By Thomas Heath
Monday, November 2, 2009; A09
Jeffery Morin's memorabilia business in Stafford probably isn't the next Google or eBay, but I love the 27-year-old's story because it's about a regular guy who saw an online opportunity and went for it.
Morin was noodling around on eBay, the auction Web site, seven years ago while serving in the U.S. Marine Corps aboard the amphibious assault ship USS Wasp in the middle of the Red Sea. He stumbled across some people selling old military memorabilia coins, about the size of a silver dollar, called "challenge coins." Challenge coins are collectibles used by the U.S. military to commemorate service in a unit or participation in an exercise.
"Poor man's coin collecting," as Morin puts it.
EBay customers were bidding $15 for coins Morin knew he could buy at a Marine Corps base for $5. So when he got back to Camp Lejeune, N.C., he marched to the base store and bought 30 generic Marine Corps coins for $4.50 each. (He persuaded the store manager to knock 50 cents off the $5 price.)
Morin took a photograph of one coin and posted it on eBay. It sold in three days for $11.50, yielding a $7 profit.
He was on to something. During lunch breaks, Morin would run to his barracks, package the coins into bubble-padded envelopes, address them by hand and walk them to the base post office for mailing; the envelope and postage for each coin cost him $1.05, which came off his profit.
As he moved ahead, he learned how to create demand for his coins.
"The whole point [on eBay] is to create a bidding war between multiple people. So I realized it was better to post only one coin at a time instead of three or four a day. If there was just one, I could sell it for $11. The more coins I stuck out there, the price settled down and sold for $7 or $8."
His mother lent him $500 to buy more coins, and he was quickly earning $300 to $500 a month from the business. Profits went in to buying more coins.
After about six months, he got an e-mail from an Ohio woman that would result in a big expansion for his nascent enterprise: She had seen his coins on eBay, and could he find a coin dedicated to mothers with sons in the Marine Corps?
"No problem," said Morin. He paid a fellow Marine $50 to sketch out a design. Then Morin jumped online, searched for "customer minted coins" on Google and found a Georgia company that would turn the design into a mold from which he could make his Marine Mother coins: $300 for the mold and $3.50 per coin. He ordered 100, and the bill came to $750 with shipping.
Morin looked at blogs to locate more mothers of Marines and found sites like Marine Parents United and Marine Moms Online. He joined the blogs to solicit customers and posted a sketch of the forthcoming coin.
The 100 coins sold out in less than three hours; Morin turned a $6.50 profit before shipping on each $10 sale.
"The demand was so high that I called the manufacturer that day and ordered 500 more," he said. The 500 sold out in three days, too. This time, the total profit was $2,500.
"I started to realize . . . there's some money to be made in this business," Morin said.
The burgeoning coin business outgrew his barracks at Camp Lejeune, so he recruited his mother to help from her basement in Stafford. He paid her 75 cents to address and mail each envelope. He also learned another important lesson: The $3.95 "shipping fee" he charged customers covered both the postage and most of the cost of each coin, adding to his profit.
The Ohio woman gave him an idea: Why not make custom coins for fathers, brothers, sisters and every other niche having to do with the Marines, from cooks to sharpshooters to infantry grunts? Soon, Morin sold coins that had meaning for every recruit who came through the Corps, expanding his potential customer base into the millions.
He found manufacturers that would make them for lower and lower prices, eventually finding a Chinese company that charged him 90 cents each.
By the middle of 2003, Morin had left the Marine Corps and was selling $15,000 of coins a month.
Then he bought a book that taught him how to advertise on Google using key advertising words like "custom coins" and "military challenge coins."
"We had orders pouring in," he said. "I had to hire customer service reps."
Within days, he got a call from Target, the retail giant, which led to a contract for 50,000 coins for a "Star Wars" movie premiere the retailer was sponsoring. Morin beat his suppliers down on prices, eventually paying 60 cents per coin and selling them to Target for $1.35. He pocketed around $35,000 on the deal.
Morin was 22.
In the past five years, Morin has expanded his coin business beyond the Marines to include other service branches, weddings, sports teams, and corporations such as Starbucks, Delta Air Lines and United Parcel Service. He hired a Web designer to jazz up the online site. He changed his company name from Marine Corps Coins to Coins for Anything and has expanded into trophies, pins and lanyards (the neck straps to which security badges or credentials are attached).
The enterprise now encompasses five companies that will generate around $5 million in revenue this year, with the coins and trophies representing the vast majority. His costs include $2.5 million for the products, $500,000 in payroll for 16 employees, and about $7,000 a month in rent on a 4,000-square-foot headquarters in a Stafford office park. He pays Google around $1 million a year.
I estimate that Morin's companies earn a net profit of around $1 million; he didn't deny that estimate. He is rolling most of that profit back into his enterprises. A competitor offered to buy the coin company for $4 million a couple of years back.
"I'm a serial entrepreneur," he said. "I get a high on taking an idea and starting new companies."
Next up: He and a buddy are partnering in the T-shirt business.
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