Shoplet.com finds its niche

June 2010

CEO Ellison will discuss how the web-only office supplies retailer competes against giants.

By Internet Retailer

When Tony Ellison founded online-only office supplies retailer Shoplet.com in 1994, the office supplies space was crowded with big-box retailers. Sixteen years later, the category is still crowded.

Yet Shoplet managed to earn an Internet Retailer-estimated $100 million in online sales in 2009, making it No. 134 among North American retailers in online sales, according to the Internet Retailer Top 500 Guide. That's still a far cry from the dominant retailers in the space-Staples, Office Depot and OfficeMax are Nos. 2, 5 and 7, respectively in the Top 500—but it makes Shoplet the biggest online-only player in office supplies and furniture.

The reason for Shoplet's success is it found a way to distinguish itself from the competition.

To do so, Ellison studied his rivals, a practice he will urge other retailers to adopt in his featured address next week at the Internet Retailer Conference. "You learn from both their successes and failures," he says. But, he cautions, retailers shouldn't just replicate what the competition is doing. "You can't outdo the 800-pound gorillas of your space because they've perfected that game. But you can expose their weaknesses, and their weaknesses may offer an unarticulated need in the space."

For Shoplet that unarticulated need was a broader selection of name brand products, lower prices and environmentally friendly offerings.

Ellison will also highlight how following three simple principles—differentiate your business, concentrate on the market niche, earn customer loyalty—allowed Shoplet, a company with 66 employees, to compete against the Big Three, which have about 66 employees on staff at a typical store.

"[Web-only] companies like Shoplet have an opportunity to compete more efficiently online and to fill real needs in their industries," he says. "I want to help people understand how they can differentiate themselves and sustain success."