From Father/Son Team To Internet Powerhouse.
After the euphoric boom followed by the explosive bust of the dot com phenomenon, it's encouraging to see solid evidence that some e-commerce businesses are not only surviving, but are actually thriving. iboats.com, headquartered in Salt Lake City, Utah, is a great example of internet success despite going through those trying times. "The key to success online," says iboats.com CEO and President, Bruno Vassel III, "is in the basics. How solid is your business model? How well do you execute that model? And, of course, do you provide great value to your customers."
How It All Started
It was September 1998 when Bruno Vassel III received the call from his son Bruno Vassel IV that suggested they develop an Internet business together. In typical son/father style, the conversation went something like, "I've got the brains and you've got the money, dad, so why don't we get into the Internet!?"
When deciding where to focus their efforts, both Bruno's were avid boaters, skiers, fishermen, divers and sailors, so they decided to focus on what they loved, the boating and water-activities industry.
The conventional wisdom on the Internet was to cut out middlemen wherever possible and sell right to the end consumers. Companies were trying to sell everything from cars to flowers and dog food online by totally bypassing the established brick and mortar retailers. The boating industry was no exception. Almost all of the start-up marine-related web sites were building models that would cut out the boat dealers, something that's tough to do in a business where people rarely buy without actually seeing the boat in person.
From the very beginning, however, both Bruno's and their professional friend, Gordon Peterson, who later invested in, and became iboats.com's CFO, felt that supporting the boat dealers and marinas, instead of trying to disenfranchise them by going around them, was a correct business decision and, therefore, a core piece of the model they would follow. iboats continues to strenuously follow this core principle today in all it does.
Not atypical for entrepreneurs and start-ups, Bruno III (and his wife Cari) provided a bedroom in their Salt Lake City, Utah, home for the company's office. Bruno IV did his part by starting to develop the site. Bruno III provided the seed funding.
Within the first few days after the work began, another very critical decision was made that would dramatically influence the future success of the business. Instead of buying a single domain name and spending millions to advertise it through a massive TV and print campaign, both Bruno's decided to create many web sites - each designed to draw very targeted traffic on it's own.
"Those were the days when you could still buy some premiere domain names at reasonable prices," says Bruno Sr., and that's what they did. By the end of 1998 they owned over 100 prime domain names that all focused on the marine industry. Domain names like BoatDealers.com, BoatRetailers.com, BoatMotors.com, AllDiving.com, TackleShops.com, iSailing.com, and of course iboats.com were purchased.
Today the company owns over 1000 water-activities related domain names and the company continues to actively build stand-alone web sites for each of these URLs. This core strategy has clearly paid off for the Vassels and for iboats.com with astounding levels of traffic coming to their sites every month. Currently, based on seasonality, from 2 to over 4 million visitor sessions occur throughout the many iboats' owned web sites every month, and the number of page views continues to grow monthly…currently somewhere over 30 million a month! As to the future of this traffic-generating strategy, Bruno IV says, "We currently have implemented less than 30% of our capacity from our specialty web sites. We have a huge amount of real growth potential still in front of us."
Areas of Focus:
Early on the company's focus was on building a robust online directory of marine-related web sites. iboats' Web Directory today is the largest boating-related directory of web sites found anywhere on the Internet with many thousands of marine-focused web sites listed. But the marine directory is now just a small part of the total iboats model and focus.
In talking with a number of boat dealers in late 1998 and early 1999, the owners of iboats recognized the dealers' need for a robust, easy-to-use, inexpensive web site that would help the marine retailers to sell their new and used boats and motors online and bring more foot traffic into their physical stores. So iboats put in over 9,000 man-hours and built such a site, their stand-alone dealer site. Today they also offer an add-on-tools version of this web site for dealers who want to keep their existing sites. iboats sells and hosts these sites to many hundreds of marine retailers in the USA and lists their tens of thousands of boats for sale online. iboats also lists online thousands of boats for sale from individual consumers.
Another key to iboats success was the idea of building an online store, an e-commerce store for consumers where the public could find and buy all of the parts and accessories online that they needed for their water-related activities. This online store is called the iboats Marine MegaMall. Built and continually updated by the iboats’ IT Department and managed as to content and pricing by the iboats’ Marketing Department, at last count this online store had over 1.2 million product SKUs and over a million pages of content. Many thousands of consumers now buy online in the iboats Marine MegaMall every month, either directly on their computers or by calling toll-free 800 numbers at iboats when they need a friendly live person to help them with product questions and with ordering.
Company History:
In September of 1999, with seven employees and the need for more growth immediately, the company moved from the Vassel's home to an outside office.
Year 2000 was a year of heavy programming for the company to build the beginning infrastructure necessary to handle explosive growth. Additional new employees were added, and a number of contracts and partnership agreements were signed with a number of significant industry players.
