bowlin

TIME MAGAZINE

TIME DIGITAL SECTION: E-CONOMY/MOVERS AND SHAKERS--BUSINESS TRENDS--STOCKS/; PROFILE: LYLE BOWLIN; Pg. 58

LENGTH: 787 words
DATE: October 4, 1999

HEADLINE: Get Rich Slow;
Making headlines boosted his online bookshop, but a professor finds that succeeding in e-commerce is an uphill battle

BYLINE: Mark Francis Cohen

BODY:
The idea that you could roll off your couch this weekend, turn on your computer, create an e-commerce site and go toe to toe with Amazon.com is inherently appealing--which is perhaps why the story of Lyle Bowlin made the New York Times. In April 1998, Bowlin, 46, director of the University of Northern Iowa's Small Business Development Center, decided to launch his virtual bookstore, Positively You (www.positively-you.com), from the spare bedroom of his Cedar Falls, Iowa, home.

It was a low-cost operation. Each month he paid $ 30 to an Internet service provider for website hosting and $ 20 to a secure server that processed credit-card transactions. His original idea was to sell motivational books (hence the name) to executives, but Bowlin quickly branched out. He began to sell consumer hardcovers and paperbacks once he discovered that his distributor--which also supplied Amazon.com--would give him the same discount as long as he bought at least five copies of a title. His wife Linda handled the shipping and his daughter Amy the accounting, both free.

"By November, we were making a profit!" Bowlin says.

It was a compelling story. Bowlin--whose father died of lupus and who had to drop out of Cornell University to help support his family by working at a grocery store--was an ideal Internet hero. He was even underselling Amazon.com by a few dollars on selected books and giving 10% of the book price to verified charities upon request. The charity hook was his comparative advantage, and Bowlin forged relationships with nonprofits, which encouraged their supporters to buy books from his site.

Bowlin's saga captured people's imagination, and this winter it got prominent play on the op-ed page of the New York Times. Columnist Thomas Friedman held up Bowlin's case as a perfect example of why Internet stocks are overvalued: "So the next time your broker tells you this or that Internet retailing stock is actually worth some crazy multiples, just think for a moment about how many Lyle Bowlins there already are out there, and how many more there will be, to eat away at the profit margins of whatever Internet retailer you can imagine."

Positively You thrived in the limelight. Around 140,000 people had visited the site by noon of the day the Times piece appeared. Bowlin says that within days, his sales exploded from $ 1,000 a month to $ 2,000 a day.

But 15 minutes of fame later, how's he doing?

Not so well, from the sound of it. Life in Net commerce isn't simply a matter of hanging out your URL and waiting for the world to beat a track to your Website. Problems abound. Bowlin estimates that he will be lucky to earn $ 65,000 this year, which is just about the amount he was hoping to earn before the New York Times changed his life. Also, since he has to buy at least five books to get a discount, he has to sell all five to make money. That may work with current best sellers, but what happens when someone orders a less popular book and Bowlin can't sell all five?

His costs have continued to rise. He's been leasing warehouse space for his book inventory and shipping operation, and has hired a full-time employee, four part-time people and a publicity and marketing consultant. Bowlin estimates that his monthly expenses have increased from $ 150 to $ 2,840. And that doesn't include such things as shipping materials, wear and tear on his home, computer investments, supplies, electricity and his or his family's labor. At the same time, sales have fallen off to $ 1,500 a day.

Finally, $ 65,000 a year wouldn't be a bad living, but Bowlin has to turn over a third to his partner, Lori McConville, a public relations consultant who helped come up with the original $ 2,000 seed money. The next Jeff Bezos? Hardly.

Experts say Bowlin is going to have a tough job staying afloat. "He's not going to be able to compete without large investments in capital-intensive infrastructure," says Ken Allard, a senior analyst at Jupiter Communications.

Bowlin admits that most of his repeat customers are those interested in contributing to their favorite charities and not those who have come to the site because of the publicity. Since ease of use and customer service tend to draw people back to a site, Bowlin's hesitancy to invest more in the site's design could hurt him in the long run. But the bookseller is unbowed. He's taken his story on the road, telling people how they too can make a mint on the info superhighway.

And he sees ways to expand. "We may add CDs," he says. "I would never have built the business to what it is now if lightning hadn't struck with the New York Times article."

Mark Francis Cohen has written for the New Republic and New York magazine