Opportunity Ink

Thirty-four-year-old Keith Ramirez is always on the lookout for recession-proof business opportunities that involve something everybody needs. That’s why he started Inkgrabber.com eight years ago from his garage, after years of watching his father sell printer ink cartridges to retailers across the country. It’s also why he launched PricePickle.com, a web site that offers thousands of online coupons, approximately one year ago. “When we start our companies we go in with the philosophy that our market is going to go through ups and downs and our business plan starts with the initial thought: how can we thrive in a poor economy, that’s the first question we ask ourselves,” said Ramirez. Both companies are meant to thrive when consumers feel the urge to cut back on costs. Inkgrabber.com, for starters, saw a 12 percent boost in business through the downturn, growing revenues from $4.8 million in 2007 to $5.4 million in 2009. “Ink is something everybody uses and everybody needs,” Ramirez said. “And it’s really an underrated industry, I see people paying ridiculous prices for ink and they don’t even know that there are cheaper options. They don’t even know; it’s amazing!” With a background in computer programming, Ramirez set out to create an online retail store to sell every type of computer ink imaginable, including a much cheaper alternative: remanufactured product. Through partnerships with key manufacturers, Ramirez offers business owners and individual consumers printer ink prices that save them up to 92 percent off the manufacturer suggested retail price. “We take what would be a landfill product and put it through a vigorous inspection process. We completely remanufacture it, clean it, high pressure clean the print heads, test the cartridge before it is repackaged and put in our private label box, and sell it back to the consumer for up to 92 percent off of what they would have paid for a new one,” he explained. Inkgrabber.com has now sold printer ink cartridges, toner cartridges, copier toner and fax cartridges to more than 600,000 customers since its founding in 2003 and is now sending out an average of 500 shipments a day from its facility in Simi Valley, which employs 25 workers. $10 million sales goal With an average order of $55, the company is poised to reach its $10 million in sales goal by 2012. Selling remanufactured product has given Inkgrabber a competitive advantage, Ramirez said, allowing the company to make more profit to invest in advertising to be able to compete against names that are highly recognized in the industry. “It gives us a higher profit margin and that profit margin is what allows us to spend over $1 million a year in advertising.” The way Ramirez sees it, the ink industry resembles the pharmaceutical business. “It’s kind of like generic medicine, which is a fifth of the price of name brand drugs, it’s the same type of thing,” he said. “The difference is that the guys that are promoting the original name brand ink are all Fortune 500s so their advertising budgets are tremendous compared to little guys like me.” Still, targeted advertising and marketing efforts have led to continuous growth for Inkgrabber which was named among the 100 fastest growing Hispanic businesses in 2010 by Hispanic Business magazine and was also ranked among the nation’s fastest growing firms in Inc. 5,000 this year. The San Fernando Valley Business Journal also recognized the firm as a Fast-Growing Company in November. In a sign of continued growth and improvement, the company started private labeling its remanufactured product about three months ago after rigorous quality assurance testing with a core group of manufacturers. “It tells the customer that this brand rocks and we’re willing to put our name on that,” said Ramirez. The Inkgrabber name on the print cartridge and box is meant to set a standard of quality that customers will trust and rely on. Already the firm has seen a spike in sales of 35 percent mostly from repeat buyers since it started private labeling. Coupon-based business Inkgrabber’s business strategy has always relied heavily on giving coupons to repeat customers to reorder; in fact, a coupon is included in every box of private label product shipped. Suddenly, the idea for PricePickle.com was born. “We thought, why don’t we offer coupons to thousands of stores instead of just Inkgrabber,” Ramirez said. “It’s also a recession proof business, people are always looking for discounts, there’s really nothing to think about.” PricePickle.com, which he launched with his wife Kelly Ramirez, already boasts coupons for a couple of thousand stores nationwide. Stores will pay PricePickle.com a commission to promote the store brand if somebody uses a PricePickle coupon and places an order. “We are quickly expanding our merchant base, we want to grow to 5-6,000 merchants next year,” said Kelly, 27, who came onboard full time about four months ago. 400 percent growth With a degree in biology, she was doing research for a biotech company for five years until the firm relocated to Maryland earlier this year. “We had been doing this on the side, but as of four months ago I moved in full-time and we’ve seen a 400 percent growth in the company during that time,” she said. In a difficult retail climate, the site is profiting from a growing online shopping trend as more retailers close down their brick and mortar stores but continue offering products on the web, such as Linens & Things and Blockbuster, she said. “It’s even a better business model than Inkgrabber,” said Ramirez. “There’s no overhead, we work off two computers, we have one employee and it’s really, truly a virtual corporation.” PricePickle.com is already generating $1.5 million in annual sales for the stores on its site, Ramirez. “We’re on track to generate $3 million in sales for our stores over the next year.” In its first year, the company is projected to generate about $250,000 in commissions. “This is going to be far more profitable than Inkgrabber, with just one employee,” said Ramirez, who has extensive experience in search engine optimization and other online marketing techniques. The goal of the site, he said, is also to help smaller retailers boost sales, by devoting advertising and marketing resources to drive traffic to those smaller online retailers, in exchange for a percentage of the sale. Inkgrabber.com Location: Simi Valley CORE OF BUSINESS: Online retailer of printer ink cartridges Employees: 25 Revenues in 2008: $4.21 million Revenues in 2009: $5.44 million