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Cymax Stores: The Little Online Furniture Shop That Could

Finding a quality television stand on the Internet should be pretty easy in this day and age of Google (Nasdaq: GOOG) and Amazon.com (Nasdaq: AMZN), but back in late 2003, it wasn't.

Especially if one lived in Vancouver, British Columbia, like e-commerce entrepreneur Arash Fasihi did.

"I wanted a high-end BDI TV stand," Fasihi told the E-Commerce Times. "I was able to find it online, but no one would ship it to Canada."

That's because even as late as 2003 -- years after Amazon.com and other e-tailers started shipping consumer goods all over the world -- Canada was still far behind in its e-commerce evolution. Most Canadians didn't buy their furniture online.

That gave Fasihi, a 33-year-old Iranian immigrant, an idea: Create an e-commerce Web site that would let Canadian consumers easily find and purchase furniture and other items online.

It didn't happen. Here's what did happen, though: Fasihi and his wife, Shima, 27, started Cymax Stores, which sells bedroom, office, living room and entertainment furniture.

This year, Cymax will bring in about US$48 million in revenue, Fasihi said, with 99 percent of that coming from customers in the United States.

One Web Site

Fasihi, who has a computer science degree from the University of British Columbia in Vancouver, launched the first Cymax e-storefront in 2004. Today, the company has 115 e-storefronts and about 100 employees. Cymax's e-storefronts offer consumers more than 250,000 items.

By the end of 2008, Fasihi expects to have a total of 200 e-storefronts that will bring Cymax into new retail segments such as consumer electronics, baby products, outdoor furniture products, kitchen and cookware products, and home appliances.

The company is also looking to open a 20,000-square-foot warehouse somewhere in the eastern U.S. to streamline the procurement and fulfillment processes.

However, getting Cymax launched back in 2004 wasn't that easy.

"It was easy for me to create the Web site," Fasihi said, "but getting the shipping and fulfillment stuff done was hard because we're a Canadian company."

Fasihi recounted one instance early on, when one of Cymax's furniture suppliers wouldn't open an account for the startup because of its Canadian address.

"So, we had to open a cash account where we paid in advance for our inventory, and we wired them money every week," he said. "After a few months, they gave us a credit line. It happened that way at the beginning with everyone. It got easier as we built a credit history."

Today, Cymax has relationships with furniture factories and outlets that make it much easier to get consumers the products they order on time, Fasihi said.

Not Another Amazon

What sets Cymax apart from e-tailing behemoth Amazon.com is its large group of different e-storefronts. Amazon.com employs a similar strategy but to a much lesser extent. For example, Amazon.com has an online storefront for shoes called Endless.com, whereas Cymax has its 115 different storefronts.

"It's like a roll-up strategy where someone buys a bunch of bricks-and-mortar furniture stores to get a broad footprint out in the marketplace quickly," Sucharita Mulpuru, an e-commerce analyst with Forrester Research, told the E-Commerce Times. "[Cymax] is conglomerating all the traffic going to these various sites while using the same back-end infrastructure in the hope it can get more online real estate."

NetShops.com, Niche Retail and CSN Stores all employ the same strategy as Cymax, thus making them closer competitors to Fasihi's small company than Amazon.com.

However, the way Cymax differentiates itself most from its competitors -- including a giant like Amazon.com -- is by offering premium selection and customer service.

"I don't think there's a whole lot of value in being the cheapest," Mulpuru said. "Selection is the big value proposition online, and service is a big consideration, especially for furniture. It's important to provide rich customer service, telephone service, catalogs and guarantees that there will be reasonable delivery time frames."

Amazon.com, Mulpuru said, isn't going to do any of those things.

"Amazon usually defers to their inventory partners when there's a customer service issue," she said.

Amazon.com has a customer service line, Fasihi noted, but "there isn't any way for customers to call in and get specific information about products on Amazon because it has so many sites that sell products through the Amazon site."

Cymax, on the other hand, has an active customer service line, and Fasihi said his employees know which products they are responsible to know front and back.

It's Not Easy Being Small

Even with an expected $48 million in sales this year, Cymax is small compared to its competitors, Forrester's Mulpuru said.

"In the Web world, [$48 million in sales] would put them in the top 500 retailers," she said. "It's not tiny, but it's not significant either, in terms of some of the enormous e-tailers out there today."

One of Cymax's biggest challenges is making itself heard over the din of other e-tailers in the marketplace.

The startup spends "millions of dollars" every year on pay-per-click and sponsored search terms on search engines like Google and Yahoo (Nasdaq: YHOO), as well as other major shopping channels, Fasihi said.

A recent search under the terms "TV stands" and "beds" on Google brought up results that link to Cymax-owned stores -- Bedroomfurniturenmore.com and Audio-Video-Furniture.com. Those results appeared at the very top of the results list.

"We keep close track of the keywords people use to search for products on Google," Fasihi said.

Meanwhile, Fasihi hasn't given up hope on the Canadian market, even though it accounts for just a fraction of sales at Cymax today.

"The Canadian market will be a big market for us, and we think it will gain in market share," he predicted.