During early 2001, traffic figures showed iboats to be nearing the top in the industry, with e-commerce revenues rolling in at a rate of up to tens of thousands of dollars per day and expenses and profits right on target. As to the remainder of year 2001, negotiations of various kinds continued and were finalized between iboats’ management and a number of major industry players, including the largest parts and accessories distributors, Land ‘N’ Sea. iboats ended 2001 by growing more than 700% over 2000!
The years 2002 and 2003 brought more of the same rapid growth, including many more customers, more sales, more products and product content added to the MageMall and more programming of proprietary tools to sell more and more products online to even larger numbers of consumers. Importantly, these two years were also the first two profitable years for the company…no small achievement, for sure, for a dot com that did not take outside investors money!
2004 and 2005 put iboats into its sixth and seventh years in business online. iboats was able to see and live through the maturation of many of its original ideas that then turn them into powerful sales and marketing engines. Early in 2004 iboats formed a b partnership with Lorenz & Jones Distributors, to become iboats #1 parts and accessories distributor. The Marine MegaMall, with its several hundred thousand individual marine parts and accessories SKUs for sale to the public became the largest single piece of the company’s revenue stream. iboats consumer Forums became the largest marine-related forums online, approaching 1 million posts covering 22 topics. Total revenues continued to grow rapidly with many of the new business units within iboats really taking off and becoming very successful. iboats continued to sign up good numbers of marine retailers for its custom web sites or web site tools programs, plus the company continued to offer web development and Internet marketing help to dealers, manufacturers and distributors.
Other accomplishments in 2004 and 2005:
- In October 2004 iboats.com was ranked #48 on Inc. Magazine’s 23rd Annual Inc. 500 List of America’s Fastest Growing Privately Held Companies. Also in the Inc. 500 publication iboats achieved the highest ranking of any marine products company and was the third highest ranked e-commerce retail company selected as a result of iboats’ four-year revenue growth of 2,061%. See http://www.iboats.com/press-releases/102104.html for the full press release.
- In early November 2004, iboats.com was awarded the #1 ranking in Utah for growth by any company, with a revenue growth rate of over 14,000 percent over the last five years. At an awards luncheon held at the Grand America Hotel, with over 1,100 attendees, iboats was recognized as the overall winner in that year's “Top100” Utah-based Companies by the Mountain West Venture Group. See http://www.iboats.com/press.html for the full press release.
- In 2005 iboats was awarded by Forbes.com the title of “Forbes Favorite” watercraft web site…beating out 7 other boating related dot coms for this title of #1. More details can be viewed at http://www.iboats.com/press-releases/042905.html.
- 2005 also saw iboats sign an agreement with Tracker Boats to offer all of their dealers’ iboats web sites and/or services. Needless to say, the number of boat dealers using iboats services jumped significantly during the year.
Early in 2006 iboats signed an agreement with a new all-water-activities focused TV company names MCE, along with their TV channel 217, “The Water Channel”. iboats provided a complete online store to the Water Channel that mirrored the iboats Marine MegaMall. iboats took and handled all toll-free phone calls and online orders generated by the 12 hours a day of TV programming and advertising on the Water Channel.
iboats also continued to add new product categories and thousands of new individual products into its MegaMall during 2006, with many tens of thousands of new pages of specific product content, offering consumers even more product options at excellent prices. iboats ended 2006 with MegaMall growth up nicely again, by 48% over 2005, and dramatic increases in the sales of certain product categories including life jackets, engine parts and inflatable boats. The company’s head count hit 73 employees during the busy summer months of 2006 when the Call Center was at its busiest helping customers.
2007 brought more exciting new additions to iboats. One important addition has been iboats introduction of a unique new solution for the 73 million consumers (NMMA source) who went boating last year and who may want to research this year’s new boat models. It is called the New Boat Showroom™. For the first time online, consumers interesting in researching and comparing thousands of this years’ new boat makes, models, engines, colors and other options, plus seeing the exact specifications for each boat, can now do so easily on the Internet. This is a free service offered to the public at www.iboats.com/New-Boats. The New Boat Showroom currently has more than 4,000 pages of content on the iboats.com website covering all 2007 model-year boat and engine brands and specific models from over 286 boat manufacturers. Dealers may also participate in this new program and thereby receive qualified leads from consumers who would like more information about a specific boat brand and model and who live in close proximity to that dealer.
Also of major important in early 2007, iboats and Volvo Penta signed a multi-year agreement whereby iboats built an online store, www.volvopentastore.com, populated it with many thousands of Volvo Penta’s OEM boat engine parts and accessories, and then started selling these items online to consumers. With a link right from the Volvo Penta website into their new Volvo Penta online store, and with Volvo Penta products now also offered to consumers within iboats’ Marine MegaMall online, consumers now have much easier access to this large number of OEM parts and accessories, drop-shipped right to their homes. iboats handles the whole purchasing transaction and also provides Call Center support to Volvo Penta P&A buyers.
