Friday, March 9, 2007
Who am I and How Did I Get Here?
My name is Justin Hertz, but in some circles I'm simply known as the Top Mutt. I didn't get the title through a military coup; I didn't win a battle, not even a fight. I didn't pay through some scam of an online mail order title, and I wasn't bestowed the honor by a King or Queen. Nope, I got the title by accident, and if you ask me, all things that happen in life and in business are just a series of accidents.
You see, I was just working for the family business straight out of college. I would travel the world, from South America to Europe and back, all of which sounds awfully glorious, but when you take into consideration my primary job function was to source leather goods by visiting tanneries, which are some of the most disgusting places on earth, you will see there was little glorious about what I did. Google tanneries and you will see what I mean. Anyhow, I did this for about two years until I realized that I wanted nothing more to do with the family business. I wanted to make my own mark, carve my own niche, and hang my own shingle.
So, as it goes, one of the tanneries by coincidence, in addition to making cut soles for shoes, upholstery leather for jackets and cars, also made rawhide dog bones. I thought, “Maybe there's something here.” I asked them to send me some samples and a price sheet. Six months later I developed a line of rawhide called Happy Bones and started selling them wholesale to independent pet stores throughout the U.S. Two years into that project I had over 1000 accounts and business was doing as well as one could expect. But there was always these issues with overstock, actually a clever name that Overstock.com came up with, and it's too bad they still remain a dwarf in comparison to the big bad dynasty that is eBay. But I digress. So, we would have all of this overstock of goods. Shelves and shelves of rawhide that would sit, and it would mock me. It became the bane of my existence. Because you are constantly changing the formulation or the packaging or whatever, you are constantly left with merchandise you can't sell through the normal channels.
So, I thought, why not throw a pack of rawhide up on eBay and see what happens. Like the guy who first pitched "lets sell 200 rolls of toilet paper at Costco," (then Price Club) and all the execs looked at him like he was nuts, I said to my little team of myself and two employees, “Let’s put a pack of forty dog bones on eBay and see what happens.” Well, they sold, and at a significantly higher margin then I was making selling them wholesale. The wholesale gig is tough, you have to be ridiculously price sensitive and you end up working in the slimmest of margins. But, if you sell direct to the consumer, you don't have to be as tight with your margins. Also since they are buying direct rather than having to pay the retailers mark, you can offer them unbelievable pricing. A rawhide bone of average size (6-7") which sells at Petco, Petsmart and the like for from $3-$5, by buying in bulk from us, their cost was less than a dollar.
What started as one experiment, soon became 30% of our revenue from eBay alone. So we developed our website went after the direct to consumer market The rest as they say is history.
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