about Poolandspa.com and Long Island Hot Tubs that appeared in the
Striking It Rich Book Article -
Original Web Site information is from 1997
Updated September 2007
Years after the verdict, the specter of O.J. Simpson continues to drive traffic to a Website that sells pool and hot tub supplies...
short article called Jacuzzis and the O.J.
explains Dan Harrison, the sites owner. "The article makes the point that if
Kato had not forgotten to turn off the jets on the Jacuzzi, O.J.
would never have gone to his guest house and they probably would not have
gone to McDonalds together. This whole series of seemingly small and insignificant
events made Kato famous and helped the prosecutions case against O.J.
Simpson. And all because he left the Jacuzzi jets on!"
Such details might be overlooked by the un-tubbed masses, but spa owners find the concept riveting and continue to descend on the site to read the short piece that was originally posted in 1996.
We should probably consider this a not-so-gentle reminder of the accepted belief that even transaction sites should have high-quality content. If the content is not highly informative, then it should at least evoke a lot of curiosity
Content is certainly a non-issue for Poolandspa.com, whose 5000-page Website undisputedly makes it the "The Worlds Largest Internet Pool and Spa Store." Launched as an adjunct to their successful mail order business and physical store on tiny Long Island in New York in 1994, this Internet destination has such a massive presence it all but owns the spa supplies category online. Now with over 200,000 Web orders and over $5,000,000 in annual revenues, their claim would be hard to dispute.
Poolandspa.com (originally Long Island Hot Tubs), now located in Las Vegas, NV, has a web site that boasts a massive 130,000-item inventory which ranges from 39-cent spa knobs to $1,800 swimming pool covers. The only spa items they dont sell are the spas themselves. "I dont need another headache," Harrison confesses. "I did it for 18 years and I dont have the stomach for it anymore."
While he doesnt care to focus on the component that drives the rest of his business, he does pay more attention to his spa category than pool supplies because he has found it to be a more profitable segment.
"Spa customers are more valuable than pool customers because there are tens of thousands of pool stores and this is in addition to Home Depot where they can also get pool stuff," Harrison explains. "There are only a couple hundred spa-only stores in the U.S. Its a very niche market. Also, spas are year-round and pools are not. So they need more chemicals and parts, and, since they are electronic, they break down more," he adds.
With less competition, Harrison has room for higher profit margins. Mark-ups of 100400% are not unusual, partly because these are highly seasonal products. A $200 chemical order can yield a $140 profit. Parts have the lowest profit margin at 100%. Furthermore, Poolandspa.com does discount. "Our prices are reasonable," Harrison maintains. "Other sites charge about the same."
Combining spa supplies and the Web makes a lot of sense when you consider the clientele. According to Harrison, the typical spa owner is over 35 and earning a minimum of $66,500 annuallya demographic consistent with the online world.
Poolandspa.com is in an enviable position because so few stores carry spa parts. They have an extensive inventory, which is detailed in over 5000 Web pages complete with line drawings so that customers can easily identify what they need.
In 1997, despite the less erratic nature of hot tubs, Harrison still sees seasonal spikes in his online business. During the 1997 season, his site averaged 400600 visitors per day, 4,000 page views, and at least 30 orders. Off season, those numbers are about halved. Though he consistently grosses more than $10,000 per week, these seasonal shifts make it difficult for him to estimate an "average order" amount, but, if forced, he settles on the figure of $80, with the caveat that $30 orders can be as common as $1,000 orders. Then, of course, there are the occasional mega-orders.
In 2007, his site averaged 20,000 - 30,000 visitors per day, 500,000 page views, and at least 200 orders.
"We got an online order for 50,000 rubber ducks. The customer was using them for a charity duck race," he explains. "They number the ducks and people get to buy one for $5. They put all the ducks in a river and the one that gets across the finish line first wins a truck." This $60,000 order has been Poolandspa.com's biggest and required them to import containers of yellow duckies from Taiwan to fulfill the request. Thank heavens for drop shipping.
