

Meet the man who sells $89 million of diapers each year online - cwan
http://www.inc.com/magazine/20090901/the-way-i-work-marc-lore-of-diaperscom.html

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justinhj
It shows you can still make money on the internet even if your product is full
of shit.

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kyenneti
I don't doubt their execution, but its domain(diapers.com) might have helped
big time in their success.

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AndrewJ
Hands down, but at the same time if he hadn't run the site properly the domain
would probably be linking to amazon.com or something by now.

The domain grab really was like the land grab of the west in the US, first
come first serve and if you defended your property then you're now a
millionaire!

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cwan
What I personally find interesting about the story is the execution and
optimization to get such remarkable margins in what should be a commoditized
business:

"We built software with computational algorithms to determine what the optimal
number of boxes to have in the warehouse is and what the sizes of those boxes
should be. Should we stock five different kinds of boxes to ship product in?
Twenty kinds? Fifty kinds? And what size should those boxes be? Right now,
it's 23 box sizes, given what we sell, in order to minimize the cost of
dunnage (those little plastic air-filled bags or peanuts), the cost of
corrugated boxes, and the cost of shipping. We rerun the simulation every
quarter. Using the right box probably adds close to 1 margin point."

1% is incredible - that works out to being 890K+/year (though that might
depend on what their "null" case is/was).

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jerf
I remember being shocked that "packaging" was a four-year bachelor's program
when I went to my university. After some examination of the curriculum, I was
convinced. (Though I still don't know what you do for a PhD....)

Anyhow, my point is that rather than stunning innovation, that sounds rather
like Packaging 101. However, I'm sure that's because that's the summary for
the journalists and I wouldn't be surprised that they are doing actually
innovative stuff beyond a journalist's grasp... because as we should all know
by now, getting past a journalist's level of knowledge is not a challenge.

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antirez
> The year we started, our gross margins were 4.6 percent. Today, they're in
> the teens.

Does this mean that they earn 8.9 million every year? Or the headline
mentioning "89M $" is already a "clean income" figure?

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nobody_nowhere
I read the 89M as a topline gross revenue -- so 11.57M if that "teens" (i.e.
13%) figure applies to the past year. He's more or less admitting he can't
scale while retaining that, but it's still a nice chunk of change to reinvest
into growth.

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antirez
Thanks

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tigerthink
Sounds like fun. I wonder though: if all he wanted to do was maximize his net
worth, would he be better off hiring a statistics graduate student who knows R
and training his replacement so he could go start another company?

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greyman
No, since maximizing net worth involves much more to do.

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tigerthink
Please elaborate.

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zaidf
Throughout the story I kept wondering 'how old is this company?'. Till the end
I could not tell.

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byoung2
Founded in 2005

<http://www.crunchbase.com/company/diapers-com>

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zaidf
Wow I learned so much more from crunchbase than that piece. This is very rare:
I usually _really_ dig pieces written by the founders.

Just in this case the writing was very scattered and repetitive.

Most of my questions like what were they doing before diapoers.com; how they
got the domain; what venture did they do before remained unanswered.

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jpcx01
Heh, reminds me of Ashton Kutcher in the movie "A Lot like Love". His startup
(which ultimately tanked in the movie) was an online diaper store.

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brown9-2
Sounds like this guy sells a lot more than just diapers (such as car seats),
the title might be a little misleading.

Pretty interesting story, thanks for posting.

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pbhjpbhj
It's one of those meme title formats - a flat out lie too.

