Wanting to start a new topic of Entrepreneurship, I thought what not a better candidate that David Orr. Most likely, you've never heard of David Orr. David isn't on Forbes Top 500 list (not yet at least). He's not a multi-millionaire (definitely on the right track). To the average passer by, David might just like the ordinary teenage kid; but he's much more than that. What makes him so special? How about being the CEO and founder of his corporation before he could drive. See the Range Rover pictured below? That's David himself. That's not him pictured next to his dream car that he hopes to drive one day. That's him pictured next to the dream car that he paid cash with the earnings from his business start-up. Intrigued yet? You should be. Here's a look into the story of David Orr and how he founded his online company Fruper.com.
What is Fruper.Com?
David owns and operates an online e-commerce business known as Fruper.com. His site sells primarily consumer electronics in a one deal per day format. It’s a simple concept which is somewhat patterned after the popular Woot.com site but with a few differences such as that of an online store. The products that don’t sell out completely as daily deals are offered for sale at sometimes even better prices in the store. After all, initially Fruper had no way of keeping a great deal of inventory. Why? Because the basement of David’s family home had only so much space for warehousing!
Space had been an issue for awhile. David’s first business venture started stirring in his head when he was only 11 years of age when he happened to be at a school dance. An older high school student had rented some DJ equipment from a local music business and was being paid $50 for spinning some tunes at the dance. That was a lot of money for 3 hours of fun. So David talked his parents into letting him have a party at his house where he rented the same equipment used at the dance. He talked the music company people into teaching him how to operate what he had rented and he basically ended up DJing his own party. That led to him starting his own DJing business and the age of 12, a far cry that mowing the neighbors lawn.
The Name is Born
He then learned to make money off Ebay. Some Ebay buying and selling made him quickly realize that ‘ebay’ wasn’t enough. He wanted his own business without ebay rules and fees, and with products that interested him. In 2006, David, then 14, and friend Joel Baker, then 13, came up with the name ‘Fruper’ because it rhymed with ‘Super’ and because it was an available dot com site. (Okay, and also because their first name, ‘Vagoinka’, resulted in each of their mothers reacting with the same ‘GASP!’ and the boys gazing at their mothers with completely innocent, “What’s wrong with that?” types of looks!) The word ‘Fruper’ was simple, catchy, a bit funny and fairly easy to remember, and it became their pick.
Because the boys could not drive, it was difficult for them to get together to work on Fruper. Joel tried to assume responsibility for product searches. With his ebay knowledge, he made some of Fruper’s first purchases through ebay and after froogling prices to determine the best values. David developed the website and set up the accounts. They worked together in obtaining the shipping material and tried to meet often in David’s basement to process their orders, pack them and prepare them for shipping. When it because obvious that it was going to be impossible for them to get together regularly enough to manage the business, they agreed that David would buy out Joel’s interest.
Owner and CEO at 15
David became the sole owner of Fruper.com in the fall of 2006 shortly before his 15th birthday. All responsibility fell on him and he jumped into it with a vengeance. Each morning, he would be on the computer by 6 am to update the daily deal with a new product and see that it made its way to the World Wide Web. He’d print out packing slips for orders placed while he had slept, then pack up the orders, weight them, and log into Paypal which he linked with the USPS to print out shipping labels. At 6:30 am, he’d eat breakfast and then take a shower. Thereafter, he’d gather the packages and place them in his mom or dad’s car for taking to the post office or in the garage if he had scheduled a pickup the night before. Finally, he’d get online to check email, manage customer service issues, track packages that hadn’t yet been delivered to customers and make contact with various merchants and wholesalers with regard to products. When freshman year of high school began, ‘Early Bird’ classes required him to leave with his 16 year old sister by 7:30 am during the week.
School days were tough. He would sneak into a restroom stall at breaks to check his email on his cell phone. If he couldn’t gain access to Fruper, he’d text his mom and asked her to check the status of the daily sales, then wait for a responsive text. Getting caught with a cell phone during school hours could result in confiscation or fines, so all access had to be done on the sly. At the end of the school day, there might be track or cross country practices or meets, but as soon as he arrived home, he’d grab something to eat, slip in a little homework, then begin a product search for Fruper.com
Fruper had good days and mediocre days. David’s goal was to make at least $50 per day. That goal was almost always met. Yet there were days that sometimes netted him thousands of dollars. One example of a more successful day was the one when he sold one of his really good finds, which were Lexar MP3 players.
Bose had a special promotion on some very nice headphones that came with MP3 players. One distributor had orders for 550 of the headphones right before the special came out, so he kept the MP3 players and sold them as a wholesale lot on Ebay. No one bid, but David kept a close eye on the auction. When it ended, he made contact with the seller’s agent and made a low-ball offer. The retail value of the new MP3s was $50.00 each. David offered less than $4.00. His offered was accepted.
Bluetooth headsets, MP3 Icarta toilet paper holders, digital t-shirts,remote control key chains, memory card readers, laser printers, cordless keyboards, monsters cables, MP3 sunglasses and many other products would follow in those early years. When the basement would become too full, David would offer a grab bag ‘Sack o’ Scrap’ to liquidate his excess inventory. In 6 hours, the last offering of 1500 Sacks o’ Scrap sold out completely, resulting in his bank account increasing by more than $14,000 in that mere 6 hours. Family and friends gathered night after night to form assembly lines to fill and pack orders. The postal service had to send extra trucks to the Orr garage just to transport all of the packages. They officially dubbed Fruper.com as one of their very best customers from that point forward.
