08/04 - Scottsdale Web business gives small retailers Wal-Mart-size buying power - East Valley Tribune: Business

08/04 - Scottsdale Web business gives small retailers Wal-Mart-size buying power

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Posted: Monday, August 4, 2003 9:56 am | Updated: 1:56 pm, Thu Oct 6, 2011.

An ancient Chinese art meets 21st-century cyberspace at the Feng Shui Arizona store in Mesa. The store offers items such as calligraphy, Buddha statues and wind chimes that promote peaceful and harmonious living —the goal of feng shui. In fact, owner Lisa Montgomery believes it’s the most complete, if not the only, feng shui store in the Valley.

The bulk of Montgomery’s products are produced in China and other Asian nations. But Montgomery doesn’t have to know how to speak Chinese or understand the intricacies of importing to stock her inventory. Instead, she acquires the items through Dollardays International, an Internetbased wholesale distributor to small businesses (www.dollardays.com).

Dollardays, which is based in Scottsdale, buys about 20,000 gift items in bulk from manufacturers, then sells them to about 20,000 small gift shops in all 50 states.

Because the online wholesale service orders in large quantities, it pays lower prices, which are reflected in the price it charges to retailers and the price the retailers ultimately charge customers.

"We give small mom-and-pop stores a way to compete with Wal-Mart," said Marc Joseph, chief operating officer of Dollardays International. "We are enabling them to survive in a chain-store world."

Montgomery, who previously operated a home-based business as a feng shui consultant, said she decided to open the store at 1616 E. Main St. because she could sell for competitive prices by acquiring products through the Dollardays Web site.

"People were paying atrocious prices for this stuff," she said. "This helps customers have more fun with it."

Cathi Grimes, a partner in Cathi’s Place, a linens store at the Mesa Marketplace in east Mesa, also acquires her merchandise through the Web site. She said the ease of the distribution system is a major advantage, along with the lower prices. The only drawback is their inventory is not extensive enough to stock the entire store, she said.

"They have a wide assortment, but we have to go elsewhere to find more," she said. "If we had a choice, we would order everything through them."

Dollardays, a privately held company, started with five investors in Scottsdale in 1998. At first the company offered just a few key categories, mostly products for gift stores such as gift baskets, greeting cards, collectibles and items for holidays such as Mother’s Day and Christmas. As the service found more products, it started to snowball, Joseph said. More gifts brought more customers, such as dollar and discount stores, which in turn interested more product manufacturers.

"The Internet is a very connected community," he said. "The more exposure we get, the more people are coming in to find out what we do."

The company has had no trouble finding products to offer its customers because the Web site offers manufacturers a new channel to distribute their products, he said.

"We have opened up many little towns they couldn’t reach otherwise."

The Web site deals only in wholesale goods to businesses with no retail component.

Dollardays, at 7900 E. Greenway Road, has less than 20 employees, mostly customer service representatives who work with the small stores, information technology experts who maintain the Web site and buyers who find the products.

Among the products distributed by Dollardays are watches, candles, jewelry, laptop computers and televisions. The company also buys office supplies and store fixtures, which can help a small retailer get started. In addition to helping entrepreneurs start brick-and-mortar stores, the company helps them set up online stores, he said.

Dollardays does not release revenue and earnings figures but is growing at about 30 percent a month and expects to be profitable by the end of this year, Joseph said.

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