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You've probably heard the old saying: When life hands youlemons, make lemonade. That's what Overstock.com CEOPatrick Byrne is doing with his Salt Lake City Website-except he's turning other people's lemons intovery sweet lemonade, both for himself and customers.
To explain: The 38-year-old took over Overstock in 1999. Soon,the company began buying up the inventories of failing andfloundering dotcoms and selling them at heavily discounted priceson the site. Inventories it's taken on have come from suchbig-name dotcoms as Miadora.com, eHats.com, ToyTime.com and Jewelry.com.
Dying dotcoms need money in their hands fast, and Byrne (whobrought upward of $25 million to the company) has got thegreenbacks.
The strategy seems to be working: Byrne claims Overstock is thefirst "pure-play" (meaning it has no brick-and-mortarpartner) e-tailer to become profitable. "We reached thismilestone by focusing on building values rather than hype," hesays. "We have established the fundamentals of a long-term andsustainable business. We're proud to say that we used up only$27 million in capital before we became profitable, while other tope-tailers have burned through hundreds of millions and evenbillions of dollars in capital and have not yet figured out a wayto make a profit."
And although so many other dotcoms are still sputtering intooblivion, Byrne insists continued growth and bright days are aheadfor Overstock.
Robert McGarvey is the author of How to Dotcom(Entrepreneur Press).
