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Interview With Minimus CEO Paul Shrater: A Small Business Based on Small Items Turning 9

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On July 6, Minimus.biz, a niche e-commerce company that focuses on travel-sized and individual-sized items, celebrates entering its ninth year in business. I had the opportunity to interview Paul Shrater, its cofounder, to explore how the company went from a boot-strapped startup to one that Internet Retailer named to its top 1,000 grossing e-commerce companies in the country.

Where did the idea for Minimus come from?

My parents, sister, and brother-in-law were on a trip to New Hampshire, where they had rented a cabin for the week. They each went and purchased bottles of their favorite brands of dressings and boxes of cereal. At the end of the week, when they were going to fly home, they realized that it was a waste to throw away the bottles and wished that there was a company that sold the condiment packets, and minis of their favorite brands. They mentioned the idea to me and I thought that it would be a great niche to focus on. Everything small -- food items, travel sized toiletries and more. I was also watching how the public was finally trusting putting their credit card online and yet, there were not a lot of stores to service the new world of e-commerce.

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What were your early challenges in growing the business?

Our earliest challenge was a couple of months into the business when we had grown beyond a couple of offices and needed a real warehouse. It was difficult to find a commercial warehouse space that would lease to a company that only had a couple of months of financials and that did not require a five-year commitment with a personal guarantee. Luckily, we found a great building owner that believed in the potential of our business and structured a stepping-stone formula to allow us into the space with pricing and time commitments that mirrored our business growth.

How did your business morph during its growth?

What began as an e-commerce venture to the individual consumer grew to include a large variety of wholesale customers: corporations, nonprofits, educational institutions, medical institutions, government agencies, hospitality companies, sports teams and numerous others. As we warehouse everything on-site, we also developed a presence in the promotional products industry, as we have the ability to logo kits of products for people (corporate events, golf tournaments, disaster relief kits, destination weddings and hundreds of others) and provide a fast turnaround.

How has your decision to warehouse items on site affected your business?

Given that we have a lot of little items with a low margin, it wouldn't be cost effective to outsource our pick and pack operation. It has also allowed us to get into things like custom kit building, as prototypes can be assembled quickly, and then full production can be done seamlessly after product approval. It has also allowed us to react quickly, overall. Larger companies take a long period of time to setup accounts and do things like coordinate orders with third party fulfillment centers. Our best example was when Hurricane Katrina hit, our shelves went empty, as we were able to react quickly to companies, agencies and people that wanted to help. I remember that we even had a large order to support the National Guard in New Orleans that came in on a Friday morning and we had it out the door at the end of the day, set for a Saturday delivery (kudos to FedEx for helping to make that happen!). Without warehousing our products, none of this would have been possible.

What are some of the most popular products that you offer?

We see certain audiences that make certain product lines popular. For instance, dieters love the selection of fat-free salad dressing packets for use when out at restaurants. Coming into the summer, we do a large business in travel-sized sunscreen and similar summer- and beach-related products. A lot of that is driven by the variety of brands and breadth of product that we offer. We are able to provide customers with their favorite brands, so that they don't have to trek to their local pharmacy, grocery store, or big box retailer only to find a fairly limited supply of items that may not include what they want.

What types of customers come to your site?

We have all sorts of people visiting the website. The obvious customer is the person or family that is traveling by airplane. That is what most people think of with travel sizes. But, that is only a small fraction of our customers. Camping, hiking, backpacking, RVing and related outdoors activities are another significant area, especially due to the single serving condiments, food and beverage items. The customers are really wide-ranging: from a European princess, to the astronauts on the International Space Station (via NASA), to the pit crew of a top NASCAR team, to a professional baseball player donating items to the homeless, to one of the founders of one of the largest companies in the world ordering for his personal travels, or grandma who needs a box of sugared cereal when the grandkids visit. It is definitely interesting to see the different places in which travel sizes and individual serving items are used.

With such a varied customer and product base, customer service must be a nightmare. How do you approach customer service?

We have always prided ourselves on customer service, from day one. And, we always continually try and improve upon it. Personally, I hate the modern day phenomenon of phone-tree run-around, lack of personalized attention, and reps that don't have the authority to solve problems (or they pass them off to someone else). Thus, we work hard to provide proactive personal attention to customers with questions or issues. Recently, we were given the Excellent Customer Service award by an interesting company, Stella Service, who blind-shops websites without their knowledge, returns items, and gives customer service a hard time to see how it was handled. If you pass their thorough criteria, they award their excellent customer service award.

What advice would you give other e-commerce entrepreneurs?

Go for it -- but be careful and diligent on how you proceed. Lately, there has been a huge emergence of third-party companies to enhance every aspect of e-commerce. In nearly all of these cases, the pricing is not a one-time fee that you might pay a software developer who works on your website, but a monthly fee that is never-ending. In many cases, the fee is also tied to the level of usage on the site. Thus, entrepreneurs need to be careful in terms of thinking about some fees as one-time fees that can be "paid for" over time, and other fees that immediately impact the bottom line margin. Thus, it requires more careful decision making and analysis of whether site enhancements can truly pay for themselves in return on investment.

For more information on Minimus, visit www.Minimus.biz