. Once an order is placed, all that data is sent directly through to NetSuite and then all of the customer service and inventory levels, and accounting and finance reporting is done through NetSuite.”
PeC: How do you market your sites?
Likens: “We try to use all different types of marketing strategies. We do a lot of paid marketing through Google AdWords and Yahoo!. You can see the immediate results. You can turn on that paid marketing and then look a couple of hours later and see if that was successful or not. [Pay-per-click] is also the most expensive kind of marketing. So, over time, we might start with some paid marketing, build up our organic results, and build a big social network that feeds into our sites as well.
“From there, we might go on to some of the shopping comparison engines like Google Base, NexTag, Shopzilla, PriceGrabber. We use a variety of strategies when we go to the shopping comparison engines as well. We’ve used third-party services, kind of distribution feeds, such as SingleFeed and MerchantAdvantage to some of the more complex packages like ChannelAdvisor and Mercent to manage those shopping comparison sites.”
PeC: Do you manage the pay-per-click and SEO work in-house?
Likens: “Yes. I know a lot of companies have a lot of success with outsourcing paid marketing through AdWords, we just have not gotten to that point. We haven’t tried that yet.”
PeC: How many keywords are you running at any one time on a paid search program?
Likens: “I would guess that the number is an excess of 200,000 keywords at any given time.”
PeC: What is your company’s total annual gross revenue, and how many SKUs are on your sites?
Likens: “At any given point, we might have 50,000 to 60,000 SKUs in stock. During the holiday seasons, that number increases. This year, I would estimate our gross revenue to be $20 to $25 million. Next year, that could be as much as $40 million.”
PeC: What advice would you offer to small ecommerce merchants?
Likens: “I think sometimes people might get into ecommerce and think that it is going to be a slam dunk, but it is a lot of work. The Internet world is so large when it comes down to all the different types of marketing and the types of products out there. It’s a very big world. So, you need to find out what you have that really resonates with your customers and really become experts at selling that product. And, of course, putting the customers first, knowing what customers want and knowing how to give that to them as easily as possible, and providing the best service you can for that customer.
“It’s easy to get lost in the Internet world because there are so many different ways to go. Starting small, finding something that works for you, really honing your skills to provide that one service, and then growing from there, I think is a good way to get started.”