Making A Move To E-Commerce Slowly, But Surely, Local Companies Branching Out To World Wide Web

The drumbeat of business activity heard across the land is the sound of companies cashing in on the e-commerce craze.

In Spokane and North Idaho, plenty of companies are shifting gears, embracing the challenge of doing direct sales on the World Wide Web.

But sound of e-commerce in this area is more of a muffled buzz, certainly not a roar.

Far more money leaves the region as area shoppers buy goods and services from other parts of the country and world than local dealers get in return.

Put another way: People here spend far more on Dell computers or books from Amazon.com than area merchants earn from customers buying local entertainment products, food items or outdoor equipment - to mention three areas covered by Spokane area e-commerce dealers.

But some Spokane and North Idaho sites now are waging more aggressive e-commerce campaigns.

Companies like The Nut Factory, Mountain Gear, Huppin’s Photo and Hi-Fi and Dave Smith Motors are generating almost as much revenue online as from in-store sales.

“Our annual increase in online sales is well into the triple digits,”’ said Dennis Medina, head of Mountain Gear’s online effort - www.mgear.com.

Mountain Gear, a privately owned outdoor equipment outfitter with a single retail store on North Division, went online in 1998. In the past year, sales have exploded, said Medina.

Catalog sales have been Mountain Gear’s largest source of revenue for five years. But online selling of tents, boots, skis and outdoor clothing will soon surpass catalog sales and be the company’s chief money stream, Medina said.

In Idaho, catalog company Coldwater Creek shifted its strategy last summer and launched its www.coldwatercreek.com site.

In less than three months the site accounted for $10 million in sales, about 11 percent of the company’s total third-quarter revenues.

That Coldwater Creek surge has grown into an e-commerce rush, said company officials.

Its online site now accounts for 17 percent of total sales - projected to generate about $64 million strictly from click purchases.

Another North Idaho e-commerce site, Netivation, sells no physical items. It provides political information to other companies or political campaigns. The Post Falls-based company is also expanding into the healthcare industry, trying to become an e-commerce broker for hospitals and health-care professionals.

Netivation said its 1999 revenues totaled $1 million, and it ranks among the nation’s top 500 e-commerce sites by visits.

Spokane’s oldest e-commerce site is www.onecall.com - started in late 1994 by Murray Huppin, president of Huppin’s Photo and Hi-FI.

By some estimates, OneCall has since become one of the 10 largest online sellers of home electronics gear.

“We may not be the busiest site of its kind, but we’re among those doing the most business,” said Murray Huppin, company president.

He said online sales at OneCall have been significantly stronger in the past three years than either Huppin’s retail trade or catalog business.

Huppin’s was among the first large Spokane area dealers to launch an online Web business.

Its original goal was to generate a steady sales volume for high-end stereo equipment, televisions and camcorders.

Over time, it had more success than Huppin’s owners expected.

The company operates the OneCall unit separately from the retail store. About 16 salespeople work at the retail location on West Main, while the OneCall unit has 17 workers in the Old National Bank building several blocks away.

The OneCall online unit, added Huppin, outperforms the retail store in total sales volume.

Local print and TV ads for Huppins by design don’t mention OneCall. Huppin said the company strategy has been to maintain and expand the retail operation and not “cannibalize” it by encouraging area shoppers to buy items over the Web.

OneCall and Huppin’s Hi-Fi sell essentially the same items. Because of deals with product vendors, some online prices will be lower than the retail version, said Huppin.

“But not always. Some retail store items may be lower at different times,” he added.

He declined to offer specific online sales totals.

Some online operations, such as www.davesmithmotors.com, find most of their Web traffic from shoppers in the Pacific Northwest.

Others, like the nutfactory.com and mgear.com, find most of their Web traffic coming from across the country. “I’m amazed at where the people are who buy from us,” said Gene Cohen, owner of The Nut Factory, which has its retail outlet at Liberty Lake.

“We sell to Texas, Florida and lots to people in California,” he said.

Medina said Mountain Gear has Web customers from Sweden and South America.

Medina sees several orders a year from South America, where buyers apparently join together to avoid high shipping costs on items they purchase from Spokane.

Those South American orders are often shipped to Miami. The buyers then arrange for a Florida-based freight handler to fly the order to South America. Or they ask some air traveler already going to Miami to transport the purchases as luggage.

The firms successfully using e-commerce here have relied either on existing retail operations - like Dave Smith Motors - or companies with a strong catalog-sales unit, like Coldwater Creek.

“We’ve done extremely well selling on the net because we have been using a one-price, no-hassle system to sell vehicles,” said Ken Smith of Dave Smith Motors.

“That’s made it easy for people when they call. They know what we have, we don’t need to bring them into the store to go through all sorts of games. We just help them find what they want.”

Smith said the Web site accounts for about 20 percent of the dealership’s total sales. It may well be the most most successful of its kind in the country, Smith added.

“We’ve had so many calls from other dealers wanting advice, that we’ll be spinning out our own dot-com company,” said Smith.

The spin-off will be an auto dealership Web site development company with plans to sell services across the country.

Coldwater Creek’s online business is clearly fed by the high volume of catalog shoppers the company has, said spokesman David Gunter.

“We ship 150 million catalogs a year and all of them have our Web site address on the cover. No doubt, they’re sending people to our site.”

The area’s e-commerce roster includes at least 15 companies with no storefronts or outlets. Those pure-Internet companies range from www.thedeliveryboy.com to www.pizzatools.com.

That group includes www.sculpturegallery.com, a fine art dealership operated by Spokane’s Will Murray.

After closing his downtown bookstore-software business two years ago, Murray launched www.sculpturegallery.com.

It’s gaining interest monthly and has already proven to Murray that selling items on the Internet is a revolutionary concept.

Last Christmas, a buyer e-mailed Murray about needing to buy a 2-1/2-foot-tall bronze figure of the scales of justice, listed at sculpturegallery.com.

The Orlando buyer, attorney Mark Ross, gladly paid $580 for the statue but insisted he needed it quickly to give to his girlfriend for Christmas.

Murray contacted the supplier but learned the bronze was out of stock.

Murray scoured several suppliers and discovered a small foundry on the East Coast that had some of the bronze pieces.

With just one day to spare, Murray ordered one of the pieces and was prepared to pay for express shipment.

Murray then learned that the foundry was in a small Florida town. He called Ross and said, “Can you get to Sanford, Fla., in one day? That’s where the bronze is.”

Sanford, Ross told Murray, was just four miles from his back door.

“So this is how the Web works,” Murray said later.

“A guy on the other side of the country shops for an item and ends up finding it right down the road. `And here I am in little Spokane, helping people find it. I think that’s amazing.”