Jan 7, 2012

Furniture Business (Story)

SexyFurnishings.com

Sexy still sells. Just ask brothers and business partners Michael and Ronald Lipka, who launched SexyFurnishings.com in April 2001 - and kissed their decidedly un-sexy backgrounds in accounting and engineering goodbye. The secret, they found, was being able to sell sexy at an affordable price. It all started in 2000 when Michael Lipka happened upon a crowd gathered outside a Boston furniture store. "It was this great big chair shaped just like a high-heeled shoe, and it was sitting out in front of the store for people to look at and sit in," recalls Lipka. "It was a typical dark and dreary Boston day with not that many people walking around, but there were still dozens of people standing around this chair." But Michael also noticed that all of the potential customers were making themselves scarce after reading the chair's price tag, which was over $1,000. "This clearly was a great piece of furniture, but the main problem people had with it was the price," he says. Business Model: Drop Shipping
A few months and many hours of market research later, which included a handful of trips to furniture factories, the brothers Lipka (Ronald is 29, Michael 28) knew they were on to a viable business model: Internet-only furniture retailing using drop-shipping direct from manufacturers, which would keep overhead down and prices low. Oh - and make sure that furniture had some sex appeal, too. "We knew the demand was there," says Michael Lipka, but "it was a risk we were taking that people would be willing to buy these products online."


eBiz Profile: SexyFurnishings.com
Sole Brothers: Ronald and Michael Lipka founded SexyFurnishings.com, which thrives on a drop-shipping business model.

The risk has clearly paid off. Sales of their 500+ home products, which include everything from sofas and tables to ottomans and clocks, have increased 16-fold in four years. And with the expertise of their aunt, Ronda Prokop, an interior design veteran who joined as business partner 18 months in, SexyFurnishings.com doesn't just sell to homeowners — they sell to design-minded corporate clients like the MGM Grand, Pennsylvania State University, the Subway sandwich franchise, and even the federal government (the last of which is somehow even un-sexier than accounting and engineering). The company drop-ships from factories in five geographically diverse states — California, New York, Illinois, Georgia and North Carolina — for 90 percent of their sales, with the remaining products shipped directly from their own California warehouse. "Having a factory that is willing to work and grow with you is important," says Michael Lipka, who relied on trade shows, industry reputation and word-of-mouth to pick his suppliers. "A lot of our customers are looking for answers to their questions immediately, and if we can't answer them right away, we need to be able to get any requested information from our factories as soon as possible." The company also uses Live Chat from Live Person to handle customer inquiries.

eBiz Profile: SexyFurnishings.com
Everthing's A-OK: Top selling seat.

Stylish chairs are most of their current top-sellers, such as their Jacobsen-style Egg and Swan Chairs, the Collage Chair, and the A-OK Chair. Their customers skew female, ages 30 to 50, and over 10,000 people are on the company's e-mail list. Unique site visitor numbers hover at around 20,000 per month. Pay-Per-Click Not Paying Off
Attracting customers certainly hasn't been owed to pay-per-click marketing. "We used to spend several thousand dollars a month" on such programs, says Lipka, "but found those to be a total waste of money." Instead, they hand-coded the website themselves for optimal search engine appearances, and say the vast majority of their site visits comes from "organic, unpaid listings." Nearly all payments are handled via credit card, with Authorize.net; PayPal, personal checks and wire transfers account for a scant few. The family company uses Jumpline as their hosting provider. "We liked the pricing structure they had and the amount of storage space they provided at the time," says Michael Lipka, though he admits that newer companies "probably provide just as good a service as they do." That said, Jumpline's new Web-based e-mail functions are keeping the Lipkas as customers. Switching Storefronts: More Flexibility
But Lipka is "not happy at all" with his bCentral storefront software, and says fixing that is their biggest challenge. "The software doesn't allow the customer to choose the product options (color, size, etc.) prior to adding it to the [shopping] cart," he says candidly. And "the cart doesn't allow you to show the customer any related product info after they have added the product." SexyFurnishings.com is planning a transition to Yahoo!'s storefront software early this year, though they're less than pleased at the associated per-transaction fees. They also want to automate more of their Web design, to spend less time on page coding and "focus more on expanding our product offering." Even with those challenges ahead, the founders haven't forgotten where their inspiration came from — remember that high-heel shoe chair in Boston that cost over $1,000? Not only can you customize it by choosing from 14 different colors for the trim, insole and overall shoe hue, it sells on their Web site for $199.

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