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Slow and steady on the Web
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January 4, 2001: 1:02 p.m. ET
Dot.com survivor FragranceNet.com profits from frugality, superior service
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NEW YORK (CNNfn) - It's no secret it was a dismal year for most e-commerce companies. High profile failure was the story of 2000 as consumers failed to flood Web-based businesses with orders and investors turned their backs once they realized the fledgling companies were burning much more cash than they were bringing in.
Still , not every e-commerce company will go the way of the failed Eve.com. One that has managed to stay on top even through the woes of 2000 is a site devoted solely to the sale of perfume. The key, according to CEO Jason Apfel? You can only waste money when you have it.
Unlike other e-commerce sites that attracted big investors, FragranceNet.com was never given money to burn, so it had to run a trim, money-making operation from day one.
Apfel started the business, which now sells more than 1,200 brand-name fragrances, in 1995 with $50,000 of his family's money. Apfel's frugal approach also meant he didn't spend frivolously on marketing. Instead, all FragranceNet.com's Internet advertising is performance-based, meaning the company pays a small commission to other sites that send paying customers to FragranceNet.com.
Much of the company's growth, however, has been organic -- satisfied customers spreading the word about shopping at the site, Apfel said Thursday in an appearance on CNNfn's Market Call. Without deep pockets or a lot of buzz about the company, Apfel said the folks at FragranceNet.com had to work harder to attract and retain customers when it went online in 1997.
A superior shopping experience online
The result of that hard work is a superior experience for shoppers cruising for sweet smells. If a customer is not sure what she wants to buy, she can consult with a fragrance specialist or use the site's "fragrance finder," a search function that will recommend fragrances based on lifestyle, price and will give a description. FragranceNet.com also maintains a supply of small-size bottles that sell for $5 or $10 so those seeking to experiment can afford to do so.
To help customers remember important occasions, FragranceNet.com created a reminder service that send out e-mails 10 days before an important birthday, holiday or anniversary.
And unlike some e-commerce companies, customers at FragranceNet.com are never without help from a real, live person. If they cannot, for example, locate a fragrance they seek, there is an 800 number that connects them with a friendly voice at the home office.
Comparison shoppers also have found a lot to love about FragranceNet.com. The company guarantees to undercut the competition by 5 percent and each purchase is shipped and gift wrapped for free and accompanied with a free gift. (142KB WAV) (142KB AIF)
FragranceNet.com has seen its revenue grow from $330,000 in 1998 to $4.7 million in 2000. Most recent quarterly profits, from the quarter ended in September 2000 were $120,000.
What's in the future for this dot.com survivor? Apfel said he expects to stay on a course of slow and steady growth.
"We'll be around as long as we are profitable," he said. 
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FragranceNet.com
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