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Garden.com: Seeds of Success

Gardening is a peaceful pastime. And profitable. Yet, the gardening market is highly fragmented, with limited product selection and customer service.

But one upstart company plans to provide a solution, Garden.com. On the site, you have access to more than 9,000 herbs, seeds, trees, perennials and shrubs. There are a myriad of products, like tools, books, furniture and even fertilizers. You can even design your own garden layout, using sophisticated online tools (called the Garden Planner). Once finished designing your garden, you can make the necessary purchases to realize your vision.

It should be no surprise that in August 1999, Media Metrix ranked Garden.com as the most popular site in its category.

To carry out e-commerce, Garden.com pursues a "virtual warehouse" system, which ties together over 60 gardening suppliers. For example, when a user purchases an item, the information is transmitted to a supplier, who fulfills the order. Thus, Garden.com is not burdened with much product inventory.

To create barriers to entry, Garden.com has entered key strategic alliances. For Example, Home & Garden TV is an investor in the company and provides advertising on the cable channel, as well as content and membership base arrangements. Next, Garden.com has an alliance with AOL, serving as an anchor merchant. In fact, Garden.com is the anchor tenant on the Microsoft Network. Finally, Garden.com has an agreement with PRIMEDA to provide cross-promotions with Horticulture Magazine.

Recently, Garden.com signed deals with iVillage (to be the exclusive partner for gardening), Excite@Home (co-branded site), and Southern Living (a magazine that reaches 13 million consumers).

True, the revenues for Garden.com are small. In the latest quarter, they were $1.4 million, compared to $358,000 in the same period a year ago. But there were some strong signs of growth, such as in the customer base which increased 254 percent to 110,000 and registered users went from 337,000 to 755,000. As for page views, these soared 96 percent to 23.9 million.

The market for gardening is huge. According to the National Gardening Associations, Americans spent about $46.8 billion on garden and lawn products, as well as landscaping services. The same survey shows that about 67 million households participate in some type of gardening.

Garden.com is rapidly becoming the destination point for this industry, which is fast going online. With its strategic alliances, rich content and e-commerce infrastructure, Garden.com could grow like, well, a weed.


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