Special Report - Breakaway: A Focus on Small Business

Domain Blossoms

Florist.com address proves a rainmaker for a small Beverly Hills business

By RANDYE HODER

What's in a name? To Aron J. Benon, owner of an online retail flower shop, Florist.com, the answer is simple: profits.

In a world when many consumer-oriented Internet start-ups have gone belly up in the past year, Mr. Benon credits a big part of his success to having the right domain name.

"There are thousands of people who when they decide they need flowers, they type in Florist.com in their browser and they come to me," says Mr. Benon, whose Beverly Hills, Calif., company has been steadily profitable since the launch of the Web site (http://www.florist.com/ ) in August 1997. "I don't have to pay a dime to get those people to my Web site. If you have a good domain name, it just drives traffic."

With virtually no advertising, Mr. Benon has increased his sales from $247,000 when the site began to $3.8 million last year. And while that doesn't come close to the revenues generated by his much bigger corporate competitors, 1-800-Flowers.com (http://www.1800flowers.com/ ) and FTD.com (http://www.ftd.com/ ), for a small-business man who started out with a corner flower shop, it has been a bonanza.

Just Getting By

Had he stuck strictly with the brick-and-mortar business that he has run since 1989, he says, "I knew I could work very hard for the rest of my life and just get by." But by venturing out on the Internet with the name Florist.com, "I knew I was on my way to real wealth," says the 38-year-old Mr. Benon.

Business consultants caution against reading too much into a story like Mr. Benon's, noting that building a strong brand identity and, above all, having a sustainable business model have come to be viewed as far more important ingredients for online success. Indeed, plenty of other companies with the perfect appellations for their businesses -- Pets.com and Garden.com, for example -- have failed. "There are a lot of carcasses on the Internet trail from people who had great names and nothing else," says Victor Hwang, chief operating officer of the Los Angeles Regional Technology Alliance, which supports high-tech companies in Southern California. "The name is a helpful tool, not an end solution in itself."

Nonetheless, for an entrepreneur, having the right name can be an important weapon to compete effectively. "It's a way for a small business to level the playing field," says James Klein, associate director of EC2, an Internet incubator at the University of Southern California in Los Angeles. Adds Stephen Elias, a trademark lawyer and co-author of the book "How to Choose and Protect a Great Name for Your Web Site": "You have to be a good businessperson. You have to be smart. But having a great generic name is going to make a big difference if all the other pieces fall into place."

Questionable Choice

It certainly has for Mr. Benon, though things didn't start out that way. He took his business onto the Web as sales at his three Los Angeles-area flower shops were starting to decline as a result of heightened competition. He picked the URL, or domain name, that seemed most natural, sticking a dot-com at the end of the name of his tiny chain, Floral & Hardy. Quickly, though, he realized that he had blown it.

"Nobody would ever know who we were without a ton of advertising," Mr. Benon says. And that "we couldn't afford."

But then, serendipity struck. Surfing the Internet, Mr. Benon stumbled on a now-defunct online shopping center called Branch Mall that featured links to a host of Internet flower merchants. Mr. Benon signed up, and the next day floralandhardy.com had a link as well.

That same day, he received his first order. When he contacted the patron and asked him how he found floralandhardy.com, the customer said he had simply typed in "Florist.com," landed at the shopping mall and picked Mr. Benon's store.

Until that moment, Mr. Benon hadn't realized that people could zip right to the mall by typing in Florist.com. "I never thought that people would just type in some generic name," he says. But suddenly "fireworks went off ... I realized that was the key."

By then it was late on a Friday afternoon, and Mr. Benon had to wait until Monday morning to make the phone call that he assured his wife "would change our lives forever." At 5 a.m. he dialed the East Coast and contacted the owner of the Branch Mall. Within minutes, Mr. Benon agreed to buy the name Florist.com for $15,000. "I was thinking that if he [the owner of the Branch Mall] picks up the phone and calls FTD or 1-800-Flowers, they would have bought it for much more," Mr. Benon says. "I sweated the whole time."

He isn't sweating so much anymore. Last year, Mr. Benon says, his closely held company earned $332,000, up from $181,000 in 1999. To focus on the Internet, Mr. Benon has closed two of his three shops, and even the remaining signature Beverly Hills location -- which he says caters to Hollywood stars including Michael Douglas, Drew Barrymore and George Clooney -- barely has any flowers in it anymore. Most of the space is now taken up by desks with computers perched on them. Of his nine employees, seven are devoted to the Internet.

A good name isn't the only thing that Mr. Benon's business has going for it. He takes pride in having managed his Internet operation just like he managed his walk-in stores: very conservatively. In fact, he didn't borrow any money to start his Web site, even turning down offers of financing from venture capitalists who were attracted by the generic name he had corralled. Instead, he paid for the Florist.com URL in 15 monthly installments of $1,000.

Name-Game Competition

Despite Mr. Benon's cautious approach, there are sure to be challenges ahead. Revenue growth is expected to slow this year as the economy weakens. In addition, some note that a number of new domain-name suffixes are slated to soon become available, making possible URLs such as Florist.biz and Florist.pro, which could sap business from Mr. Benon's company.

Also, some question whether Florist.com can survive long term against its much larger rivals, unless Mr. Benon can find a niche in which his company can distinguish itself. In January, Florist.com attracted 152,000 visitors to its site, according to Media Metrix, an Internet tracking firm in New York. That was dwarfed by the 1.3 million visitors who clicked on 1-800-Flowers.com and the 451,000 who went to FTD.com.

One advantage that the bigger industry players enjoy is an expansive network of flower shops around the U.S. that can guarantee local deliveries. "That gives us a competitive edge," says Mike Soenen, president and chief executive of FTD.com, Downers Grove, Ill.

Mr. Benon, by contrast, still needs to cultivate his own, more limited network of florists nationwide. That reality hit home this past Valentine's Day when his Web site was deluged with 8,500 orders -- about 500 more than Florist.com could easily handle. In some cases, when the company couldn't find local flower shops in various parts of the country to fill its orders, Mr. Benon's staff had to call back customers and offer apologies, along with a 10% discount for a year.

But in the end, Mr. Benon believes he can overcome all of the obstacles, in large part by keeping things in perspective.

With the Florist.com name, "I get enough of the market share to do well," says Mr. Benon. "That's great for a guy like me. I don't have illusions of grandeur. I'm happy to serve a smaller number of people really well, increase our profits and stay the course. I don't care about being the biggest."

-- Ms. Hoder is a writer in Los Angeles.

Write to Randye Hoder at breakaway@wsj.com