Olejo Turns a Dormroom Hustle into a Growing E-Commerce Business
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prices marked up so they can be marked down again: “It’s ‘Queen size, $399, 50 percent off,’” he says. “And we’ve tried to stay away from that.”
One key to Olejo’s business, Dietz says, is actually getting people on the phone. That takes a page from the playbook of Zappos, the customer-service obsessed online shoe store that was gobbled up by Amazon for nearly $1 billion.
Most consumers aren’t totally comfortable with buying a big-dollar item like a mattress—which they’ll be intimately familiar with and keep for a long time—purely over the Internet, Dietz says. That means it’s critical to walk people through all of the features of an item they’re buying as close to in-person as possible.
“Everybody that works here is expected to know how to speak with somebody on the phone,” Dietz says. To either help them with their basic needs or to be able to actually sell the product.”
Another key for Olejo is the logistics system it has built to coordinate shipments behind the scenes. That means sourcing all of the products from the supplier, shipping it in containers or on pallets via freight carrier, and making sure it gets to the buyer over the “last mile” of trucking without damage (and basic shipping is included in the purchase price). Keeping all of that straight really dominates the day-to-day work at Olejo, Dietz says.
“Really, I like to think of us as more a logistics company that happens to be selling mattresses than a mattress company,” he says. “It’s almost that the customer-facing side is the easier of the two halves of the business. And I think that holds true no matter what widget you’re selling.”
That focus on the really unsexy parts of a pretty unsexy business (selling beds) is something Dietz sees as a real strength in an evolving e-commerce world.
The sector has always attracted plenty of interest, from traditional retailers trying to bridge the digital divide to a crowd of upstarts, most recently including “flash sales” or membership sites that use different sales or membership gimmicks to drive revenue and market share.
In the Boston area, fast-growing online home furnishings retailer Wayfair is a bit of a competitor, since it sells beds, bedding, and other home furnishings. (The two sites have come at the market from different angles: Wayfair came from a broad attempt to sell home goods, while Olejo first sprung up on the strength of offering specialty items, including hospital, adjustable, and allergy-free beds.)
I also have to wonder if, like many other e-commerce players, something like Olejo has to worry about the giants at Amazon (NASDAQ: AMZN) taking an interest in its business and squashing out smaller players.
Dietz says that’s not as much of a concern in the mattress game—for one thing, it’s not a particularly glitzy business. But mattresses and beds also aren’t really suited for shipment from carriers like UPS and FedEx, which Amazon relies on to complete its fast shipping network.
Former Shoebuy CEO Scott Savitz, an advisor to Olejo, says the startup fits into a broader theme in the present e-commerce world where retailers focusing on a specific category—particularly if they focus on providing a great customer experience—can build a strong business outside of the everything-to-everyone players.
“By focusing on being the best in your product category, continuing to be very innovative, and staying married to your value proposition with the customer front in center in everything you do, there is still lots of opportunity to build very big businesses outside of Amazon,” he says
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