What has greatly benefited Harrison is that he is less myopic than most who have a catalog and a Web presence. While most mail order folks migrating to the Web dream of eventually dumping their print catalog and converting to a totally digital medium, Harrison is pumping his mailing list. He sees a profitable union between the two and an important cycle inherent in an offline catalog and a Web presence. They feed on each other, creating a profit vortex.
For example, mail order sales for Harrison are boosted bimonthly via his paper newsletter Poolandspa.com Catalog Newsletter (formerly Hot Tub Life). In his first 17 years of business, he accumulated 2,000 names. In 1997, via the Website, he added 5,000 more. In 12 months he was able to add more than two and a half times what previously took him 17 years to build up.
In 2007, after 27 years in business, his customer list is well over half a million!
Even though Poolandspa.com's Website grossed mid-six-figures in 1997 and now over $5M annually, Harrison considers his biggest success to date these newsletter signups. "Mailing lists of hot tub owners are not available for sale," he explains. "Pools require permits, so list brokers can get names that way. Without the Web there would be no other way that we could have grown our mailing list like this."
Because his sales are seasonal and cyclical, accounting for what is motivating sales is difficult to measure. "People find us online, sign up for a newsletter or catalog, and then a year later phone in an order. It is really hard to track," Harrison explains. Of one figure he is certain: His repeat business rate from the Web exceeds 80%.
Regardless of the interactivity of the site, according to Harrison, even if a customer does all his online research on the site, over 90% still call in their orders to the companys 800 number. Despite highly detailed information on his pages, people still need and want more data. "We are not selling tires," Dan points out. "We are selling spa stuff and many people dont know what they need or want, and they have to call."
In 1997, Poolandspa.com did not use any shopping cart technology. This means that customers must jot down product numbers or print out pages to refer to when completing the static order form, a process that is incongruous with the convenience of Web shopping. "To date we havent added a shopping cart because I was my Internet service providers only client who needed one," Harrison explains. "Customers were calling and complaining. So I am paying to have the software installed."
Now in 2007, Poolandspa.com uses the top of the line Shopping Cart Technology and secure servers for all of their transactions. Funny how much things change in 10 years!
Besides customers who call, others e-mail. "In season, we get at least 500 e-mails a day," Harrison sighs. "Our New Years resolution for this year is to try to answer all the e-mails every day. This year we were not able to do that. During the busy season, there were times when people had to wait up to two weeks for a reply. There was just no way that we could keep up."
"Obviously we always pull out the online e-mail orders daily and process those items right away. But the Ask the Pool Guy and Ask the Spa Guy e-mails would mount up at times."
Part of this is due to a smart move rarely seen on most Web-sites. In addition to securing new customers, posing a question to the Spa and Pool Guys virtually ensures a new mailing list entry, since folks are encouraged to give their physical mailing address information via the form they are using to pose their questions.
What is so incredible is that, despite the fact that he has built up this snail mail list, he did not service his e-mail addresses in 1997. "I have all the addresses and will start servicing the list when we have the time to devote to it, but it simply has not been high priority," Harrison acknowledges. "This whole Internet thing took off much faster than we had thought. We were simply unprepared."
Now in 2007, email marketing has become one of the most powerful advertising tools we use.
Most of Poolandspa.com's new customers come from search engines. In 1997, about 50% specifically coming from Alta Vista. Now in 2007 over 90% come from Google.
In 1997, you can imagine the impact it had on Harrison when Poolandspa.com was temporarily pulled from the Alta Vista database. As Harrison told an Internet trade publication, being cut from Alta Vista had catastrophic results. "Our revenues were likeboom!cut two-thirds for two weeks."
According to Harrison, in April 1997, Poolandspa.com was wrongly accused of "spamming" the Alta Vista search engine and was stripped from the search services database. Essentially, no search results could reference Poolandspa.com. It was as though the site did not exist. Alta Vista claimed Harrison was removed because he submitted too many pages containing the same kinds of words. That may have been the case, but the removal was done unbeknownst to him.
