Munson tried posting an ad to sell cassettes on Genie, an early commercial Internet service. It was immediately taken down. The Net wasn't commerce-friendly in those days. According to Munson, before it was taken down, an attorney in Washington advised him to put a post on the Grateful Dead's mailing list. Taking that advice, Munson posted on several mailing lists. In those early days success came incredibly easy -- there was no competition. By the end of 1989 he had a steady stream of orders; within a couple of years his online business was doing a good job of "paying a lot of the bills."

It wasn't until 1995 that Munson put up a Web site, CassetteHouse.com. "It wasn't very sophisticated, and it's still not. I was never as interested in sophistication as usability and people being able to find what they want." In the mid 1990s, domain names like Tape.com were available for the taking. Munson grabbed it.

Though successful, running the business took its toll. "My wife and I were packing all this stuff ourselves, doing it out of one room initially," he says. "We'd have 20, 30 orders a day at that time. To process the orders, print them up, do the labels, pack them up -- at the end of the day we were exhausted."

Three Tools
Munson and his wife, Robin, eventually moved from L.A. to Nashville. And it was there, in 1999, they discovered the answer to their shipping woes: a fulfillment house. "All of sudden, we didn't need to pack anymore," Munson says. They bought cassettes, VHS and digital audiotapes wholesale from large suppliers and had them shipped in bulk to National Fulfillment, a Nashville-based company, which managed all the packing and shipping on their behalf.

Another tool that Munson credits with helping build the business is a software package called Mail Order Manager. Munson takes all the sales data customers enter at his site (number of tapes, type of tape, address, etc.) and automatically imports it into Mail Order Manager. He then uses this data to send orders to his suppliers.

"I've always been a fan of not entering any data myself," Munson says.

Yet another of Munson's tools is decidedly old school CRM: the telephone. "As the Internet has matured, more people get afraid of it," he says, with a chuckle. "Customers have specific questions, and they want a human being -- 'Can I use disc for this, for that?'"

He tried hiring a call center, but the salespeople didn't know his products. So he handpicked two knowledgeable order takers, who work from their own homes. One lives in Fontana, California and the second in Chicago, while Munson's main office continues to be in L.A. According to Munson, since he hired his two employees, sales have increased dramatically.

Scaling Up
Munson dreamed of scaling the business larger, to improve and streamline operations. He wanted "one central core," a computer system his phone salespeople could use to place orders directly into Mail Order Manager. Prior to this, they entered orders through the Web site, which added an additional step to Munson's workload.

He hired a computer expert to set up servers in his L.A. office. In order to enable remote access to his servers for his phone salespeople, Munson decided to use a program called GoToMyPC, a consumer service that enables individuals to have unlimited access to their computers from any Web browser.

"All you need is a computer and a high speed connection," Munson says. His salespeople in Chicago and Fontana now place orders directly into the Mail Order Manger program located on the L.A. server.

Furthermore, GoToMyPC allows Munson direct access to the computers of his remote order takers. He can sit in L.A. and watch them work, and if there's a problem, he can troubleshoot remotely. (Munson also admits he's a control freak.)

Munson also faced another logistic hurdle: he has two order takers but only one 800 number. How could he route customer calls to the second order taker if the first was busy? According to Munson, the local phone company couldn't do it, so he researched around the Net and found a service called AccessLine.com. The service provider handles all call routing on his behalf. For example, incoming calls are directed to the first employee, and if there's no answer or they are busy, it's automatically rerouted to the second.

Mr. Redundant
Munson uses a cache of domain names: CassetteHouse.com, Tape.com, Blankmedia.net, TapePlus.com, CDRplus.com, and VHStapePlus.com, which, according to Munson, are all separate stores.

A lot of Web entrepreneurs do this, he says, with a twofold strategy: First, to be caught by more of the search engines, and then dedicating the site to one product makes shopping easier. "If that's all a customer is looking for, they don't have to wade through all the other stuff," he explains.

Munson uses Yahoo to host most of his domains, with Verio hosting Tape.com. "I want a back-up site, because if [one site] goes down I want to point someone to somewhere else." So Tape.com is "on a totally different server, in a different store -- I'm Mr. Redundant."

Avoiding Inventory
As Munson's business has evolved, he holds less and less products in inventory. Now he favors the "virtual" selling that many Net retailers dream of. He has arranged with multiple suppliers to drop ship directly to the customer, greatly decreasing inventory costs. He still uses National Fulfillment to inventory about 100 of his more than 1,200 products, but the majority are shipped directly from wholesalers.

"I started this about a year and a half ago, and business has been better than ever because of it. I can keep up with prices better," he says. "The suppliers have to charge me a bit more because they're dealing with smaller items. But some of them have agreed to ship out [as few as] 100 CDs."

Mailing List Gold
Since 1989, Munson has amassed a customer database of 17,000 former buyers. He refers to this database as a "goldmine," because it allows him to track customer buying habits. He doesn't send out mailings to the entire list; instead he sends targeted e-mailings based on past purchases.

For example, he sent an offer to 1,200 previous buyers of mini-discs. "I got 65 orders out of it, some of them real large orders," Munson says. "Out of that, maybe I get four or five people who say 'take me off the list.'"

The only other type of marketing Munson does is buying keywords in search engines. He buys on Google and Overture, though he's been less impressed with Overture's results. He keeps his keyword bids to a minimum and tracks results to make sure his keyword buys are profitable.

Munson's longevity helps his search engine ranking. "By virtue of the fact that we've been there for so long, we have pretty decent positioning on most all the good keywords," he says.

Munson has succeeded in his dream of scaling up the business. From his first mailing list post on Genie, the business today has evolved to a revenue level of "in the low seven figures" according to Munson.

Yet, he's still working on achieving his ultimate goal. "My biggest thing is trying to get out of being here every day to process orders. Once I have that solved, I can go away for a week and not have to think about it too much -- that's our dream."