Editor’s note: Charlotte Beat is a regular feature on Wednesdays. At least one Queen City “dot com” is still going strong.
Founded in fall 1999, MoonBuzz.com Inc. is growing at a monthly rate of between 20 and 30 percent, one of its owners says, and its April business was twice what it was in January. Although the Charlotte-based firm is most definitely a dot-com firm, it has experienced this growth not by touting its technological expertise and knowledge of e-commerce, but by showing potential clients how it can solve their business problems.
“Rather than saying we provide a tool for e-commerce, we show that we can help them get rid of excess inventory,” says Steve Jegier, who owns the firm with founder Patrick Vaughn. “Our clients don’t care that we have cool software systems — they just want their stuff to go away.”
MoonBuzz helps large companies sell off excess inventory online. But it’s not simply a client calling Jegier and his cohorts when the client suddenly realizes there’s a bunch of excess inventory. It’s most often a well planned, carefully laid out schedule and approach, making it an integral part of the supply-chain management process. So it’s not IT or e-commerce managers that MoonBuzz approaches for business, it’s division managers and top management.
For example, Jegier explains, if a company knows it’s launching a new product in a certain month, it will start releasing old products to MoonBuzz a month or two earlier before the inventory is considered outdated and goes down in value.
Currently, MoonBuzz is focusing on four product areas: computers and peripherals, consumer electronics, home and garden, and office products Clients include Hewlett-Packard Co., Compaq Computer Corp., KitchenAid, Yamaha, Casio, Black and Decker and United Stationers.
Once clients outsource the business to MoonBuzz, they are completely out of the picture. Information on the products is sent to MoonBuzz, and the products sent to at least one of the 40 warehouses the company has access to all over the country. Instead of owning and running warehouses, MoonBuzz has an agreement for those services with The Order People, a subsidiary of United Stationers, a $4-billion distributor of office products.
MoonBuzz posts the product online on such sites as e-Bay and Yahoo!. But it’s not just a matter of throwing together a few words and a photo for the site.
“Our clients are very protective of their branding, and we have to make sure we use the right PMS colors, that the logo is placed correctly, that the tagline is used the right way,” Jegier explains. “We work closely with their marketing departments as if we were one of their divisions.”
MoonBuzz not only cultivates close relationships with clients, but also with all its vendors, such as e-Bay (where it’s a Preferred Solutions Provider), FedEx, UPS, CyberCash and United Stationers, which is both a client and a vendor.
MoonBuzz manages the entire process, from posting the information, handling the bidding process, confirming credit cards, shipping the goods, dealing with deadbeat bidders and returns. Clients get a weekly check for sales, less MoonBuzz’s commission. “Our clients don’t have the staff to manage this process,” Jegier says. “They are very happy when they get their check.”
Vaughn and Jegier, now both 37, met while they were working with Andersen Consulting. When Vaughn founded MoonBuzz in Charlotte, Jegier and his family were living in Kentucky. But in summer 2000, he came to the Queen City work with his friend.
The operation began by marketing online services to pawn shops, but in April 2001, the partners saw the potential in approaching large companies. Last year, they say, revenues were 71 times that of 2000. The company expanded to 15 employees by January, has added three more since then, and is now recruiting for two more positions.
The company is self-funded, which Jegier says is one reason for its success.
“It’s given us the freedom to do what we feel is right, and not be held hostage by venture capital,” he says. “We don’t have that pressure hanging over our heads. We invest our money very carefully and add people and equipment when we need them. We’ve been very methodical.”
MoonBuzz has been located in the Ben Craig Center, a business incubator affiliated with UNC Charlotte, since early 2000.
“It’s not just the attractive rent, but their level of services,” Jegier says. “The staff has done an excellent job of hooking us up with the right people and have a done a great job of taking care of us. We want to stay here until they throw us out.”
Jegier says he and Vaughn haven’t discussed an exit strategy, but are focused on “building a great company and doing what it takes.” Although not looking for outside funding, he says, they are talking with strategic partners that offer “practical reasons for hooking up.”
MoonBuzz Web site: www.moonbuzz.com