Why Success Online Often Is in the Details
Staff Reporter of The Wall Street Journal.
The Wall Street Journal Online
John Turton has just walked through the doorway
of a small record shop in Oakland, Calif., when his eyes lock on a target.
There, on the wall above the cash register, is a copy of the Grateful Dead's
self-titled debut album.
Mr. Turton takes it down, handling and
examining the collectible like a delicate piece of fine china. It is priced at
$50. If it is in mint condition, he could sell it for $120 on his Web site. But
as he gently slides the album from its cover, he finds a small imperfection on
the vinyl playing surface, a tiny bubble on an inner track. "That's a shame," he
sighs. "It makes it not worth it for me. It's a nice little record. But that's
going to drive somebody nuts to hear a big thud" every time the phonograph
stylus passes over the flawed spot.
Later, the man sitting behind the cash register
tries to assure the discerning shopper that the blemish is probably inaudible.
But Mr. Turton isn't buying. "The guys I sell to are picky, picky, picky," he
explains. "And I'm picky for them."
That sort of personal attention to detail has
become a hallmark of Mr. Turton's Web site, Audiophileusa.com, for its 2,000
regular customers. It helps explain how he and his wife, Marianne, took in
nearly $500,000 in sales last year as co-owners of Audiophile International,
whose sole business is the Web site.
But customer satisfaction is only one aspect of
their success. The Turtons are constantly dealing with problems of time
management, inventory control, pricing, shipping and marketing, all of which
present themselves in ways particular to the running of a mom-and-pop Internet
Experts say this is no small feat for Web
entrepreneurs. "The biggest challenge is the constant change that they're having
to deal with," says Paul Edwards, an author and expert on home-based businesses.
"You're constantly having to keep up with the changing nature of the Web --
changes in distribution models. Who buys what? Who your competition is, and will
they be able to offer what you do in a way that undersells you or improves upon
what it is you are doing? You're constantly having to stay ahead of the curve."
Mr. Edwards says statistics from the Small
Business Administration show how much tougher it is for home-based businesses in
the Web era. Today, a little more than 15% of such businesses close each year,
including Internet and traditional enterprises. That contrasts with the late
1980s and early 1990s -- before electronic commerce took off -- when 5% of such
businesses closed each year.
The challenge for the Turtons is to stay far
enough ahead of the curve to stand out amid a smorgasbord of similar Web sites
available to any audiophile with a browser. Among the many options available to
the Turtons' potential customers is eBay Inc.'s massive online marketplace,
where on any given day dozens of sellers might post as many as 175,000 vinyl
albums for sale. To compete, the Turtons hustle nonstop from the basement of
their suburban home outside Sacramento, Calif., to serve all those "picky,
picky, picky" customers.
The Toughest Part
The couple runs Audiophile International with
the help of only one employee. Their 1,700-square-foot basement is packed with
an estimated 30,000 vinyl albums and about 1,500 compact discs. As the Turtons
and their assistant work away at their respective computer terminals one recent
day, the challenges become clear for a family running an international, 24-hour
business out of their home.
Consider that the Turtons gave their older son
the master bedroom in the living quarters upstairs, so that they could sleep in
a bedroom closer to the basement staircase. "It does help being able to creep
downstairs without disturbing anyone," says Mr. Turton. "Not being able to get
it out of your mind" is the toughest part of running such a business, he says.
"It's hard to divorce yourself from it. You wake up at five in the morning, and
it's too easy to come down and start work."
Indeed, there is plenty to be done. Mr. Turton
estimates as many as 20,000 of the albums in the basement have yet to be entered
into his Web site's database. That means his customers don't even know about --
and so the Turtons are unlikely to sell -- about two-thirds of their inventory.
"It'll probably be the middle of the year," Mr. Turton predicts, "before I get
close" to cataloging the rest of the inventory.
Each month, he assembles a list of his newest
offerings. He figures it takes him five to seven days to type in entries for the
600 to 800 albums he will feature.
Why not let someone else do it? Again, it comes
down to the business approach that gives the Turtons their edge on the fiercely
competitive Internet: personal attention to detail and product knowledge. For
every album on the Audiophileusa.com Web site, Mr. Turton either knows something
about the music or will take the time to listen to it before he writes a short
note about it for the site.
Pricing It Right
Mr. Turton also feels he is the only one who
can accurately price the albums. He can charge more than the local record shops,
in part because he can reach more dedicated audiophiles, who are willing to pay
for the selection and convenience offered by the Internet. But online pricing
also is tricky, because it is more transparent -- competitors' prices are
available in an instant. The Turtons keep an edge there by virtue of their track
record of more than seven years of quality and service, built largely on Mr.
Turton's attention to detail.
"It's so easy to miss something," he says. He
is always looking for something that will increase the value -- and, so, the
price -- of the albums he is putting up for sale. For example, notations in the
vinyl that surrounds the album label, where no music is engraved, might include
the initials of a well-known recording engineer or the mark of a highly
respected album-pressing plant, or indicate an early pressing, which usually
means finer sound and less noise on the album.
Mr. Turton usually is familiar with each of the
albums and, as he puts it, "their subtleties," because he goes out and finds
most of them himself. He estimates he makes 20 shopping trips a year to the many
used-record stores around San Francisco and Los Angeles, and to a handful of
major swap meets as far away as Austin, Texas.
During a recent shopping trip in the San
Francisco area, Mr. Turton took along a reporter and a friend who sometimes
helps him shop, Roy Sharpe, a retired software salesman who makes some cash
buying albums and reselling them on eBay. The crew hit five stores, shopping for
more than six hours, and Mr. Turton ended up spending about $775 on about six
dozen albums. The day's business lunch consisted of corn chips and soft drinks
in the car between stops.
