Small retailers finding comfortable niche selling only on Web

By Dan Nakaso
Advertiser Staff Writer

The customer from the desert town of Palmdale, Calif., wanted three picture frames featuring three-dimensional tropical fish. And Daniel Hoover, working from a spare bedroom in his 'Ewa Beach home, was more than happy to fill the order at a cost of $57.96, including shipping.

Daniel Hoover of 'Ewa Beach shows one of the many Hawai'i-themed products he sells from his online business, operated out of his home. Mom-and-pop stores have done well in niche markets on the Internet. Eugene Tanner • The Honolulu Advertiser

"It's just like having a store, but people don't walk into it," Hoover said. "They come in through cyberspace. For me, I love the independence of working at home. Living in 'Ewa Beach, the traffic can be horrendous. When I worked downtown (as a senior trust assistant for a bank) the traffic was a drag."

While the Internet has seen spectacular flameouts of large Web-based companies, mom-and-pop retailers have quietly discovered their niche selling only online, said David Kathman, a stock analyst for Morningstar Inc. who tracks companies like eBay and Amazon.com.

"Online retailing has kind of gotten a bad rap because of the high-profile failures that were there two or three years ago when the bubble burst," Kathman said. "But a lot of small businesses actually have done very well on the Web."

It can take as little as a few hundred dollars to start an online retail business. Small businesses also are benefiting from more sophisticated and efficient ways to link customers to their sites.

Maikaihawaii.com, like other Hawai'i online retailers, can now be found through keyword searches on Google known as "pay-for-placement" search results.

"Someone looking for 'Hawaiian jewelry' can now find your site easily," Kathman said. "In many ways, it's easier for a small business now because there are more people online than three or four years ago, and the messages for reaching them have gotten more sophisticated."

Pete Martinez, president of eBizHawaii.com — which designs, hosts, manages and markets Web sites for private and government operations — believes that businesses can do well selling only through the Internet. But he estimates that only 300 to 400 Hawai'i businesses do it.

"It's much more than just building a Web site," Martinez said. "You need to know how to select your products and merchandise, you need to know how to market your merchandise online, you need to know how to sell your merchandise online and you need to know how to manage your business.

"That whole skill set is what we call an entrepreneur, and that's a complicated skill set for most people."

Online operations also might see a unified sales tax system that would make it easier for states to collect on Internet sales. Under current laws, catalog companies and online-only companies need to charge sales tax only in states where they have operations.

Steve Parente brought a background in advertising, commercial art and interactive graphic illustrations for Boeing Co.'s 757 and 767 jetliners to his Web-based tropical flower business in Hilo, www.hawaiitropicals.com.

He and his partner Bob Holt started the business four years ago, when Parente did some advertising for a Big Island flower farm and "I saw this huge opportunity for an online business. If you take a look at the traffic coming in from the Net, there are a lot of people looking for tropical flowers from Hawai'i."

Their company doesn't try to compete for Hawai'i business, because shipping costs would price them out of local markets. So they focus on the Mainland, and sales are good.

Last year, hawaiitropicals.com had nearly 550,000 Web site visitors that resulted in more than 2,700 online orders amounting to $300,000 in sales.

Verna Gomban chose an even more specific Mainland market — former Hawai'i residents who are homesick for local food, clothes and "basically anything I can ship them."

Gomban started crackseeds.com six years ago, and didn't bother going through local stores.

"The products we sell are a dime a dozen here," she said. "There's so much competition."

But she found big Mainland demand coming from the Internet.

"We started with crack seed, and now, you name it, we've got it or we'll go get it, " Gomban said. "Hawaiian music, chocolate macadamia nuts, plain nuts, huli-huli sauce, shoyu, seasonings. People on the Mainland miss things from Hawai'i so much."

Gomban gets the orders at her home in Waipahu, where she and daughter Kimberly, a 16-year-old junior at Waipahu High School, pack the shipments. Gomban's husband, Billy, an engineer with Verizon Hawai'i, picks up supplies and drives the packages to the post office.

"It's not a one-man operation," Gomban said. "It's me, my husband, my daughter. I do set my own hours, but it's basically 24/7. Orders come in morning, noon and night."

Mary McCarrick founded Island Girlz Hawaii — www.islandgirlz.com — last year out of her computer at home in Kapolei to supplement her income as an English instructor at Honolulu Community College and Chaminade University.

McCarrick was selling rare books on eBay when she saw a market for Hawai'i-made crafts, specifically jewelry. But she didn't have the time or money to open a store.

"You have to worry about rent or whether to buy a building," she said. "This way, I don't have store hours and I don't need a staff."

Hoover, of maikaihawaii.com, lost his bank job when he moved to the Mainland to care for his dying father and started over in Las Vegas as a front-desk clerk. A fellow employee who sold collectibles over eBay gave Hoover the idea for his own Web-based business.

He figures that most of his customers are former Hawai'i tourists who want one more reminder of the Islands — from those wiggly dashboard hula-dancing figurines to puka shell necklaces to 14-karat gold Hawaiian jewelry.

"I figured I could sell Hawai'i-related merchandise," Hoover said. "It gave me the idea to start my own business, and it let me move back home."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.