No longer behind the eight ball

Four years ago, Andrew Walker was living on a pig farm in Ontario, Canada. Now, he's the 26-year-old president and CEO of a multimillion-dollar company based in Monument.

All it took was a Web site, a partner who spoke Chinese, and a way to ship a thousand-pound package halfway around the world for a reasonable rate.

Walker's story is even more unlikely than that summary. The pig farm was a step up for him. He'd started an online business in college at the University of Arizona selling toys, novelty items and T-shirts that went bust when his credit card processor withheld payments - a miniature version of what forced Frontier Airlines into bankruptcy earlier this year. Walker had to drop out of school and would have ended up on the street if a friend hadn't offered room and board on the farm.

"Seeing that all unravel and losing it all, that was absolutely priceless education," Walker said. "I know exactly how not to run a business now."

Between dishing out slop and scooping manure, Walker worked on an idea. In a college class, he'd written a business proposal and, with the pigs, he set about making it happen. He was looking for a business that wouldn't be undercut by big box stores, a product with high profit margins and wide appeal, but without a dominant national retailer. Walker's plan was to produce the product overseas, sell it online and ship it direct to the customer. And the product he came up with was pool tables.

"I wanted something that wouldn't get stomped on by Wal-Mart," he said. "I figured any product that needs to be professionally installed is going to be safe."

A friend's brother who lived in Colorado Springs showed his business proposal to Jake Jenkins, a former Air Force captain who was in business importing Chinese pool tables and reselling them to American retailers. Jenkins knew the manufacturers, understood shipping and spoke Chinese. He wasn't sure the direct sales model could work.

Shipping pool tables is complicated

"The problem with a pool table is, even though it weighs 800 pounds and is wood, it's about as fragile as a piece of china," Jenkins said.

Walker set up a company, Pool Tables Direct, and a Web site, pooltab lesdirect.com. But getting the company running properly required negotiating deals with the shipping companies, who initially refused to ship to homes, designing forgiving packaging and setting up a network of installers.

"I lost so much money in shipping the first year," Walker said. "It was really hairy at first. I didn't know anything about pool tables. I didn't even really play pool."

Pool Tables Direct wasn't an immediate success, but the business gradually picked up steam, growing from $680,000 in sales in 2004 to $3.2 million in 2007. This year, the company plans to break $5 million in sales.

"The company's growth has always surprised me," Jenkins said. "It's doubled in size, even with the economic downturn last year, which killed a lot of businesses."

After starting out by himself in his parents' basement, Walker ran the business from Las Vegas for two years with three employees, but last fall Jenkins, who serves as chairman, convinced Walker and his team to move to Monument, where he lives.

"I think it was culture shock for them, coming from Las Vegas," he said. "Now they love it."

Walker rents a home in Colorado Springs, where he has what he calls "the world's tackiest pool table" - a black and gold display model left over from a Vegas show. Despite that, he's still not a pool shark.

"I'm not even that good now," Walker said. "I don't like telling people what I do for a living because they're like, ‘You should be much better.'"

So many products Americans buy are imported that we take for granted the logistics miracle of shipping an item from the far side of the world to our doorsteps. With the right know-how, however, sending even a product as big, heavy and expensive as a pool table is a straightforward process.

It works like this: Shipping a container of 50 pool tables from Shanghai, China, to Long Beach, Calif., costs from $3,500 to $4,000 - although shipping costs are increasing because of rising fuel prices and the sinking U.S. dollar. Put that container on a train to Dallas - a central location that makes it easier to sell to the East Coast - and the total cost is about $5,000. The last step is to load individual tables, packaged on a pallet, onto a truck and send them to the buyer.

The pool table arrives in several large boxes, none of which weighs more than 100 pounds. Depending on the shipping option, the customer may have to pull them off the truck himself, have it delivered to the curb, or brought all the way inside his home. Set up and installation runs an additional $349.

Marketing a large, expensive product such as a pool table online can be a challenge. Banner ads, sponsored searches, partnerships with companies like Amazon and eBay help, but there's a psychological barrier to overcome.

"We're talking about a $1,200 purchase (and) you're effectively buying a photo on the Internet until you get it," Walker said.

Manufacturing in China is not the end-all-be-all, either. For a lot of reasons, it would be better if tables could be made cost-competitively in the United States, he said. Walker and Jenkins are in talks to buy a custom pool table manufacturer and move the company to Monument, where it would focus on highend, custom models.

"My feeling is that the best thing we can do is migrate the product back to the U.S.," Jenkins said. "You can't run all over the world and still expect to get a quality product."

Now that he's mastered pool tables, Walker is adding complementary products to the Web site, like furniture for game rooms, bars, poker tables and accessories.

"It's fantastic," Walker said. "You hear all this rough economic news and we're doing our best sales ever."

LOCAL COMPETITION

Pool Tables Direct has plenty of competition from other online pool table sellers, and it faces competition from big companies such as Ultimate Electronics and Sam's Club. Even Brunswick, the biggest name in pool tables, imports many of its tables and sells direct online.

Most tables, however, are still sold through local companies, which traditionally sold high-end, American-made tables, but now often also sell imported models. And several local retailers said their business is holding up just fine.

"We compete really well," said Greg Bennett, who owns Backyards and Billiards in Colorado Springs. "We do a lot of hands-on, we do a lot of explanation. I think particularly in big box stores, they're just not equipped to be everything."

A pool table is big, heavy, fragile and requires skill to assemble. A professional installer will charge $250 to $400 to set up a table (Pool Tables Direct charges $349).

"They probably aren't the easiest thing to put together," said Jim Barber, who owns the Antique Billiard Museum in Colorado Springs.

Add that up and Bennett says most customers are more comfortable buying a table in person.

"By and large, the buying public do want to see, feel, touch, talk to somebody," he said.

Robert Stuart, who owns Springs Spas, said the big-box stores and online sellers have cut out the bottom end of the game room business, but there's still a place for local retailers selling quality products.

"They want value for their money," he said.