Richard Kohl: This is No Retirement Party

Richard Kohl may be 70, but he sure knows how to party. As the head of a big family – he’s got four children and six grandchildren, while his second wife has four children, 15 grandchildren and two great grandkids – Kohl has hosted and attended lots of family functions in his day, and now he’s on a mission to make it an exciting, fun and pleasurable experience for others to throw their own shindig.

Kohl’s affiliate site, MyPartyMall.com, is a virtual mall that brings together at one site everything someone would need to create, plan and throw a hugely successful party. Kohl says he and his second wife were looking for a business they could operate together out of their home. They wanted to supplement their retirement income, but they also wanted to do something that would “stand out in the crowd.”

The online world was relatively unfamiliar territory for Kohl, but trying his hand at new businesses was not. “I’m not afraid of failure. I’ve had my share of it. But I’ve always liked business and have always been involved in selling and marketing. I love reading Forbes and Fortune and Business 2.0,” he says. “I’m not afraid of calculated risk. I’m not the type to get in a hot-air balloon or bungee jump, but I like the calculated risks of business.”

His previous lines of work included a stint selling insurance “back in the day” and owning his own business selling water softeners via direct sales. He later did some consulting setting up dealers in the water softener business. In the ’80s Kohl was thinking about a new business. He did some research and discovered that home burglar alarms had some big potential.

“We thought that would be a good business for us,” Kohl says. “I figured I know business and this looks like a great opportunity.”

He was right. Business boomed and Kohl expanded to three offices. But in the early 1990s his first wife, Jeannette, was diagnosed with Alzheimer’s disease. As the disease progressed he built an apartment for his wife next to his office and brought her to work with him. That only lasted about a year, however. “I couldn’t concentrate on both,” he says. He then sold all his businesses to raise enough money to pay for his wife’s medical care and be her full-time caretaker until she passed away in January 2004.

After his wife’s death, Kohl became more interested in the online world. Two years earlier, he had bought a used computer at a garage sale, but didn’t use it much, going online occasionally to look for new home-based business opportunities.

He didn’t see the real value of the Internet until he signed up for a Christian dating service, where he met Joan, whom he married in July 2004. “She lived 200 miles from me, and the Internet brought us together,” Kohl says. “That’s when I realized the Internet was very worthwhile.”

As the retired newlyweds started their new life they were looking for a business that allowed them to work together out of their home. “I was aware of affiliate marketing at that point but didn’t know how it worked,” he recalls.

Kohl did some extensive research into keywords. He looked at the inventory at Overture. He found that more than 280,000 people were looking for party supplies. That intrigued him, so he looked at more than 350 party shops online. What he found was that no single site brought all aspects of planning a party and buying supplies for all kinds of celebrations and events into one place.

He also went to a costume and party trade show in Chicago and realized that party shops are a $20 billion-a-year industry, with more than 5 million people searching for party supplies. Then he recalled a story about a friend’s daughter who spent more than $400 for her daughter’s Barbie-themed birthday party. He also remembered there was not a party shop in their little town of Williams, Iowa (population 425). The closest one was 35 miles away in Ames.

“People either went to Kmart or the local drugstore like Walgreen’s and picked out party supplies from whatever they had, which wasn’t much,” Kohl explains. “I wanted a site where a mother or father having a party could find everything for that party: decorations, supplies, gifts, apparel, dresses and invitations.”

He adds, “Back in 1973 I had a rack-jobbing franchise and did a job for a party supplier in a supermarket. I figured the affiliate thing would be like having 100,000 locations of party racks in one place.”

So, the couple started MyPartyMall.com in October 2004, when Kohl wrote a business plan, which included a mission statement, a business operation manual and a business marketing manual. “These were the three areas to help keep my wife and I focused on our objective of creating a one-stop party shop online,” Kohl says.

In December 2004 he contracted with a firm in California to build the site. He says he knew how he wanted it laid out but had no knowledge of how to create a website.

“I didn’t have anything to go on other than my gut. We ended up changing the site nearly 100 percent once it got up there. It wasn’t the look and feel I wanted, but now it’s totally what I was looking for. I wanted it to be usable and repeatable, and I’m not disappointed,” he says.

They signed up as a publisher with all the major networks, including Commission Junction, LinkShare, Performics, Red Galoshes and ShareASale, and began putting merchants on their site last May. As of November, MyPartyMall.com had 28 shops and more than 230 merchants.

The Kohls spent most of that stretch from October 2004 to the launch of their site in July 2005 immersing themselves in the world of affiliate marketing.

The first newsletter Kohl subscribed to was Rosalind Gardner’s Net Profits Today and her book The Super Affiliate Handbook was the first one he bought. “In total, we have purchased 14 books and have subscribed to nine magazines on the subject of marketing, the Internet and affiliate programs, as well as numerous online e-zines and newsletters,” Kohl says.

