March 7, 2005
In 1997, Jake Jacobs decided he needed a more stable livelihood
than playing bass in a jazz combo. So, on a whim, he teamed up with
his brother to open Two Jakes, a funky take on the used office
furniture business, specializing in mid-century modern and vintage
desks, chairs, and other office paraphernalia.
He set up shop in the Williamsburg section of Brooklyn, because rent was cheap and real estate plentiful.
Jake's brother, Michael Jacobs (the other Jake), a mostly silent partner, sourced the furniture, mainly from their dad's wholesale used office furniture business, while Jake and his wife, Inga, a textile designer, made the place presentable.
At first business was brisk. In the second year, sales were up 75 percent over the first year. High-end furniture dealers from Manhattan made the trek to Williamsburg to get a deal on cool vintage office furniture they could resell at a profit just over the bridge. Design connoisseurs and those with good taste on a budget also made the pilgrimage. Jake had one full-time employee and a bunch of part-timers, and worked around the clock six days a week to keep customers happy and costs low.
In 2000, Jake decided to add a Web site, www.twojakes.com — essentially an online catalog. Then came 9/11 and sales slumped. While sales slowly picked up in 2002, by the next summer Jake decided it was time to shake things up a bit. He came up with a plan — his first. He was going to sell new office furniture, in addition to the used stuff, and he was going to sell it online as well as off.
In keeping with his philosophy of doing things creatively on the cheap, Jake hired a part-time employee who also happened to be a Web designer to do the front-end of the site and the Web designer's buddy to do the back-end. Instead of starting from scratch, they used the preexisting Web site as their starting point and used Cold Fusion for handling the new sections, including the e-commerce part. The site went live in January 2004.
While fulfillment is often an issue for new e-commerce — or e-commerce only — businesses, it was not a big issue for Two Jakes. Most items can ship FedEx ground. New furniture tends to be drop-shipped, as are the popular aluminum chairs from Emeco that Two Jakes features on its Web site.
"Basically we'll take the order and send the P.O. to Emeco, and they'll ship directly from the Emeco factory," says Jake. "We never touch the stuff."
TwoJakes.com has become a profitable extension of a bricks and mortar storefront.
But what truly gives Two Jakes a competitive advantage, in addition to having very hip office furniture that is not available everywhere else, is availability.
"One of the things we found is that in order to get an edge on selling a lot of these things, having things in stock is what will make somebody buy it from you as opposed to somebody else," explains Jake. "Especially when with a lot of these companies, we're bound by their policies regarding advertised price. Basically, everybody on the Internet is selling the same item at the same price. So the one advantage that you can have is to have it in stock. Then you're able to ship it faster."
To promote his new e-commerce site, Jake took out ads on Google, his major source of advertising, and tried to maximize hits on search engines. He also took out an ad in the New York Times Sunday Magazine last summer.
According to Jake, "We basically broke even. It's a pretty expensive place to advertise. We took one very big order that was just due to that. And then there were several other orders. But I got a call about a week ago, and somebody said, 'Oh, I saw your ad in the Magazine section of the Times,' which we haven't advertised in since last June. And it made me think, maybe I should be advertising there more consistently."
This year to improve online sales, Jake plans not only to advertise on Google ("It's directly responsible for a high percentage of our sales"), but to take out ads in national design magazines.
In all, direct e-commerce sales accounted for between 6 and 7 percent of business in 2004. But "that doesn't account for a lot of the sales that happen by telephone that are because of the Web site," says Jake. "And there are quite a few of those."
Because people living outside the United States must call the company for shipping quotes, those transactions wind up being done over the phone or by fax or email. Similarly, many customers who first hear of the store by visiting the Web site but are uncomfortable giving out their credit card information online (even though the Two Jakes site is secure) wind up buying over the phone.
"And those numbers aren't counted in that six or seven percent," says Jake.
In pure e-commerce fashion, Jake has discovered that his stylish and one-of-a-kind office furniture has many fans outside the New York Metro Area. After New York State, says Jake, the second biggest market is California, followed by Massachusetts.
"Blue States," laughs Jake — though he is happy to sell his furniture to Red Staters, too. Two Jakes also has a number of international customers.
If sales stay on track, Two Jakes will have its best sales year yet, with revenue expected to be between $700,000 and $800,000. The company is also marginally profitable. It was also named one of the 'Top 10 Retailers of 2004' by new furniture dealer Emeco.
Currently, Jake is remodeling the Williamsburg store — giving the outside a much-needed facelift and expanding the retail space from 1800 square feet to 3300 square feet. He is also contemplating opening another store, perhaps children's furniture, either offline or on, and expanding current offerings to include big-time names like Herman Miller. And while he still spends most of his time at the store, Jake has taken up his bass again, playing jazz one night a month at a local soul food restaurant.
Next (3/8/05): Advice to bricks-and-mortar retailers from e-commerce expert Patti Freeman Evans, analyst, JupiterResearch.
Source: e-Commerce Guide
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