From hospital CEO to Captain of a dot.com 'virtual Commerce Port,' MershantsBay.com's J. Troy Pappas sees rising tides of fortune ahead for his Mt. Laurel-based cybermorph
MT. LAUREL,NJ-- When the Republican National Convention arrived in Philadelphia on August 3, MerchantsBay.com earned a coveted slot as one of only 70 companies selected to sell to conventioneers at Politicalfest. "We were one of the few NJ-based companies and one of only two pure dot.coms," said J. Troy Pappas of Mt. Laurel, the company's CEO and so-called Captain. Quite an honor for a company whose newly tested and renovated web site had only launched three days earlier on August 1!
It may have been his gourmet dog biscuits shaped as Republican elephants that caught the attention of conventioneers and media outlets such as NBC10 and 6ABC but the former New Jersey hospital executive hopes that it's his "hard work, solid business plan, and research mixed with showmanship" that will spell long-term success.
Describing himself as "part Edison, part PT Barnum," Pappas labels his company a "cybermorph -- a hybrid between a wholesaler and retailer."
He explained, "Other dot.coms carve a niche as either a business-to-business or business-to-consumer vendor. A cybermorph, simply put, is an e-commerce company that can be an "e-tailer" to one customer and quickly switch to be a wholesaler to another. The web programming we've developed enables us to switch rapidly to serve the merchandising, pricing and service needs of both B2B and B2C markets."
In just its first full year, MerchantsBay.com has become a leading online specialty merchandiser with a buyer base in all 50 states, Canada and Europe. The company's distinctive calling card consists of a large variety of unique, quality products -- more than 1,000 selections in 20 product and service categories ranging from office supplies to long distance phone service, collectibles and home décor. He sells these products via real-time, volume-dependent price negotiations and innovative use of streaming videos that help customers shop more interactively.
"We're significantly different from vendors like Priceline.com," he explained. On those sites, you propose a price, they take your credit card number and, if they match your price, you're locked in -- even if the availability or convenience of the item are not exactly what you want. That's not how most people like to do business. Because we know that life's negotiable until the final handshake, so to speak, we never take the money up front. Our technology for this is really different and new.” It’s so novel that MerchantsBay has applied for a patent on its online negotiations.
MerchantsBay.com customers, he explained, propose a price and quantity, then the online program assesses the offer and negotiates with the buyer in real time until a mutually agreeable deal is cut. Both parties have the chance to say yes or no. Obviously, if someone wishes to buy a single item, there'll be less room for price flexibilty than if someone wants a truckful. We allow wholesale and retail customers to propose a fair price and negotiate it." The fact that we can accommodate both makes this a true shopping channel for all buyers. "
That's not to say that MerchantsBay.com is the cheapest price around. "We pride ourselves in finding distinctive merchandise from a select group of merchants. Our products are unique.“
The company has also embraced a customer-friendly use of broadband video streaming. Where other online vendors might show a static photo of a product, Pappas' customers may click and preview product presentations before making buying decisions. “Our goal for the streaming videos is to compliment the customer’s online shopping experience. We want the videos to be informative with a production quality somewhere between Antiques Roadshow and QVC”.
Pappas said, " Online shoppers can't taste and touch, but they can see. We keep finding new ways to make the experience more interesting for our customers. When they're considering one of our food products, for example, they can click for cooking lessons using product recipes. When they're considering the purchase of an educational toy, they can see a video about how easy and fun it is to use."
Pappas became interested in the Internet after listening to “The Small Business Report” on WCBS, a radio station in New York City. Pappas originally conceived the company as a virtual community of local Rhode Island merchants in 1996. It was a part-time venture he fit in and around his full-time management duties at Blue Cross Blue Shield of Rhode Island. The media attention it garnered convinced him it was an idea "ahead of its time." He had to put the project on hold in 1997 when he was tapped to be the CEO of a hospital in Marlton, New Jersey. “MerchantsBay was getting a lot of media attention, but I was just married and the CEO opportunity was too big to pass up.” With the healthcare climate unstable, Pappas – after 16 years in the field – left his executive position in 1998 and made the leap to full-time commitment in MerchantsBay. "But not before I spent nine months learning how to sell off-line and scouring craft fairs, street festivals and wholesale trade shows for distinctive products and small companies seeking a broader, cutting-edge distribution channel for their wares." After his self-imposed study period, Pappas said, "I bundled my insights, expanded the product line, and renovated the site."
MerchantsBay.com is one of a dozen start-up entrepreneurial ventures "enrolled" as a virtual tenant in the Burlington County College High Technology Small Business Incubator at 900 Briggs Road on the College's growing Mt. Laurel Campus. The Incubator affords Pappas and other tenants a business address and services, low overhead, along with a College mentor for guidance in developing a business and marketing plan, and cultivating investors.
In seeking out investors that are the lifeblood of new ventures, Pappas cites MerchantsBay.com’s novel bottom-line oriented business model, his strong business education (degrees from Bucknell and Yale) with more than 15 years of executive and marketing experience. "I've also spent time studying what the failed 'big-boy' dot.coms have done wrong."
"Many of the dot.coms that failed or are having trouble didn't take the time to do their homework or learn what their customers wanted. Many were pure marketing plays that tried unsuccessfully to build a viable business. Some built large inventory intrastructures. They quickly overextended themselves. Customer acquisition takes time and is built on strong customer relationships and service. We value our very high satisfaction comments from customers. They like our products a lot and frequently will recommend us to new buyers. We also avoid the expense of inventory management. To stay on top of labor costs, MerchantsBay uses outsourced talent from our strategic partner network." he said.
MerchantsBay.com will be one of __ high technology fledgling companies featured at the New Jersey Incubator Showcase on September 18 in Morristown, New Jersey where he hopes "investors will like the potential they see in us, and sail into our commerce port of the future."
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