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Business

Envelope firm survived by making the leap to online sales

Seth Newman, CEO of the Amityville-based online envelope

Seth Newman, CEO of the Amityville-based online envelope company Envelopes.com, with his mother, Sharon Newman, now retired, in the warehouse of the company's headquarters, on May 20, 2016, in Amityville. Photo Credit: Heather Walsh

Envelopes.com revamped its website earlier this year — for the eighth time since 2000.

The latest redesign added new envelope design options and improved the site’s mobile optimization.

“We’ve continued to do a complete site redesign every two years to stay current,” says Seth Newman, CEO of Amityville-based Envelopes.com. “We have to constantly evolve.”

And evolve it has, considering the firm only transitioned to an online envelope company 16 years ago. Since then, it’s grown from five employees to 90.

“If we didn’t transition to the internet, we would have been out of business a long time ago,” says Newman, 39, whose late father, Ken, started the firm in Queens in 1971 as Action Envelope.

To be sure, the envelope industry has been impacted by such factors as the recession and the digital age. To survive, firms have had to diversify.

“Traditional envelope companies cannot stand still,” says Maynard Benjamin, president and CEO of Alexandria, Virginia-based EMA, the trade association for the envelope printing industry. “They have to innovate in some way.”

Many companies have diversified beyond just envelopes into areas such as packaging and others, like Envelopes.com, have transitioned online, selling directly to the consumer.

About 10 percent of the industry is selling via the internet, Maynard notes.

“It works very well for smaller-volume orders,” he says, noting it’s been a successful model for Envelopes.com.

Ken Newman started the firm as a brick-and-mortar printing brokerage firm, outsourcing print jobs until 1987 when the company started printing envelopes in-house. In 1993, when he died suddenly of a heart attack, Seth’s mother, Sharon Newman, took over the firm.

The day Ken died, he’d taken out a $5,000 loan to meet payroll, Seth recalls.

It wasn’t until 1998 when Seth joined the firm that he made a push toward moving online, even designing the firm’s first website, ActionEnvelope.com, in 2000.

At first, Sharon was skeptical about who’d buy envelopes online.

“It was unheard of[at the time],” says Sharon, 69, a stay-at-home mom for 18 years who had returned to work as a teacher less than a year before her husband died.

She quickly became a believer once they started getting out-of-state phone calls, she notes. Up until then, they’d served primarily Long Island and some New York City clients, says Sharon, who retired as CEO in April 2015 after attracting a significant investment from TZP Group, a Manhattan-based private equity firm. The Newmans did not disclose terms of the deal.

The company operated as ActionEnvelope.com from 2000 until December 2009, when it acquired the name Envelopes.com. The Newmans had been approached to buy that domain name for $10,000 in 1997, but being so small at the time, they declined.

A year later when they decided to buy it, the name had been sold to a direct marketing company. After years of negotiation, they finally acquired the name Envelopes.com for $400,000 — 40 times the original asking price.

That kicked off a four-month rebranding effort in January 2010 as they transitioned to Envelopes.com. They’ve since purchased hundreds of envelope-related domains, including Envelope.com.

Controlling domains with similar names can be a smart move, says Alex Schmelkin, CEO and co-founder of Alexander Interactive, a Manhattan digital agency that worked on some of the firm’s earlier web redesigns.

It also helps to have clearly defined goals for what you want your site to accomplish, he notes. The key is to think about how your customer shops and meet them where they are, advises Schmelkin.

“With brick-and-mortar stores, you can greet customers with smiles and conversation,” he explains. “Online, your introduction is different but must be just as engaging and customer-focused.”

With that in mind, Envelopes.com is looking at digital technologies that connect “the offline world to the online world,” Seth says. For example, they will soon offer online invitations in addition to printed invitations on their website, as well as give clients the ability to receive RSVPs online to the print invitations they send out.

They’ve also diversified their product line to include packaging-related products like party favor boxes, and later this year will launch Cardstock.com, a site for specialty paper products.

“We have a lot of room to grow and gain market share,” Seth says.

At a glance

Company: Envelopes.com, Amityville

CEO: Seth Newman

Product: Envelopes, packaging, cards and specialty paper products

Customers: Serves over 100,000 businesses and consumers annually

Employees: 90

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