Getting familiar with affiliate marketing has been challenging. “It has been a real experience as neither of us had much computer or Internet knowledge when we started,” Kohl says. “Sifting though all the hype and clutter and not knowing who had the real scope has been challenging and somewhat expensive, but isn’t education always that way?”

The couple claims they have learned a lot about affiliate marketing in a very short time and they continue to get educated. “I doubt if the education process in this business is ever completed,” Kohl says. “One thing I can say for certain is, your startup will cost twice as much as you figured and will take twice as long to complete it, and this is a neverending project.”

Kohl loves to learn new things and is always soaking up information. And when he thinks something is a good idea, he acts quickly. In early November he launched a blog at MyPartyMall .com after reading a cover story on blogging in Forbes magazine and an article in Revenue’s Fall 2005 issue, and after chatting with the Revenue photographer sent to take Kohl’s picture for this article.

“I had recently been reading about how blogging was an excellent way for businesses to promote themselves and drive traffic to their sites. I didn’t really understand even what blogging was when I first read about it, but then I saw another article explaining it. It seemed like a great idea. Then the photographer Revenue sent had a blog and was talking to me about it. I practically set up the blog during the photo shoot.”

For Kohl, who loves to create new businesses, learning is a big part of the fun, but so is being able to set his own schedule and work at home with his wife, who does the bookkeeping.

The couple’s command center for MyPartyMall.com is their 14- square-foot dining room, which is filled with three computers (one for Richard, one for Joan and one strictly for record keeping and word processing). There are also three printers, three phone lines, a fax machine and a copier. They now have satellite access to the Internet, as they immediately found their dialup connection just wouldn’t cut it.

Despite being retirement age, the couple adheres to a strict work schedule.

“We are not retired people doing this part time,” Kohl says. “We spend eight hours every day working on this business, but it’s an enjoyable type of work.”

The Kohls are up by 7 a.m. every morning. Then it’s down to the kitchen for a coffee and light breakfast, followed by one hour of bible study and reading before getting started at work around 9:30 or 10 a.m. They head out for lunch late in the afternoon, return around 3 p.m. and work until 9 p.m. when the computers are all shut down. Sunday is a day when the computers are never turned on, and the Kohls seldom work on Saturday.

But even when they aren’t sitting at their desks officially working, they are out promoting their business.

Think Local

To begin marketing their new business, the Kohls initially took an old-fashioned approach, spreading the word to family and friends. They also spent much of the summer attending county fairs (they went to about a half dozen) to market the site and gather opt-in email addresses. They came away with more than 500, and that list has now grown to over 800.

Kohl jokes that it’s mandatory that everyone in his family use MyPartyMall.com whenever there is any kind of family celebration or gathering.

“There are three weddings coming up in the family. We also promote our business at church. And every time my wife sends a bill she includes a business card. Also when we go out to eat we leave a card. And we also leave them with the receptionist at the doctor’s office and whenever we visit a local business,” he says.

So far, much of MyPartyMall’s traffic is coming from friends and family and those who stumble on it by accident. And Kohl also sent 35 press releases to local newspapers. But the Kohls have yet to begin doing any search engine marketing. “We haven’t spent much time yet learning about search engines and the best ways to get better results. This is something we are exploring but don’t have a good handle on yet,” Kohl says.

To date, Kohl is pleased with how well MyPartyMall.com has done. In July his site’s ranking on Alexa was around 3.8 million out of 16 million sites. When he checked again in October it had climbed to 1.8 million.

He explains that his initial idea was to “be a local operation and mass advertise in a town,” but he also wanted to have more control over his income.

That’s why MyPartyMall.com has a banner advertising program (he calls it relative advertising) for offline merchants, whereby their ads are placed on relevant pages. For example: Bakery shops could advertise on MyPartyMall.com’s birthday or wedding pages. Catering services can advertise on the pages for bridal showers or wedding shops.

Just two weeks after offering this to offline advertisers, the site had more than a dozen merchants on board. “There are 40 offline merchant categories that are very relevant to our online merchant sites,” Kohl says.

He adds that this form of advertising gives him some control over his monthly and yearly income.

“I have far less control over the affiliate part of my business. This allows me to have total control over some element of my income. It also helps the local retailer since the consumer is already in a buying mode.”

Selling this ad space also fit in perfectly with the overall goal of the Kohls, which was to ensure they made a certain amount of money per month. Originally, they were aiming for $500 per month to supplement their retirement income. That goal has changed. They are won’t give out their target, but did note that they want to fund several missions that their church is involved in as well as send at least four of the grandkids to a private – and very pricey – Christian school. They’ve got about two more years before those grandchildren are eligible to enroll, and the Kohls are confident they’ll have the necessary funds when the time comes.

Meanwhile, in early October, the Kohls attended a family reunion. Not only was it a chance to catch up with far-flung family members, it also was a great opportunity to pass out lots of business cards.