When Harrison launched his mega site, he used a popular submission service called PostMaster, which he ironically found via the Alta Vista homepage. One of the services PostMaster offered was "deep submit," which individually submits each page of a site to all the search engines. The benefit to the site is that, the more individual pages (and their unique URLs) are listed, the better the chances are that their site will get listed higher up and more often on a results page.
"Since our site contained over 400 pages of pool and spa information and products at the time in 1997, it stands to reason that our site would appear very frequently in Alta Vista when someone searched for pool- or spa-related terms," Harrison recounts. "Unfortunately, when someone from Alta Vista was reviewing their listings, they decided that we were illegally spamming them when, in fact, we were merely using a submission service listed on their service.
What bothered Harrison most was that "as a judge, jury and executioner, they deleted all references to our site." Apparently repeated attempts to explain why Poolandspa.com felt they had been "wrongly accused" failed and, after some trade press, were eventually handled.
Poolandspa.com has since been reinstated, but the memory of the Alta Vista debacle still irritates Harrison. "I wish that there were some sort of governing body that a company could turn to if one has problems with a search engine. Our experience with Alta Vista showed us how much ultimate power they wield and how strongly they affect Internet commerce all according to their unregulated whim."
Fortunately many years later, typing in "hot tubs" still finds Harrisons Web shop in all the top positions. All is well.
In 1997, web advertising was very different. Harrison was so dependent on search engines partly because his advertising experiences had not fared well. He spent $2,600 advertising in offline pool magazines before he gave up on that venue, and another $5,000 on local cable TV touting the Website, which did not work either. Since the search engine results listings rank him so high, keyword buys make no sense. In other online advertising opportunities, Poolandspa.com became a Link Exchange member but stopped after 2.5 years and dismal results.
"The Link Exchange banners were slowing down our page loads, and we were only able to attribute a pathetic amount of traffic to them. Out of the 600,000 banners our site served, we got maybe 100 click-throughs from reciprocal ads."
Despite infinitesimal click-through rates, Harrison had a more pressing consideration, making his pages work for the least powerful technology "I wanted to give priority to the speed that it took my pages to load," Harrison notes. "I wanted people at 14.4 from AOL at peak times to be able load our site."
America Online members are critical to Poolandspa.com success, with over 50% of their visitors originating from the service.
My how things have changed. Now in 2007, online advertising goes hand in hand with Poolandspa.com's catalog mailings, search engine paid placements and advertising on other web sites. Now with broadband internet, the speed at which pages load is rarely an issue no, Harrison says.
In addition to the AOL considerations, from the moment Harrison launched his online enterprise he has been virtually obsessed with his sites design and functionality. While most online catalogs with the depth of Poolandspa.com would be database-driven, Harrisons is not. Today, most large sites use database technology which creates pages in real time. Harrison s pages, on the other hand, are separately designed and programmed. This means that if Poolandspa.com wants to make a change that would appear on every page, it has to be programmed 400 times.
This explains why any changes are such a Herculean task. During the off season, we have three people who spend all day and all night working on the site." When Poolandspa.com (Long Island Hot Tubs) was launched online in 1994, their site was 150 pages deep. It took over six months to plan, develop, and program. Harrison estimates that, if he had contracted it out, it would have easily cost him more than $100,00
Now in 2007, the whole site is, in fact, database driven, but still takes 3 people full time to update all the products and content we provide.
"Our site started early in the history of the Web back in 1994. We couldnt even do intersite searches at first," he explains. "But we are rebuilding the site from the ground up, and were on track to completely reconfigure how we are approach this."
Regardless of the backend technology within months of his launch he started winning awards. To date Poolandspa.com and Long Island Hot Tubs have earned dozens, including the National Pool & Spa Institutes Consumer Influence Award for Best Pool & Spa Retail Web Site, Best of the Best on the Web award, Aqua 100 Hall of Fame Award, and a Top Internet Shopping Site seal.
