From Business Failure to Multimillion-Dollar 'Green' Niche
Marty Metro loved the idea of buying something used and selling it for a bargain. He had watched resale shops do it successfully for years with everything from clothing to sports equipment. "EBay became a $10 billion company selling something used cheaper than new," says Metro, a former IT consultant for Fortune 500 companies.
But when Metro saw a moving truck loading boxes during a cross-country drive in the late 1990s, he recalls talking to his wife about how difficult it is for people to get rid of boxes after they’ve moved. "They break them down, tear them up, but they still don't fit in the recycling bin," he said. That casual conversation ultimately inspired him to leave his lucrative tech career in corporate America and strike out on his own. Metro's idea was to connect people who have used boxes to those who need them. At the same time he'd keep a lot of cardboard out of America’s landfills and help the environment.
While Metro passionately believed in the concept, little did he know he would first fail miserably at retail and sink deep into debt before turning it all around. He would have to recast his eco-friendly idea and create innovative technology to help him ultimately build a nearly $10 million business.Still, there were five years of hard lessons learned along the way. Metro's journey is one of inspiration, innovation and perseverance, which all small-business owners can learn from.
In 2002, Metro got his start by founding Los Angeles-based Boomerang Boxes, a retail store that sold used cardboard boxes, primarily to people moving into new homes and apartments. His father, a CPA, was skeptical, saying, "You're going to have to sell a hell of a lot of boxes to pay your rent."
It turned out dad was right. Selling $1 boxes out of brick-and-mortar locations didn't quite pay the bills. By 2005, Metro was forced to shut down Boomerang Boxes' four locations. Consumers appeared to love the idea, but the company was losing $15,000 to $20,000 a month and wound up $300,000 in debt, which Metro is still paying off today.
Still, Metro refused to give up. He started working on a plan to sell used boxes online, but in a unique way. "Historically, no one really sold boxes -- let alone used boxes -- online," recalls Metro, now 40. "They were too expensive to ship, so most people just went to a retail store (and asked for their discards.)"
But in 2006, he secured $300,000 in venture capital to build an online store called Usedcardboardboxes.com. Metro's distribution centers -- owned and run by third-party logistics teams -- make shipping more efficient and inexpensive since they're strategically located across the country near the major cities of Los Angeles, Salt Lake City, Phoenix, Dallas, Atlanta, Chicago and near Syracuse, N.Y. The company also owns and operates its own facility in Baltimore.
By 2008, Usedcardboardboxes.com had grown to $1 million in annual sales and demand was quickly beginning to outweigh supply. Metro needed more boxes, so he started buying and selling used boxes from national companies, expanding his customer base beyond consumers.
For Metro, the greatest challenge then became tailoring his used offerings to specific needs. When a company requests a 12-by-12-by-8-inch box, for example, nothing else will do. That's where his tech expertise has come in handy; Metro developed custom software that automatically matches what companies need with what he has access to.
If a company needs 100,000 boxes, that information is put into a database that checks what boxes are available, the cost to ship them and the price Metro has to charge to make a profit. His IT staff updates the software and improves it almost daily. "It is very much the core of our success and a major factor in our future," he says.
Metro's software and monitoring system includes a business-to-business portal that offers big companies the option of viewing real-time inventory and ordering directly from the distribution centers.And he can access data from each distribution center right from his computer -- or even his phone -- which allows him to quickly identify and manage any issues or problems as they come up.
Electronic Recyclers International, which recycles computer components and other e-waste, has been a customer for three years. Chief executive John S. Shegerian says buying used cardboard boxes not only saves money, but also fits in nicely with his company's green goals. "We make it a cultural thing. Even our forklifts are hybrids," he says. "They have a great business model that supplies the boxes we need -- when we need them -- and they're recycled."
Meanwhile, Metro's father is no longer worried about his son selling cardboard boxes. The company's annual sales are just under $10 million and growing fast, according to Metro. He now has a few hundred business clients -- including a dozen large corporations. And the company's average order has gone from a $100 moving kit in 2006 to an $8,000 truckload today.