Overstock.com CEO says a mouthful

[johnnymk]

I got this from the latest issue of Business 2.0
Is this guy off-the-wall or not? Future owner of Amazon?

Last year was tough for retailers, but a banner season for bargain hunters -- and surprisingly good for e-commerce. Patrick Byrne, CEO of excess merchandise reseller Overstock.com, exploited all these trends to ring up a profit on sales of roughly $80 million. He'll be stalking even bigger game in the months to come.

How were your holiday sales?

We did $11 million in December. When I joined Overstock two years ago, we were doing $3,000 a month.

And compared with the year before?

We doubled 2000's sales, both in December and for the year.

Are you profitable?

Yes. That's real GAAP profit, not Amazon (AMZN)-bull****-accounting profit.

How much do you spend on your site?

Operating the site costs $300,000 a month, and we spend another $250,000 a month on marketing.

At one point, dotcom inventories were 25 percent of your sales. Have those sources dried up?

I expect Amazon to go bankrupt soon. After that the dotcoms will be pretty much gone.

Where are you getting the merchandise?

Traditional retail. The supply chain is jammed with excess inventory all the way back to the factories in Asia.

In your last job, you worked for Warren Buffett, right?

Yes. I ran Fechheimer's, which manufactures uniforms.

Buffett says he doesn't understand technology. Is that true?

He understands technology better than he lets on. He believes everyone has a circle of competence. It's important to know your perimeter.

What's the worst thing an Overstock buyer ever bought?

I personally bought 2,000 Epilady hair-removal devices for $5 apiece. They retailed for $70. I figured we couldn't go wrong. No one bought them. They're basically torture machines.

Sounds like you were outside your perimeter.

We're out of the dreck market now. We leave that to competitors.

What's your dream?

Taking over Amazon. We could make it profitable overnight.

[DoPeY5007]

huh ok :confused:



he said some strange things

[ChrisMG187]

Sounds like he's full of himself!

[Kevster]

Originally posted by chosenfool
hmmm....i guess next he's gonna go after bluelight.com, huh?

I have to admit it, but they do run a good shop. I have bought some nice things from them: Cross Country Ski boots, Backpacks, DVD player, high-end binoculars, etc. All of it has been excellent quality for about 40% of what I'd normally pay retail(with help from coupons too).

The reason he's so full of hmself may be because of the backing of reverend Buffett. Growing a small company like Overstock.com into a large and profitable enterprise in today's e-commerce market takes some real intelligence and balls.

As for Bluelight, he won't take it over, he'll just buy out all their stock for pennies on the dollar. That's what Overstock has done with everything they get. They were selling a ton of Gear.com stuff for a while.

[whitak24]

interesting guy. i always hate CEOs with attitudes, but somehow he seems endearing. maybe it's just because i've always thought that Jeff Bezos' dreams of world domination were pure evil and have wanted him to fail from day 1 (he reminds me WAY too much of bill gates).

now on the other hand, a guy who admits to buying a bunch of epilady hair-removal devices....now that's just funny!

[Merlin]

Well he should enjoy his time in thge limelight. His business model of buying inventory from distressed sellers (bascially a liquidators model) works well during a recession and during the early stages of a recovery. Did you know that more companies go bankrupt during the first year of a recovery than during the actual recession. Something about a wounded animal taking some time to die. Anyway he should have a pretty easy business to run for the next twelve months, but then when we are in more of a boom period, he'll have a more difficult time finding inventory at such firesale prices. Hell, he might actually have to work to hit his numbers. If they are looking to go public in a year or so, be careful not to be duped by numbers that have been cyclically inflated.

[Kevster]

Originally posted by Merlin
Well he should enjoy his time in thge limelight. His business model of buying inventory from distressed sellers (bascially a liquidators model) works well during a recession and during the early stages of a recovery. Did you know that more companies go bankrupt during the first year of a recovery than during the actual recession. Something about a wounded animal taking some time to die. Anyway he should have a pretty easy business to run for the next twelve months, but then when we are in more of a boom period, he'll have a more difficult time finding inventory at such firesale prices. Hell, he might actually have to work to hit his numbers. If they are looking to go public in a year or so, be careful not to be duped by numbers that have been cyclically inflated.

Remember Merlin there's always the "Ahh.. looks like Urban Outfitters canceled their order" in every supply chain and the 3rd world supplier in China/Malaysia/Phillipines/Mexico is stuck with excess stock. Granted it will be harder to find these kinds of bargains in a boom economy, but as you and I both know they are out there.

[Merlin]

Originally posted by Kevster


Remember Merlin there's always the "Ahh.. looks like Urban Outfitters canceled their order" in every supply chain and the 3rd world supplier in China/Malaysia/Phillipines/Mexico is stuck with excess stock. Granted it will be harder to find these kinds of bargains in a boom economy, but as you and I both know they are out there.

So if I read this right...It looks like you are trying to say that there is never a shortage of fools. Can't argue with that one.;) :angel: :P :king: :thumb:

[Kevster]

Originally posted by Merlin


So if I read this right...It looks like you are trying to say that there is never a shortage of fools. Can't argue with that one.;) :P :king: :thumb:

Precisely my friend :D

[Grimm]

If he is such a great business man, why didn't he just sell the Epilady devices as S&M toys?

[Kevster]

Originally posted by Grimm
If he is such a great business man, why didn't he just sell the Epilady devices as S&M toys?

:laugh: :heh: :laugh:

That thought did cross my mind too...

Maybe he's still trying to stay above that - right now he's profitable doing mainstream - he's doesn't have to go to the fringe.

woah... I just visualized Jeff Bezos modeling a "gimp" outfit for Amazon's new S&M shopping section... <shudder>

I gotta stop drinking that new tea...

[whitak24]

Originally posted by Kevster

woah... I just visualized Jeff Bezos modeling a "gimp" outfit for Amazon's new S&M shopping section... <shudder>
dude, you are now officially banned from making such disgusting comments
:puke:



hahaha :P

[Kevster]

Originally posted by whitak24

dude, you are now officially banned from making such disgusting comments
:puke:



hahaha :P

At least I got one laugh out of that.

I still like Overstock's plan - they even took a play our of Amazon's playbook and have started representing smaller vendors on their site (I sent a about a dozen 1lb boxes of Dan's Chocolates as Christmas presents to friends last year). Dan's still has their own site, but they also market on Overstock as well.

[Apex]

Bah, eventually we'll take over em both! MUHAHAHAHA!!!!!

:borg:

[Kevster]

Originally posted by Apex
Bah, eventually we'll take over em both! MUHAHAHAHA!!!!!

:borg:

:heh: :laugh:

[leemaj]

Originally posted by Apex
Bah, eventually we'll take over em both! MUHAHAHAHA!!!!!

:borg: