Direct shipment of goods from China is a booming business, but customers need patience.
In the beginning, all Brent Gensler was trying to do was find a bargain-priced sofa set.
He ended up with an online furniture retailing business, Minneapolis-based DefySupply.com, which grossed $720,000 in its first 12 months and is on track to approach $1.5 million revenue in 2009, its first full year.
The attraction: deep discounts on sofas, dining sets, patio sets and other furnishings manufactured in China, one order at a time, and shipped directly to the customer.
It's an uncommon business model that operates without expensive warehouse networks and inventories or the standard array of trading companies and other middlemen to mark up the price.
The journey from sofa shopper to furniture entrepreneur has all the elements of a saga, including months in the library researching the complexity of the shipping channels and a few months more spent in Asia seeking manufacturers that offered both good quality and a willingness to build products one order at a time.
"It sounds crazy now, but it made perfect sense at the time," said Gensler, 25. "I just didn't understand how much I didn't know."
It started with a job offer from a financial management firm in San Francisco following Gensler's 2007 graduation from the University of Wisconsin-Madison with a degree in business. Before he made the move, however, he began shopping for furniture.
He wound up with a serious case of sticker shock: "The $3,000 relocation money they offered wouldn't buy much more than a sofa set," Gensler said. "I had no idea how expensive furniture was."
So he contacted some furniture manufacturers he had encountered in China during two summers spent in Shanghai and Hong Kong during college as an intern with an international real estate firm. He had made the contacts while checking out upholstery manufacturers for his family's Minneapolis upholstery fabrics business.
Gensler was impressed with the bargain prices offered at the plant, and asked several manufacturers if they'd be willing to sell him a sofa at those prices.
"They told me they'd build me a sofa, but I'd have to figure out how to get it here," said Gensler, who was pretty much oblivious to the difficulties involved. When several of his friends expressed an interest in a similar deal, however, the idea of simply buying a sofa set morphed into the founding of DefySupply early in 2008.
First, however, came more than three months at the library researching the complex world of distribution channels, shipping costs and currency fluctuations.
Gensler calculated what various carriers charged for overseas and on-land trucking. He discovered that packaging was critical, and that breaking a larger piece into two smaller packages could save a bundle. He figured out how to combine shipments for a minimum number of trucks from factory to seaport and from the West Coast to the customer.
That done, he spent three months in Asia contacting upwards of 250 furniture manufacturers before selecting 50 companies in China.
As he navigated the logistics labyrinth, Gensler learned the hard way that there can be frustrating and sometimes expensive glitches.
Several clients have complained to online consumer websites about lengthy delivery delays, damaged goods and furniture that did not match the color which customers thought they'd ordered.
In response, Gensler has replaced several transportation vendors and added color swatches to his website to pinpoint customer preferences and avoid disagreements.
His efforts have paid off with a collection of favorable online reviews regarding the style and quality of the furniture, assets that make even an eight-week delivery delay "worth the wait," as a New Jersey customer put it.
There have been some painful surprises along the way, however, notably the discovery that different carriers charge different rates according to ZIP codes.
"Early on I picked the wrong trucker to haul a sofa set from Los Angeles to Chicago," Gensler said. "It cost me $1,300 for a set I sold for $1,200." He since has automated the process so that the ZIP code automatically dictates the lowest-cost carrier. The upshot: The same delivery today would cost about $365.
Then there was the time he mistakenly shipped a sofa to Miami that was meant for a buyer in St. Louis. At the time, he was trying to run the business himself -- handling sales calls, notifying manufacturers, arranging shipments and managing the website.
"Because of the time differentials and the growing business, I was working 20 hours a day" and making himself sick in the process, Gensler said. He knew he needed help.
A year ago he opened a warehouse in China and hired bilingual Chinese to inspect products and coordinate shipping and soon after hired a systems engineer to automate the entire logistics operation. Today he has eight employees in China and six in the United States.
The business was financed by the generous bar mitzvah gifts Gensler received and plowed into a mutual fund that grew enough to keep DefySupply afloat. It helps that he's learned how to skimp.
"When I was in Asia looking for manufacturers, I always stayed in the worst hotels and ate the worst food," Gensler said. "It turned out to be worth it."
Dick Youngblood • 612-673-4439 • email@example.com