A Website as Big (and Cheap) as the Great Outdoors – Thanks to its stingy, ski-bum culture, BackcountryStore.com has become the second-biggest outdoor gear specialist on the Web.

Backcountry skiers, those intrepid types who forsake chairlifts and well-groomed runs for the challenge of blazing their own way down a mountain, have to get by without the comfort of an obvious route.

By Duff McDonald, Business2.0

It makes perfect sense, then, that Jim Holland and John Bresee, two self-described ski bums, have negotiated their own path to success. Their BackcountryStore.com, started on $2,000, has turned a profit for five years straight and is now the No. 2 online outdoor gear seller, behind REI, offering products from Black Diamond, North Face, Oakley, Rossignol, and more than 150 other brands. Holland, a six-time U.S. nordic ski-jumping champion, and Bresee, former editor of Powder magazine, built their company without any outside investment and expect to ring up $15 million in sales this year. "Ski bums know how to make a nickel scream," CEO Holland says. Want to follow their path down the e-tailing slope? Here’s how to let it rip.

Adopt (then adapt) free software

Holland and Bresee chose an open-source application called Interchange to process transactions. They also went with an open-source database for product and inventory records. Then, for about $200,000, they custom-tailored the software, saving the millions they would have paid for commercial products.

Get others to do your marketing

"Your choices are clear when there’s no money in the bank," says Bresee of his decision to forgo advertising. Instead, he signed on "affiliate marketers" — partners who refer customers to the store in exchange for a piece of any resulting transactions. There are now 6,500 affiliates, whose cuts range from 7 to 10 percent, depending on volume. As marketing expenses go, it’s worth it: Backcountry’s spending remains strictly proportional to sales.

Don’t promise what you can’t deliver

Holland and Bresee found that customers were turned off by shipping delays, so for this holiday season, Backcountry’s 18,300-square-foot warehouse will stock millions of dollars in inventory. To avoid disappointments, Backcountry’s Interchange software displays real-time inventory on every product page. And to maximize sales, when new shipments arrive at the warehouse, items are made available for purchase within the hour.

Replace consultants with no-frills online tools

Who needs focus groups when your users tell you exactly what they want? Search requests and Web traffic logs provide better, cheaper data than costly surveys. Backcountry uses services from Atomz for the site’s search engine, and WebSideStory for analytics to determine how customers make their way to a purchase. That’s how Backcountry knows which promotions offer the best payoff.

Maintain frugal, but fanatical, customer service

Holland and Bresee knew competing on price alone would yield fickle customers and slim margins. So they persuaded fellow ski bums to become phone reps — and reward them with free gear not for making quotas but for spending nights in a tent or testing hiking boots. That way, customers can talk to salespeople with firsthand knowledge.

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