More from GFC, Below
Can't Stop a Good Idea
The more he did the more ideas he had. If he could sell 1500 individual orders, why couldn’t he sell 1500 items as one single order? Maybe it would bring less money, but it would certainly be easier work. When a lot of name brand iPod cases became available for sale as a pallet of 2400, David thought he could perhaps sell 400 on Fruper and liquidate the remainder as a wholesale lot. The whole pallet could be bought for under $300 with shipping and he could likely sell 2 packs at a time for around $5-$6 on Fruper. The remaining 2000 would be resold as a lot. Imagine his surprise when the 2000 alone sold for$860 with shipping!
Have there been negatives?
Absolutely. Learning about the delays that sometimes take place with the USPS and the complaints that follow from customers was challenging. And making the very best purchases each and every time was not always possible. It’s like when he purchased 100 high tech-type routers. David knew the items were new and unique; they were systems that allowed homes in the middle of nowhere to easily have whole-house wireless internet access. E an expensive learning experience when his $3000 purchase sold mostly in a wholesale lot for about $1200. But he realized from that point forward that his purchases should be in limited quantities if the products ach had a value of about $60 and David bought them for a little less than half that price. But only a handful ended up selling on Fruper. Customers didn’t understand them, so few made a purchase. Ultimately, it was were questionable unless the price was absurdly low.
Learning His Way
David learned from the negatives and has started moving toward even bigger business aspects. After several purchases from a company in Nashville, Tennessee, he spoke directly with the company owner and ended up meeting with him personally. He could not yet drive, so his parents had to take him on the five hour trip to Nashville. The owner offered David large amounts of his inventory at rock bottom pricing because he had no space remaining in his warehouse. It helped that David’s uncle, Mike Orr, owned Mid States Logistics in Nashville which actually had a trucking business as one division. The products were shipped to Agracel’s Total Quality Warehouse in Effingham, Illinois.
His first semis arrived at the warehouse on April 12, 2007 with 24 pallets of Griffin iPod products. 4200 iPod cassette adapters were on the shipment at a base cost to David of $.24 each. By the time shipping, 2 months storage, Paypal fees and related costs were added, David had $.67 in each transmitter. Postage would add another $1.05 for a total of $1.72 each. Considering that the best total price on ebay was $9.80, David’s price of $3.98 total was quite a bargain. It was unlikely that he’d sell out at that price, but if he did, his profit on the one pallet alone would be $9,492, enough to more than twice pay the base cost of all 24 pallets received in the initial shipment. Of course, he would be setting the market price for these products nationwide once he began his sales; he had to carefully evaluate what would be a reasonable price because from that point forward, he could never likely increase the amount.
Building His Empire
While building Fruper and adding a wholesale division, worldwide shipping and an online store, David also began yet another e-commerce business. PrimeThreads.com, the sister site of Fruper, was born when he bought out a bankrupt t-shirt company from California. He designed and launched the website much like he did with Fruper.com. It was quite an accomplishment to see PrimeThreads have more than 12,000 unique visitors on opening day alone.
David is a junior in high school now, and for the most part he is still a pretty normal kid. He may drive a BMW (traded in the Range Rover when he realized how bad the gas mileage was) and exchange website knowledge with business people for helicopter rides, but he also studies very hard to maintain honor roll grades in classes like physics and college level math. He recently received an award for being Most Improved on his school’s soccer team, and he’s never missed a year of representing his class on student council. He’s an avid runner and enjoys spending time with family and friends. SCORE, Eastern Illinois University, Rotary and other organizations have given him the opportunity to speak at various events, and he was recently the keynote speaker at an Entrepreneur Camp for teenagers. Even the mayor of his hometown nominated him for Ernst & Young’s Entrepreneur of the Year award in 2008.
Fruper has become a fairly large operation these days, but David’s ‘office’ is still in the basement Fruper room of the family home. His most recent purchase was that of nearly a half million new iPod products which he had shipped by the truckloads to Total Quality Warehouse in September of 2008. Prior to the shipment, then 16 year old David Orr made the five hour drive to Nashville by himself. He negotiated the deal, contracted for the transportation, tendered payment and arranged for the storage completely on his own. Almost all of the products have been sold (either individually as daily deals or in large quantities as wholesale lots) as of mid-December, 2008. If all of the buyers pay as contracted, he will more than quadruple his investment in less than a 5 month period. The poor economy has not affected his sale prices, but he has seen slow-pay buyers as well as those who have apparently not been able to obtain financing to complete the sales.
Fruper.com will never be the final business for David because his goals seem to be endless. He has plans for many more Fruper divisions and hopes to someday own a business with a primary purpose of selling wholesale quantities and surplus. He’s been devoting a great deal of time to writing a book which he will call “Success by 17: Guidance and Motivation for Becoming a Successful Young Entrepreneur.” But if you ask him his primary goal right now, he will undoubtedly tell you that it is figuring out a way to make it into business school at the University of Illinois once he graduates from high school in 2010!
Mindset of an Entrepreneur
Subscribing to the belief that it doesn’t take the mind of a rocket scientist to be a success, David figures that it’s really effort that puts a person on top in the business world. Is he sharp? Absolutely. Yet if David’s ideas turn into successes, it will have a little to do with the fact that he’s smart enough and a lot to do with the fact that he has a drive that pushes him to work hard to accomplish what he wants. His determination will be admired and his impatience will annoy and drive some crazy, but he will persist until he gets the job done the exact way he wants. That’s what really makes a successful entrepreneur………no matter what their age.