In a new monthly column, June Avignone looks at some of the innovative ways that small businesses are making life better in their communities. This month she examines Greenmarketplace.com.
Motivated by his desire to slow the depletion of the Earth's natural resources by an exploding world population, the 27-year-old graduate of the Carnegie Mellon University's Environmental Ethics and Policy program raised $500,000 from angel investors and began selling environmentally-friendly products on his Website, Greenmarketplace.com (www.greenmarketplace.com), in March 1999.
Knauer, who says the company has exceeded its own earnings projections every month, expects annual sales of $2.5 million for 2,000. "People are looking for products that don't hurt others or the environment or animals," says Knauer. "I laugh when people say that we are tree-hugging granola types, when what we are doing is making extremely smart business sense. We are here and ahead of a major revolution positioned to go."
He may have a point. The Wolf Group, an Ohio-based market research firm, estimates that there are 100 million consumers who are currently interested in environmental and social issues. "Right now, many people may be interested in the lowest price online, but the Y generation will be so jammed everyday by thousands of messages that they will be immune to them," says Knauer. "They will be looking instead for something to believe in."
Knauer says his goal for Greenmarketplace.com is to connect environmentally-concerned manufacturers and progressive organizations under one roof in cyberspace. The site sells a broad range of products from 650 companies, ranging from cotton shirts made by an Egyptian organic farming cooperative to handmade soaps created by The Enterprising Kitchen, a job training program for women in the Chicago area who are homeless, substance abusers, or struggling with other major problems. Greenmarketplace also hosts events like a recent online display of a Life photographer's previously unpublished prints of Martin Luther King's March from Selma. Greenmarketplace.com also has affiliate relationships with 13,000 progressive websites, which receive up to 10% of the profits when their customers buy from Knauer's site.
To understand Knauer's vision for GreenMarketplace.com., one needs to go back to 1991, when the Internet was still young and Knauer was a kid from New Jersey who wanted to start an activist environmental site at Carnegie Mellon (www.cmu.edu). He wasted no time approaching the first wave of "computer geeks" already plugged into the advanced cyberspace possibilities available at CMU. "I bribed them to help me with pizza and Cokes, because the Internet was something new that I knew nothing about yet," he says.
That fledgling site evolved into Envirolink Network (www.envirolink.org), which has grown from a simple mailing list of 20 students to one of the world's largest environmental information clearinghouses. Offering free Internet hosting services to more than 500 nonprofit organizations, it receives 9-to-11 million hits per month. Or, as Wired magazine put it, EnviroLink "connects resources and HTML links to facilitate the healing of our planet."
By 1997, Knauer realized that members of Envirolink were having trouble finding the natural products they wanted to buy -- and saw an opportunity to start his own business. "Although claims were made on many items they didn't feel they had a shred of evidence of how products were made, or under what conditions," he says.
To assemble the right merchandise, Knauer hired Sarah Siplak, a full-time product researcher who conducts surveys, handles testing, and investigates product ingredients and certifications. "It is an expensive process and time consuming," he acknowledges. "Each category has different sets of criteria. Clothing must be recycled or totally organic; foods must be all-natural."
In keeping with its philosophy, Greenmarketplace.com publishes a list of each item's ingredients on the site. "Being a green company is really about being transparent," says Knauer. "It's about letting the customer see everything: the ingredients of the product, where and how it was made, who made them, even the name of the person who packed it. The higher the corporate transparency -- the ability to show its true colors -- the more the consumer is involved in every stage of the process, and the higher the customer retention rate will be."
Knauer also invested time in developing an innovative way to ship his products and help his community at the same time. Warehouse trainees referred by Goodwill Industries of Pittsburgh pack and ship all products, using recycled materials. Many have physical disabilities or struggle with homelessness, dependence on public assistance, and illiteracy. "Efficiency has gone way up, and it's great to see people who may never have worked before take pride in what they do," says Knauer. "I was helping there at Christmas time, and one guy was very happy that he would be able to take his girlfriend out on a fancy holiday dinner date this year."
In keeping with Knauer's ideals, GreenMarketplace.com gives its 13 employees a monthly stipend to purchase basic health benefits, along with healthy extras like massage therapy, yoga lessons, and bicycles. Staffers can work flex-time schedules and, in keeping with the Internet culture, can bring their dogs to work. "We get dozens of resumes a day, and we are picking the best and the brightest," said Knauer.