Among their hot finds that day were a
mint-condition copy of Miles Davis and John Coltrane's "Live in Stockholm 1960,"
for $17.95, which Mr. Turton expects to sell for $36, and a special audiophile
pressing of Nirvana's "Nevermind," in mint condition for $30. "Ooh. Ooh. That's
really made my day," Mr. Turton says of the Nirvana album, which he figures he
can resell for "at least $100, maybe more."
While Mr. Turton, 48 years old, does the
shopping and pricing, Mrs. Turton, 46, focuses on the shipping. A typical day
has her up at 6 a.m., taking the two Turton boys, 13 and 8, to school. Then she
heads home to pull orders -- about 12 to 15 each day -- pack them and head out
to the post office by 1:30 p.m. After that, she picks up the boys from school,
and then is back downstairs at corporate headquarters by midafternoon.
Between it all, there are typical house chores
and meal preparation. "We don't have a cleaning lady," says Mrs. Turton. "It's
us two. And it's go, go, go, until we go to bed." Then again, she points out, if
one of the boys is sick and needs to stay home from school, mom and dad can both
be home to care for him.
In dealing with the intrusions of daily life,
it's an advantage that Audiophile International is a Web enterprise and not a
traditional mail-order business. "We can fill orders when time allows, rather
than diving for the phone all day," Mr. Turton says.
Still, there is little time to listen to their
own music collection, which Mr. Turton says he has shrunk to its current 2,000
albums from 6,000 about a decade ago. He has sold nearly all of those albums,
and has all but sworn off collecting as an occupational hazard. "If you
collect," he says, "you could wreck your business."
Looking ahead, the couple believes that
Audiophile International's recipe for success will continue to center on Mr.
Turton's personal approach to shopping, and then his and Mrs. Turton's careful
wrapping and packing of orders, the key to limiting returns of damaged products.
Packaging is a particularly vulnerable area for a business serving a niche
market almost entirely by shipping, a common profile for small Internet
"Packing is so important," says Mrs. Turton.
"For many of these albums, there's no replacement. If I don't pack it well,
what's the point, then?" Albums are placed inside a plastic bag that is wound
tightly with tape, then covered with padding and retaped before being placed in
a reinforced shipping box; plastic-foam packing peanuts fill any excess space.
Eventually, the Turtons hope to find a paper company to make them a custom box.
Loyalty and Growth
The care the Turtons take is the main reason
Charles Smith of Jackson, Miss., estimates he spends $3,500 to $4,000 each year
on albums from Audiophile International, mostly Beatles, Rolling Stones and
other British Invasion music from the 1960s.
"He's always got a lot of good stuff I'm
looking for," says Mr. Smith, an assistant professor of history and political
science at Mississippi College. What's more, he says, "You can be sure it's
really good quality."
Since Mr. Smith began buying from the Turtons
in the fall of 1997, he has returned only one record, he says -- Joni Mitchell's
self-titled debut album, because it had too much surface noise. The Turtons
refunded his money promptly. Several months later, Mr. Turton tracked down a
quieter copy and shipped it off to Mississippi.
Loyal customers like Mr. Smith had helped
Audiophile International's sales grow between 25% and 50% annually since the Web
site went up in October 1994, a time, Mr. Turton remembers, "when the general
public wasn't really aware of what Web sites were. It was a very small thing."
Last year was the first that sales didn't grow.
As was the case with many businesses last year, "September was like a month of
nothing," Mr. Turton says of the effects of the Sept. 11 terrorist attacks in
the U.S. And business never really recovered throughout the rest of the year.
Partly as a result of those disappointing sales
figures, and because the Web site's design hadn't been changed since its 1994
launch, the Turtons decided late last year to invest in a redesign.
Mr. Turton hired Webscape Internet Management Ltd. (now Neale Internet)
, based in Vancouver, British Columbia, for a job that ultimately will cost
his company $8,000 to $10,000. While it's a major expense, it is a far cry from
the $25,000 to $30,000 estimates he got from Web designers in the San Francisco
area. "It's a real crapshoot out there with Web site work," he says. "You've got
to have that combination of good work and a price you can afford."
The old site was really nothing more than long
lists of albums, with little artwork. "The whole thing was a straggling mess,"
Mr. Turton says.
The changes are dramatic. The home page, which
changes daily, now features nine albums, all pictured. In addition, customers
can search the database by artist, type of music, label and category (new or
used album, compact disc, etc.). The site also allows customers for the first
time to place selected items in a virtual shopping cart, like most modern
The Turtons have noticed an enthusiastic
response to the new site, from new customers as well as regulars, and expect
sales this year to easily exceed last year's total of nearly $500,000.
Even so, Mr. Smith, the customer from
Mississippi, says what would really be helpful is if Audiophileusa.com could be
updated more often than monthly. He suggests a "What's New" listing, with the
most current additions to the inventory, similar to that offered by one of Mr.
Turton's competitors, Redtrumpet.com.
Of course, that is easier said than done,
considering the massive backlog of inventory Audiophile International has stored
away in the basement. But that won't deter Mr. Turton from his efforts to find
even more mint-condition gems and collectibles for his demanding customers. And
those little pats on the back he gets along the way do help.
"Glad to see you're buying vinyl," a young man
tells Mr. Turton as he watches him write a $180.43 check in a Berkeley, Calif.,
shop for a tall stack of albums. "It has so much more personality and
"And," Mr. Turton responds, "It sounds so much