DrillSpot.com's Blog

By Elizabeth Gold (originally posted in the Boulder County Business Report), Image by Liz Wise

BOULDER - At 12 years old, Paul Lin began his career as a computer consultant. Today he’s 70 percent owner of an e-retail company that earned more than $10 million in revenue last year.

And he’s still under 30 years old.

Lin’s company, DrillSpot.com – an online hardware store – took its place in the $150 billion home improvement industry in 2005. Revenue for December 2009 reached $1.2 million – a 49 percent increase over December 2008. Additionally, the company increased its overall revenue by 39 percent for the year.

DrillSpot’s headquarters are on Arapahoe Avenue in Boulder, and it maintains a product warehouse in Denver.

“We went through a few companies before DrillSpot,” Lin says. “One was a facilities maintenance company where we’d negotiate to use the logistics of other companies and market their goods. That’s what led us to DrillSpot.”

He compares his company’s business model to Expedia.com and Travelocity. DrillSpot aggregates product data from the home-improvement industry and sells the wares online in similar fashion to how those companies collect data and sell travel-related services.

“People look at the Internet as a place for price savings,” he explains.

Funded with $1.1 million family angel investment funds, Lin shares ownership of DrillSpot with his father, a silent partner.

The company currently offers about 360,000 products. “This year we’re hoping to bring another 200,000 products into the Internet marketplace that have traditionally only been available by catalog,” Lin says. 

DrillSpot’s current top selling items are Honeywell thermostats. 

How does the company choose which products to carry? “The same way United (Airlines) determines its routes – demand of marketplace,” Lin explains. Manufacturers obviously stay on top of that research to keep their merchandise moving.

Lin believes the company’s conversion rate and ongoing site navigation refinements are top contributors to increasing revenues. 

DrillSpot’s rate for converting traffic to customers increased by 63 percent in December 2009 compared with December 2008. He points to simplifying the check-out process and flipping the order of fill-in-the-blank-information questions as reasons for the increase.

“Usually people are asked to first fill in their billing address and then the shipping address,” he says. “We started asking them for the shipping address first, and that alone increased our conversion rate by 30 or 40 percent.

“It’s more of a psychological commitment when they put their shipping address first,” he adds.

Lin quotes from a case study in “Predictably Irrational: The Hidden Forces That Shape Our Decisions” by Dan Ariely as the source for another business direction.

The study asks people if they’d choose one brand of chocolate over another if the finer brand cost about 25 cents and the other a penny. Sixty percent went for the top brand. When asked which they’d choose if that brand was the same 25 cents and the other one free – the results flipped: most people chose the free chocolate.

“People gravitate to free,” he says. “Right now we offer free shipping on about 75 percent of our orders. Our goal is to reach the point of always offering free.

“Another goal is to get products in customers’ hands within 24 hours,” he adds. “Right now in some cities when people order by 11 a.m., we can get it to them by 5 p.m.”

How? “We look to see what items are available where and access local couriers for same day delivery.”

To additionally increase traffic and buyers, DrillSpot focuses on techniques for streamlining navigation on its site. Those steps include making categories more logical and studying the kinds of keywords people type in when searching online. 

Four of DrillSpot’s 17 employees also keep an eye on where the company shows up in Google search rank order since the ranking changes every day.

The task pays off. When using Google to search Lithonia, a lighting company, the search engine brings up 1.6 million results. DrillSpot.com shows up in the No. 6 spot. 

Lin models DrillSpot after companies like Newegg.com, an online technology retailer, and Zappos.com, an online shoe and clothing shop. “Newegg made its first billion in sales between 2000 and 2004 and another billion 2004 to 2008.

“At the point of making $1 billion, a company is successful. It’s the amount that’s standard to achieve success for an Internet company.”

When does he project they’ll make that mark? “That’s a little too far out at this point. Our goal right now is $100 million. We want to see that in 24 to 36 months.”

Ok so 2 of those 3 statements are correct.  It has been over a year since we have moved into our new offices in Boulder, CO, but it took us this long to update/design/order/print/receive our brand spankin’ new business cards.  I, for one, think they are awesome and wish more people would have their picture included with their contact information on their business cards.  Adding that small little detail would be great for someone like me that has a hard time putting names to faces.

The first day we got these cards, we were all running around the office exchanging our cards with one another like they were baseball cards. Since these cards are so unique to every person, they have become collectibles. We are lucky enough to have an in-house photographer who was able to capture each employee’s personality with just one photo. These business cards have become more than just a way to exchange contact information. They start to tell you who we are.

Not that our old cards were not nice also, but I am definitely looking forward to giving out these new cards to watch people’s reactions!

Just to give you an idea of what a change this is, here is an example of my new card:

And here is my old business card:

What do you do when you are craving a steak for lunch, but it is snowing and you do not want to go somewhere expensive? Well if you are Paul (our CEO), you go out, buy some steaks and grill at the office!

Yesterday it snowed in Boulder all day long, but that didn’t stop Paul and Shad from using my Weber Q120 Grill and grilling up some steaks, zucchini and building miniature snowmen.

They were nice enough to share with everyone else at the office, and let me tell you, it was a delicious as it looks!

Photos via Liz (our amazing in-house photographer).

BOULDER, Colo., Jan. 5 – DrillSpot.com’s December revenue reached $1,205,468, a 49% increase from the same time period the previous year. December closed out a banner year for the company which, at $10,754,617, broke the $10 million benchmark in yearly sales for the first time ever. Revenue earned by the company in 2009 was up 39% over 2008.

DrillSpot.com, which specializes in hardware and home improvement supplies, credits its ever-increasing sales numbers to a strong conversion rate; conversions were up 63% in December 2009 compared to the same month a year earlier.

The company’s implementation of marketing strategies mixed with its great customer service and fast, often free, shipping have created a recipe for success. Add in DrillSpot.com’s on-going refinements to its site navigation and the result is a loyal customer base. In fact, the site’s return customer rate rose from 6.7% in 2008 to 10% in 2009.

CEO Paul Lin expects the company to continue to grow in the coming year. “DrillSpot is working hard to bring another 200,000 to 250,000 products into the internet marketplace that have traditionally only been available by catalog,” said Lin.

With over 360,000 products, DrillSpot.com sells a wide variety of home improvement and industrial supplies. Products range from Fluke meters to Broan fans, and include well-respected brands like White Rodgers, Starrett tools, Extech meters,Milwaukee tools and Honeywell thermostats.