Two summers ago, Derek Kleinow '04 began selling random items on eBay and noticed that people showed an interest in buying global positioning system products online. By the end of the summer, he had launched his e-commerce website www.tigergps.com.
"It was pretty slow at first," Kleinow said in an interview at Café Vivian, explaining that the site soon began to average 30 to 40 orders per day during Christmastime of 2001.
In the fiscal year 2002, his site racked up $285,000 in sales.
Achieving this figure has been hard work for Kleinow, who sometimes spends up to eight hours per day managing and running the business. "At least one to two hours per day are necessary for processing and responding to orders and phone and email queries," he said.
The site
"The only thing you need to run my business is a computer," Kleinow said. He created the website through Yahoo! Shopping, a system that allowed him to upload product information and pictures into a standard format for web businesses.
For Kleinow, this procedure was all about simplicity. "I like the site because it is simple and well-organized," he said. "Therefore, it is easy to navigate."
As for the domain name, the choice was almost obvious — "short and easy to remember" and full of Princeton spirit.
But, because the site is standard looking, Kleinow said he feels there might be some drawbacks to the relatively plain image.
"I am almost afraid that the site has an unprofessional look," he said.
The question for him is whether a new logo and interface are worth the money it would cost to create them, and whether the look of his site actually detracts from potential sales.
Kleinow said he feels the cost investment would not attract enough new customers to cover the expense. "Some people tell me that they don't feel safe buying from my website, so part of my job is helping them to feel comfortable buying from me," he said.
That often involves fielding phone calls on his personal cell phone and helping to point customers in the right direction if they are unsure of which system to buy.
As a shopper enters the site, a tiger logo pops onto the screen, along with Kleinow's guarantees for "the lowest prices" and various customers' praises. The left-hand side of the site directs buyers to different sections of the site, depending on what they are shopping for.
Kleinow has created different sub-pages for GPS products, related software and accessories. His contact information, a site search engine and a form for bulk orders also appear on the webpage.
For each product, the site offers a picture, a detailed description of its features and links to the coordinating accessories he offers on his site.
The shoppers
With 60 percent of his shoppers originating from Yahoo! Shopping, tigergps.com benefits greatly from the arrangement. "It provides a great base of sales," he said.
But there is a catch. Through this marketing system, Yahoo! takes a 3 percent commission, which translates into thousands of dollars per year of revenue from Kleinow's company.
That could translate into higher prices, which Kleinow said most affects sites like his because his customers are "destination shoppers" — people who know what system or accessories they want and are just searching for the cheapest price.
"In general, my customers are experienced shoppers who have already determined what they want," he said. "They buy because of the discounted prices."
The student entrepreneur has the unique position of being able to sell a wide variety of products, yet stock no inventory.
"I have a relationship with a distributor that stocks every product that I sell," he said. Because of this relationship, he is able to offer extra discounts on the products.
The website offers a large number of different products for sale, including 30 different handheld GPS systems of brand types Magellan and Garmin.
"They are principally used for automotive and hiking purposes," Kleinow said.
The site also sells the software necessary to utilize these different products as well as carrying cases, power cords and adaptors, bracket mounts and memory cards for each of the systems he sells.
Beyond the site
An economics major with a certificate in finance, Kleinow sees this project as "not just a moneymaking project, but a valuable learning experience."
He has decided to apply his real world experiences to his University academics by writing his Junior Paper on increasing efficiency in the retail market of electronics and enrolling in ELE 491: High Tech Entrepreneurship this semester.
While he likes the fact that this businesses is on his "own terms" and time schedule, Kleinow is looking for an employee who can be in charge of the day-today operations of the business.
"I want to stay involved, but I don't want to do this specifically after I graduate," he said.
Kleinow has visions of Wall Street, business school and more startups dancing in his head.
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