Dave Taylor has been involved with the online world since 1980 and
is recognized globally as an expert on both technical and business
issues. He has been published over a thousand times, launched four Internet-related
startup companies, has written twenty business and technical books and holds both an MBA and MS Ed.
He's a columnist for the Boulder Daily Camera and
Linux Journal and frequently appears
in other publications both online and in print.
Additionally, Dave maintains four weblogs:
The Business Blog at Intuitive.com,
Ask Dave Taylor,
Dave On Film,
Based in beautiful Boulder, Colorado, Dave is an award-winning speaker, sought after conference and workshop participant and
frequent guest on radio and podcast programs, as well as active member of
his community and busy single father to three children.
StickerGiant: Profiting from selling a completely commoditized product line
The path of innovation inevitably seems to end up in the commoditized business graveyard. Time and again smart, nimble companies invent new technologies or manufacturing processes, just to standardize them, inspire knock-offs and direct competitors and ultimately find that their unique differentiator in the marketplace has evolved into a commodity and that customers make their selection based on price or availability, not manufacturer, brand or logo.
Indeed, I believe that the challenge of commoditization is so great that I just finished co-authoring an important new business book on just this topic, coming soon to a bookstore near you. It's an important topic, and many of the people reading this very blog are doubtless threatened by outsourcing, the globalization of the modern workforce and similar changes to the business ecosystem.
That's why I was quite intrigued when I had a chance to sit down with John Fischer, head of StickerGiant, and talk about how he's identified a pure commodity business and turned the commodity nature of the sticker space into an advantage, creating the largest sticker reseller in the world.
Q: Roughly how many stickers do you sell every year, John, and how big is your company?
A: We ship 40,000 orders or so a year, and sell just under a million dollars worth of stickers a year, and, yes, that's a lot of stickers!
Q: The average sticker on your site is about $2.00. Surely there's not much profit to be had in individual stickers? Given that, how are you profitable?
A: We make money on every order, count our pennies and bootstrap everything, this is not a business that will make me rich, but it is better than working for "the man".
Q: My understanding of the sticker marketplace is that it's characterized by lots and lots of small manufacturers or printers, each of which have insufficient breadth of offerings to appeal to a mass market. Is that how you see it, and if so, how many producers do you represent?
A: We have hundreds of suppliers from all over the world, many of our suppliers send us our weekly orders and they stink like that hippy juice, I think its called patchouli, some vendors have one sticker, some are working out of their basements and some have thousands of SKUs.
Q: Seems like there are lots of legal issues with stickers, mostly around whether the manufacturer really has the rights to the images used. For example, I've seen lots of Betty Page stickers that are far beyond what I imagine Ms. Page would approve. Do you have any issues or problems in this regard?
A: I try to respect intellectual property and take every claim of copyright infringement seriously. I have partnered with a international intellectual property firm to serve as a "early warning" system for possible infringers. As far as Betty Page, I have worked directly with her agents to identify and catch infringers. Often perceived infringement is not infringement at all,
parody for example is protected speech.
Q: Do you have any advice to entrepreneurs who want to compete in a commoditized marketplace like your own?
A: Sell something with a higher price point, like Faberge Eggs, Stradivarius Violins, or Porn; that would be easier and a more profitable space to go into.
Q: Let's wrap this up, John. Who are your customers and what final thoughts do you want to leave us with?
A: People assume that sticker buyers are skate punks, or college kids, when in reality our customers consist of anybody on the Internet with a credit card or paypal account. I capture very few "seekers" and feel that the majority of my customers fall into the "Internet time wasters" category, people aimlessly wandering the hills and valleys of the Internet.
Stickers are funny, provocative, obscene, truthful, controversial, confusing, beautiful, erotic, appealing, and on and on, I am selling language, StickerGiant is a clearing house for the First Amendment, and the human experience at large.
Very interesting, John. Thanks for sharing this insight with us, and, dear reader, I encourage you to pop over to John's StickerGiant site and check out some of the very amusing stickers -- and bumper stickers he's selling.
Posted by Dave Taylor at September 29, 2005 4:10 PM
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