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Founder learned valuable lesson from Hudson

Hattiesburg-based eValueville gets big on eBay

Andrew Waites, founder and president of Hattiesburg’s eValueville, says that his company has become eBay’s biggest seller of discount, new apparel because he follows a rule he learned while working at Hudson’s Inc.: “The buy always drives the sales and not the other way around.”

EValueville , which is a $5-million business on eBay and holds some 300,000 auctions a year, is moving into two buildings in the Historic Hattiesburg Business District. The Market Street buildings were abandoned as Hattiesburg started changing and businesses moved out to malls and shopping centers.

“Now, a new economy business is revitalizing old economy buildings,” Waites said.

Waites’ operation could be a definition of simple efficiency. He buys large lots of merchandise — new, not damaged — and discounts them up to 80% on the Internet. EValueville has 10 to 20 employees, who write up to 230 ads in an eight-hour day. Employees who want to work harder, write more ads and earn more money are given the opportunity.

This system eliminates almost all management problems, Waites said. No one talks or wastes time. Everyone works hard because they have an investment in producing as many ads as they can. “We have a very self-managed entrepreneurial system.”

The eValueville warehouse has an equally efficient system, with only three employees handling all of the incoming merchandise and outgoing orders. The system is so efficient, Waites said, that a $5-billion consulting company tried to buy eValueville “just because they wanted our efficient system. But it’s just old-fashioned Southern common sense.”

Ready for the business world

Waites should know all about Southern common sense. He grew up in South Carolina and attended Regents University in Virginia. He was working for the university, with its largest donors, when he met Bill Hudson.

“I was ready to go on into the business world by then, and when Bill offered me a job with Hudson’s, I took it and moved to Hattiesburg,” Waites said.

He was vice-president of inventory procurement and, after two years, told Hudson that he thought he could build a business by becoming a broker.

“There are only a few big discount buyers like Hudson’s in the country,” Waites said. “And when a huge lot of merchandise is bought, several of the businesses become temporary partners — Hudson’s is the largest — in buying the merchandise. I knew them all and had worked with them all. So I thought that I could become a broker and charge them a commission.”

“And Bill Hudson said, ‘I’ll fund you.’”

Their partnership was named Inventory Procurement Services. This was in 1995-1996. Then, Waites started eValueville. Hudson’s isn’t a partner in eValueville but “a great customer.”

“At first, eValueville was traditional selling, a brokerage business. Because it’s only a few companies and they all knew me, I’d buy merchandise with their money.”

Waites’ venture into online marketing came at a time when he was having difficulty selling a large inventory of expensive leather coats in late spring in southern Mississippi. An employee suggested that they try selling them on eBay. Waites said that he knew of eBay but that he’d never looked at the Web site.

“I told her that if she felt this would work to go for it,” Waites said. “And she did.”

Waites was stunned by the results. He had hoped to get $50 to $60 a coat but, on eBay, they all sold for more than $250 apiece. EValueville tested to see if the margins held with other merchandise sold online. They did.

So, Waites said, eValueville found a niche on eBay. But eBay back then — in 1999 and 2000 — wasn’t the operation that it is today and eValueville had to carve its own niche.

Waites said that eValueville was “one of the small business pioneers on eBay. When I told eBay that I wanted to close a thousand auctions a day, they didn’t think that it could be done.”

But that soon changed, and after a brief period, eBay started changing its focus and now, Waites said, small businesses can operate profitably on its Web site.

“EValueville’s turnover of inventory is now more than four times higher than our nearest competitor,” he added. “There’s never been a day on which we lost money.”

Waites is quick to explain his success: “Give Bill Hudson all the credit. And I credit him for my core confidence in business. He taught me that the buy drives the sales.”

Actually, Waites said, the idea originated with Hudson’s grandfather, H.C. Hudson. Waites calls him “the first retail salvage person.” But he lacked the knack for retail sales. His grandson added that. Now, Waites has taken this buying concept and added the Internet. Another concept Waites has used successfully is his special relationship with his employees.

From the beginning, Waites tended to hire the kind of people — particularly single mothers — who usually wound up working for minimum wage at fast food places or retail outlets.

The problem with single mothers working full-time is that sometimes they have to leave work suddenly because of an emergency with a child or miss a day’s work because of children’s medical or dental problems.

Waites wanted to help them, but they presented problems to a manager. He came up with a system that was compassionate but that allowed for effective production.

“In an e-commerce situation,” he said, “We instituted a pay-for-production system.”

Contact MBJ contributing writer at George McNeill at mbj@msbusiness.com.

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