Additionally during 2007, iboats signed an agreement with Brunswick Corporation to sell their tens of thousands of Mercury Marine Quicksilver branded parts and accessories online and to handle the whole purchasing transaction. iboats also was chosen by the “Brunswick Dealer Advantage” program to provide Internet, web site, and new and used boat lead generation services to all of Brunswick’s 5,000 dealers who qualify for this special dealer assistance program.
As of mid-2007, some stats of interest regarding iboats.com and our network of boating-related websites include:
- 4 million people per month visit our websites (visitor sessions)
- 3.2 million pages of content are on our websites
- An average of 14 to 20 “page views” per visitor session on iboats.com
- iboats.com is the #1 most visited “marine products retailer” online (based on Alexa.com numbers) with more that twice as much traffic as the #2 ranked marine retail sales company online.
- iboats offers over 1.9 million product SKUs for sale online, including all “wip” options.
- The iboats Forums now offer over 1.36 million posts (answers) that respond to more than 201,500 marine and boating related questions. Hundreds of people can now be found using these Forums 24/7.
2008 was both a good year and a very challenging year for iboats.com.
A number of positive and exciting accomplishments occurred during 2008. iboats.com was selected by Honda Marine to be their exclusive U.S. online-only retailer of small outboard motors sold for use in inflatable boat packages. iboats.com also reached agreement with another of the major marine manufacturers to build and operate their online store. Further, improved iboats.com software and hardware solutions for their Forums, and the addition of a greatly improved Directory to the Forums which added thousands of boating topics arranged by hierarchy, made it easier for people to learn more about boats, boat engines, and boating resulted, all of which dramatically increased the Forums traffic. Finally, as the number of subscribers to the iboats’ monthly e-newsletter passed 100,000 and kept growing rapidly, iboats.com also changed the format and name of their monthly e-newsletter from “The Transom” to the “Review.” The format was changed for the summer months to a 80+ page e-magazine with page-turning capabilities, a number of boating and marine-related articles, and multiple advertisers with full and half-page ads in each issue. To see the Review from 2008, go to this link www.iboats.com/iboats_review/# and then click on the “Review Archives” tab on the left column of the page.
As the overall U.S. and world economies deteriorated rapidly during 2008, iboats.com also was negatively impacted. Adding to the boating-specific challenges for consumers in 2008, gas prices rapidly rose and shot past $4.00 a gallon, causing more and more boaters to decide to reduce their boating activities for the season and that impacted iboats’ selling of boat parts and accessories. As the housing market dried up and home prices fell rapidly, lenders also became less and less willing to lend money to people wanting to buy a new or used boat, reducing the financing portion of iboats’ revenue model. And finally, manufacturers began cutting the amount of advertising they offered through all mediums, including online advertising...and that also negatively impacted iboats.com. All of this caused iboats to have to reduce its work force somewhat as of June, 2008.
By the end of 2008 iboats.com was positioned strongly to move into 2009 with renewed hope and expectations that both the very positive and the very difficult steps taken during 2008 had positioned the company better than ever before to move forward profitably and with renewed expectations of a strong future in the marine industry.
During 2009 the world struggled with the most serious recession in recent memory. The boating industry was also dramatically negatively impacted and experienced it’s worst year in decades with most OEM’s being off by 50 to 80% in revenues and both dealers and P&A retailers struggling mightily to stay afloat.
Amazingly on the other hand, during 2009 iboats.com experienced its best year ever with strong double-digit growth in both revenues and profits. Several contributing factors included; the steps taken by the company during 2008, increasingly strong partnerships with manufacturers, suppliers, and dealers, further increased targeted web traffic, increased repeat customers, increased offerings of more products and services, and a rapidly increasing boating “community” centered around iboats.com.
As iboats.com moves into 2010, expectations are high that the growth achieved during 2009 will serve as a springboard for even stronger very positive results during 2010.
The year 2010 exceeded our expectations with robust double-digit increases in both sales and profits over our strong 2009 results. The US and world economies continued their sluggishness during 2010…especially in the marine industry…yet for iboats, 2010 produced spectacular results which was most gratifying.
During 2010 iboats' Internet traffic continued to grow rapidly. Also within iboats, the Social Media focus that we started several years ago really exploded during 2010, further helping boaters to become aware of iboats and all we offer to help and support them. As iboats moves into 2011, expectations for further strong growth and profitability are very high.
Summary:
"As a business owner and as a person," the senior Vassel stated "I'm personally grateful to all of our great employees and the participating boat dealers, marinas, suppliers, manufacturers, trade associations and publications who saw and understood our dream and vision, stuck with us through those several early years of growing pains, and today share our confidence in the future of the marine retailers, the marine industry and iboats. Now all we have to do is to keep moving the process forward," Vassel concluded, "meaning serving the boating consumers while also supporting the boat dealers. And while that's no easy task, we're dedicated to making it happen!"iboats is a privately owned company based in a suburb of Salt Lake City, Utah.
