RANCHO CUCAMONGA, CALIF. – For more than a decade, Monoprice.com, the discount accessories seller, has been a hero of bargain-hunting tech enthusiasts and the scourge of margin-strapped CE merchants and manufacturers.
The e-tailer was founded in 1992 by Sean Lee, who sought to create a 99-cent cyber store for CE accessories. Lee began the business by selling A/V cables on eBay out of his apartment, and eventually created an Internet buzz on tech forums and discussion boards with his high-quality but disruptively priced cables, cords, connectors and wall mounts.
Today, the Inc. 5000 company is expanding its facilities and workforce as it carries its low-cost strategy to other high-margin havens including audio and networking, and returns to International CES this week where it is exhibiting at The Venetian.
To keep prices low, most of Monoprice’s 4,000- SKU assortment of generic and private-label A/V and IT merchandise is contract-manufactured in Asia and sold direct to consumers at a deep discount to the branded accessories found in CE departments and specialty stores, where the heftier markups are a critical profit source.
A 6-foot stretch of ferrite-core HDMI cable, for example, which supports the latest feature specs including 3D and 4K resolution, currently sells for as little as $3.50 on Monoprice, compared with retail prices for branded cable at national and specialty chains that are ten, 20 and even 30 times higher.
“Monoprice’s business is definitely disruptive,” current CEO Ajay Kumar recently told TWICE. “By working directly with factories in Asia and selling directly to customers via the Internet, we have eliminated an entire layer of markup. This allows us to price our products 30 percent to 70 percent below the price of other famous brands with the same quality and features.”
While bringing customers a “value proposition they can’t find anywhere else” remains the focus of the business, customer service, said Kumar, is its cornerstone. “We have excellent customer service and support,” he noted, which includes Live Chat tech support seven days a week. “It is an essential part of our business model and has led to our rapid growth as a company.”
Indeed, Monoprice made Inc.’s 500 list of the fastest-growing U.S. private companies from 2008 through 2010, a period when its traffic grew 81 percent and sales surged 141 percent.
It joined the Inc. 5000 the following year, when sales hit $93 million, and at press time the company was on a run rate to reach $120 million in revenue for 2012, a year-over-year increase of more than 29 percent.
Kumar, who held senior supply-chain positions at Targus, Belkin, AT&T Wireless and Circuit City, said the business is debt free and is constantly looking to explore other profitable product lines and markets. In 2011, for example, Monoprice introduced a 5.1-channel home-theater speaker system for less than $85, which CNET lauded as “setting a new standard for ultra-budget speakers,” landing it on its list of “Best Tech Gifts for Under $100.”
More recently, Monoprice expanded its pro audio line in response to its success with pro audio cables and DJ headphones, and has added computer carrying cases and backpacks; camera bags and cases; networking equipment; and high-end gaming keyboards and mice to its mix.
“We don’t move into a market unless we possess the product expertise, and the overall pricing makes sense for us and our customers,” Kumar said. “That’s the philosophy and vision that we are confident will foster Monoprice’s continuing growth well into the future.”
To help support that growth, Monoprice is upgrading its 173,000-square-foot centralized office and warehouse facility here with a state-of-the-art warehouse robotic conveyor belt system to streamline its operations and ensure faster deliveries.
The company has also bolstered its management team by expanding its marketing, purchasing and financing departments, and has added more than 250 employees to its workforce.
To tout its accomplishments and scout new opportunities, Monoprice is exhibiting again at International CES, where it can be found in booth 70311 at the Venetian Ballroom.