Chatting over sushi on a week night in the Café, seniors Robert Burns and Sarah Schoen seem like typical Bowdoin students?except for the fact that they just made more than $50,000 in profit with their recently founded computer resale business, which was founded just four months ago. And that is only the beginning.
The idea for the business first struck Burns last summer while he was working for the Maine Department of Education in Augusta. He learned of a program through the Maine Learning Technology Initiative (MLTI), which leases Apple iBook computers for every seventh and eighth grader in the state's public schools. After the computers' four-year leases end, MLTI buys the computers for about $40 each from Apple and sells them at extremely low prices in a surplus warehouse in Augusta.
Burns saw an opportunity for quick profit by updating the computers and reselling them on Web sites like eBay and craigslist.org. Burns, a computer science major, was familiar with easy and efficient tasks like reimaging a computer's hard drive and upgrading the memory chips, which greatly increases the laptops' selling value. In August, Schoen partnered with Burns on his entrepreneurial venture, and together they pooled their savings to buy 12 computers, planning to survive the remainder of the summer on canned spaghetti if their investment fell through.
However, the small-scale Internet scheme was so successful that it quickly escalated into a full-fledged business called Appleton Computers (both a play on the merchandise they sell and a tribute to Burns's first-year dorm). Following a lawyer's advice, Burns and Schoen registered with the State of Maine as a limited liability partnership in order to protect their personal assets. Within two months, Schoen and Burns recruited three Bowdoin friends and Burns's father as investors by offering a convincing sales history and handsome profit shares. The extra cash allowed them to expand the operation, and soon they were selling 90 to 110 laptops a month to customers in the United States, Canada, the United Kingdom, Ireland, and Germany.
Appleton Computers currently boasts a 100 percent customer satisfaction rate on eBay, but the Web site has been less than satisfactory for business. So far, eBay has suspended the business' activity twice without warning or explanation, which significantly disrupted sales.
"We believe that they thought the computers were stolen. It was like: suspend and ask questions later...There was a real lack of communication," explains Schoen. During the three weeks it took to straighten out the matter, the pair would probably have sold well over 40 computers, so the setback was "a major hit."
Another difficulty Schoen and Burns have faced is discerning reliable buyers from scammers. They have been warned of certain groups from Africa and Asia that send fake money orders, so Schoen and Burns personally monitor all the e-mail purchase requests they receive carefully.
Despite a few bad experiences, Schoen enjoys dealing with the customers and occasionally makes generous exceptions in order to please them: "Sometimes we'll get messages saying things like 'I'm a single mom, I'm working two jobs, I could really use this computer, but I can only afford to pay this much' and we'll say 'Okay, you've touched our hearts, that's fine.' Then we'll get a follow up message that says 'This really means a lot to me and it made a big difference in my life.'"
Over Winter Break, Schoen and Burns attended the Consumer Electronics Show in Las Vegas, which is the largest industry-wide convention.
"We went there to find some more business contacts. We talked to a few people, and we didn't really find too many people who would sell us Apple computers, but we found plenty of people that would sell us other electronics, like digital cameras, so we're toying with the idea of branching out into more than just computers right now," Burns says.
Schoen and Burns also hope to develop their own Internet auctioning Web site and enlarge the business to include textbooks. They want to market the site to students on a budget by posting links on university Web sites. However, at this time both Schoen and Burns are unsure of their post-graduation plans.
"The greatest part about running an Internet business is that you can live anywhere in the country and still operate," Burns said.