Archie’s online boom: Archie McPhee slashes circulation

When novelty gifts marketer Archie McPhee launched its Website ( in September 1995, response was “underwhelming,” says Mark Pahlow, president of the cataloger/retailer/wholesaler. “But when we added the shopping basket ordering feature in summer 1997, it came alive.”

One might say it roared to life. Though he won’t disclose sales figures, Pahlow says the site, which has 35,000 unique visitors a month, generated 15% of the Seattle-based company’s total revenue in 1998 and is now responsible for 55% of total sales. In fact, the Web numbers are so compelling that at the beginning of the year Pahlow slashed circulation of the print catalog from 1 million to less than 300,000, and reduced the frequency from five issues a year to three: spring, Halloween, and Christmas.

“We did the math,” Pahlow says. “We were tired of losing money. At our place in the food chain, the cost of producing, printing, and mailing a good color catalog to rental names just doesn’t work.” Pahlow says that the site has saved the company more than 50% in production costs, which had been as high as $700,000 annually. “But we do all of our Web design and maintenance inhouse,” he adds. “If we had gone outside for our design, we wouldn’t have saved much at all.”

The Website gives Archie McPhee an opportunity to offer interactive features, such as “The Nerd Test” and a fortune-telling ball, as well as much more merchandise. “A 48-page catalog would show fewer than 200 items, whereas the Website offers more than 500,” Pahlow notes. Another benefit of the site is its real-time inventory feature. “The day a new product arrives, it is shown on the site. The moment we run out of an item, we pull it off. We are also able to show items we have small quantities of as Web-only specials.” The average order size for both Web and print buyers is $35.

A tricky shift

Regardless of McPhee’s online success, a cataloger’s shift from a print-dominated business to a Web-dominated one can be tricky, says Jack Schmid, president of Shawnee Mission, KS-based consulting firm J. Schmid & Associates. “The Internet is extremely passive,” Schmid says. “It’s like a store. You have to use advertising, linkage, and other means to drive traffic to it. But the print catalog is intrusive; it reaches customers directly.”

While many print catalogers would undoubtedly like to launch a Website and then “wave a magic wand and cut print circulation in half, they shouldn’t abandon the print catalog completely,” Schmid adds. “It’s a new-customer driver, and attracting new customers is much more difficult to do with a Web catalog.”

In fact, in addition to using links to other Websites, such as that of ice cream manufacturer Ben & Jerry’s, Archie McPhee relies on its print catalogs to promote its site. “I think we will always produce at least one catalog a year,” Pahlow says. “We have many reports that when our catalog is kept, it is kept in the bathroom. So I think there will always be a place for us there.”

One thing’s for sure: Archie McPhee’s Web sales are certainly not in the toilet.

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