While most dot com companies have gone the way of stock options, a few shining stars remind us that there are still real, living, growing dot com companies. One such company is Vitacost.com.
This is the third year in a row that Vitacost.com has earned a place on the annual Inc. (Magazine) 500 ranking of the fastest-growing private companies in the country. A leading direct-to-consumer catalog and online discount retailer of vitamin, nutrition and low-carbohydrate diet products, the company ranks #303 on the list, with five-year sales growth of 586%.
Founded in 1994, the Boynton Beach, Florida-based firm carries approximately 6,000 health and nutrition products provided by nationally known brands (such as Atkins and Twinlab) as well as products developed by its wholly owned subsidiary, Nutraceutical Sciences Institute (NSI).
The CEO of the company is Wayne Gorsek, a serial entrepreneur who taught himself about natural health alternatives when he was still in high school. He decided to research natural alternatives to help his grandmother, who suffered from diabetes and high blood pressure. Ultimately Wayne’s advice on nutrition and supplements helped her, and he was hooked. After running another company, Wayne hooked up with Dr. Allen Josephs to create the fast-growing Vitacost.com.
Allen S. Josephs, M.D., is a practicing neurologist, Section Chief of St. Barnabas Hospital in Livingston, New Jersey and President of Vitacost.com. He commutes several times a year from New Jersey to the firm’s operations center in Boynton Beach, FL. Dr. Josephs is on the phone several times a day with Wayne and his management team.
For most of his life, Dr. Josephs was a die-hard “anti-vitamin” doctor. So much so that he refused to let his wife take prenatal vitamins. He met Wayne in 1992 and Wayne spent several years faxing him articles and abstracts from various journals about the benefits of vitamins. Eventually Dr. Josephs came around and is now a vitamin advocate.
Recently I spoke with the two men about what it took to create a three-time Inc. 500, dot com company. Here’s what they said:
Fisher: “What has made your company so successful?”
Josephs: “When Wayne and I sat down to create the concept of Vitacost.com, we knew we had to stand out from the competition. So we decided to provide customers with the highest quality products at the lowest prices with a money-back guarantee. We also offered product reviews through lab analysis, as well as scientific information to explain the uses and benefits of each product.”
Gorsek: “Basically, the customer is the CEO of this company. We answer to our customers – and we offer them what they want.”
Fisher: “Dr. Josephs, I know you write a weekly e-mail newsletter with the newest study information. Are you overloading people with too much information?
Josephs: “Not at all. We have hundreds of thousands of subscribers, most of whom are customers as well, who sign up through our Web site. We’ve gotten hundreds of letters and e-mails from customers thanking us for the level and depth of health information we provide in the newsletter and on the Web site. In fact, it’s one of our best marketing and education tools.”
Fisher: “Speaking of marketing, I think that’s something that Web Pro News readers would like to know about. What kind of marketing do you do?”
Gorsek: “We do both traditional and Internet marketing. So we do or have done TV and print advertising, and we spend many thousands of dollars every month on online advertising. We meticulously track all of our marketing dollars so we know how to maximize our marketing investment. We also track our cost of sales, which is very efficient with our Internet marketing, so we are devoting more of our budget to that. And as Dr. Josephs mentioned, our newsletter is a terrific marketing tool. Whenever we mention a new study that includes the effectiveness of a supplement, sales of that supplement increase.”
Fisher: “Do many of your customers buy again?”
Gorsek: “Yes. In fact, we track lots of information about our customers. For example, we have over 130,000 active customers. The average customer purchases from us three times a year. And we charge a low flat rate on our shipping. That means that no matter how much you order, shipping is only $4.95. So we have customers buying cartons of Atkins bars, multiple bottles of vitamins, etc.”
Josephs: “Margie, I hate to cut this short, but we have to run.”
Fisher: “Okay. Thanks for sharing this information with Web Pro News readers.”
For more information on Vitacost.com, visit www.vitacost.com.
Margie Fisher is the President of Margie Fisher Public Relations. Learn more about her Do-It-Yourself Public Relations Kit ™, Pay for Results Publicity Program(tm) and more at http://www.margiefisher.com/s.cgi?index-usp or contact Margie at info@margiefisher.com.