Many of the awards are attributed to the sites content, which is divided into various sections including Hot Tubs & Spas, Pools and Home Service, and the Java Gaming Center, the latter of which includes non-aquatic categories like blackjack and biorhythm charts. The site also features messages boards and chat.
"The more things on the site that are fun and interesting, I figure the more that would keep them coming back," theorizes Harrison. "Actually under 5% play the games."
While visitors might not be playing games, Harrison figured that surely they would be interested in live chats and message boards, but he was wrong back in 1997.
"In 1997, I truly thought there would have been more activity on the message boards. A lot of people read them, but not many post. In eight months we got a couple hundred messages, but based on the thousands of visitors we get, this was really low. We realized that because we have the Ask the Pool Guy and Ask the Spa Guy areas there isnt a whole lot of reason for people to post on the boards. If I am having a traumatic spa problem, I would prefer going directly to an expert than depending on the advice of someone I dont know."
So to get right to an expert, Harrison launched weekly chats, but these didnt fare well either. Harrison announced Ask the Spa Guy Live with announcements on Poolandspa.com's five most active pages and even offered discounts during the chats. This results were disappointing. "At the peak of it we had six people in the six-week trial run. When people want info, they want it now; they are not going to wait for Wednesday," he explains. But there was a bright spot. "The people who did come were prepared with great questions and they loved it. Ill never forget the woman who finally got her foamy water questions answered."
What Dan Harrison may have also learned is that simply posting notices on a few pages on a site, without follow-up reminders the day of the event via e-mail, may be expecting too much pro-activity on the part of customers.
Obviously now in 2007, message board, chat rooms and blogs are very popular, and The forums at Poolandspa.com are now very much used by his web visitors every day.
One area where Poolandspa.com business is bound to expand is the international market, which currently accounts for only 1% of their sales. However, his first foreign sale was promising, a $1,500 spa equipment pack to Norway.
"The U.S. is in the forefront of spa equipment and sales account for 75% of the world market, mostly because the manufacturers are in the U.S. For this reason we get a lot of e-mail from places like Malaysia and India, and a place called Yap or Yop, looking for basics like chlorine."
To some degree Harrison must have been a bit psychic. He started on CompuServe a couple of years before he saw the Web. In late 1994 he produced a catalog on disc before the launch of Poolandspa.com (Long Island Hot Tubs) in June 1995.
"Back then, it was too expensive to print a color catalog and we knew that we were not presenting our products in the best light," Harrison explains. "We found a program that lets you place all your products with full-color pictures on one floppy. In 1997, we have had about 800 requests for the disc catalog delivered by postal mail and about 300400 people a month download it off the Website. It includes an order form. So we know that people with the disc order more than those who dont have the disc."
Now in 2007, catalogs on CD are a thing of the past and Internet and catalog sales account for most of Poolandspa.com's revenue.
Perhaps because of this disc experience, Harrison knew when he started hearing about the Internet it was the answer to expand his spa chemical and accessory mail order business nationwide for a very small investment, since national advertising was prohibitively expensive back then.
While he practically had a lock on the spa supply online category, Harrison is cognizant of the competition, especially if the Web sees a launch by Leslies Pool Supply, a national retail pool store with around 400 stores countrywide. "This could hurt the chemical end of my business," confesses Harrison.
While their presence could make a dent in Poolandspa.com's sales, Harrison also knows that there is plenty of business for everyone. When we first started, our hope was that we would get a few new customers and increase our mail order. We clearly underestimated the power of the Web. I cannot even begin to imagine how big this is going to get once 50% of the U.S. gets online. Just the thought makes me want to go pick out a Ferrari!"
Now in 2007, we have seen those futuristic prophecies come more than true. Harrison was truly a pioneer in the field of e-commerce and will always be remembered when they write the history of the internet for the pool and spa industry.
Read the Update Article about Long Island Hot Tubs from March 99