MOUNTLAKE TERRACE — Anyone with a closet full of stylish shoes would appreciate the collection of footwear that George Herman oversees.
Rows of 12-foot-high shelves are filled with organized and neatly stacked shoeboxes carrying the logos of 50 different brand names, from Adidas to Dr. Martens to Wolverine.
Herman, manager of Onlineshoes.com’s distribution center, wouldn’t say how many shoes those soaring shelves hold. He and his boss aren’t eager to let competitors know.
"It’s a pretty healthy pile of shoes," Herman understated.
In the past few years, Onlineshoes.com has become one of the nation’s top shoe retailers on the Internet, resulting in the company’s expanding operation at the corner of 220th Street SW and 66th Avenue W in Mountlake Terrace. The warehouse is especially buzzing with activity this time of year, thanks to the holiday shopping season and a boost from Oprah Winfrey.
"This really nuts for us. It’s fun, though," Herman said.
While the company’s succeeding, it was a tough sell when Dan Gerler, president of Onlineshoes.com, told business associates about his idea in the mid-1990s.
"It was greeted with skepticism in all quarters," said Gerler, 46.
Gerler already knew the shoe-selling business well when he decided to branch out. His father, Kuno Gerler, started the family business with one shoe store in Seattle in 1968, then opened Lynnwood’s Red Wing Shoes store in 1971. Dan Gerler took over the business in 1982.
After taking over Gerler &Son Inc., Gerler eventually opened two more Red Wing Shoes outlets in Virginia, one of the only under-served markets for that brand at the time. He examined other ways to expand the business, too.
After thinking about a catalog sales approach, the growing popularity of the Internet attracted his interest. But when he talked to shoe manufacturers, many of whom weren’t even using e-mail in their day-to-day business at the time, they weren’t excited.
So Gerler started small. The first home of Onlineshoes.com was the backroom of his store near Seattle’s Green Lake.
"We approached it incrementally," he said. "We didn’t bet the farm on it."
Only a few years later, Gerler needed more room, so he found the Mountlake Terrace space. The original distribution warehouse was little more than 4,000 square feet. After a series of expansions, taking over more of the leased building, Onlineshoes.com’s warehouse now occupies 20,000 square feet. During an expansion in 2002, Gerler also opened a retail store, The Shoe Advantage, in the front part of the building.
The physical expansion reflects leaps and bounds in sales, Gerler said.
"In October 2003 alone, our revenue exceeded all of 1999’s," he said. "And in this fourth quarter, revenue will exceed all of 2001."
This year, he estimated, Onlineshoes.com will generate 75 to 80 percent of the revenues that Gerler &Son takes in this year from its Web site and five stores. The online operation ranks among the top five shoe retailer sites on the Internet, Gerler said.
"The retail stores really supported getting the online business off the ground. Now the Internet is such as dominant part of the business," he said.
Herman said the phenomenal growth also has been the company’s biggest challenge. When the warehouse expanded, workers installed a conveyor system and the company adopted other inventory efficiency tools to keep up.
"We’re doing a lot more business than last year, but with about the same crew," Herman said. "If we still did things like we did two years ago, there would have to be lots more than the five or six people we have back there."
In the customer service offices in front of the warehouse, employees take orders from those who prefer to use the toll-free number rather than ordering electronically from the Web site. The company has specialists to deal with only with orders that need to be sent directly from shoe manufacturers or with billing issues. The billing specialist checks to make sure credit and debit cards used for orders are not stolen. Gerler said that’s become much less of a problem since Onlineshoes.com decided to serve just the United States, instead of the international market.
Herman said all of the operators, who work in shifts that begin at 4 a.m. in order to serve East Coast customers, usually are willing to answer any and all questions about the shoes.
"It’s fun to watch the customer service calls sometimes. They’ll get the shoe from the warehouse and look at the color or even try it on" in order to describe a shoe’s color, fit and other features over the phone, Herman said.
One of the hottest brands being ordered this year are from Ugg, an Australian-based maker of sheepskin-lined boots. After Oprah Winfrey touted that brand’s blue and pink women’s boots on her talk show, they sold out nationwide. Onlineshoes.com benefited, Gerler said, as his buyer had bought up one-half of the available inventory of the boots before Winfrey’s endorsement.
Keeping up with trends such as those is vital in the shoe industry, Gerler said. He said he thinks the Web site may even have an edge in that respect, as the site often has brands and styles that are hard to find in retail stores because of their popularity.
With Onlineshoes.com’s reputation for customer service and its easy-to-use Web page, other shoe companies have approached the company about representing them on the Internet. Onlineshoes.com now handles all the Web sales for Sebago Inc., a Maine-based maker of boating shoes.
John Brix, vice president of sales and marketing for Sebago, said the shoemaker formerly operated its own retail Web site. But keeping up with the technology to keep a Web site working fast and reliably was getting expensive. Also, Sebago didn’t have the same direct retail background as the online operators.
After talking to all five of the major online sites for shoes, Brix chose Onlineshoes.com, which took over the site and redesigned it.
"It was just tremendous," Brix said. "In the first week, we saw something like a 152-percent increase online, and it’s been running like that ever since."
Handling direct-to-consumer Web sites for other shoe companies could contribute to Onlineshoes.com’s future growth, but the still-budding sector of online sales alone nearly guarantees the business will keep expanding, Gerler said. He plans to add another two dozen shoe brands to his site in 2004.
"As people have more positive experiences, consumers are more accepting of online shopping," he said. "And a brick-and-mortar store just can’t offer our variety."
Scanning again up and down the rows of shoes in the company’s warehouse, Herman echoed that sentiment.
"If we can’t fit you here, you have an odd foot," he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
CHRIS GOODENOW
/ The Herald
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