Changing dynamic
Internet pioneer Indigo Instruments relies on agility
WATERLOO — It’s not that much of a stretch to call Waterloobased Indigo Instruments an internet pioneer.
The science equipment supply company launched its first website in 1994 — the same year that saw sites for Yahoo and the White House go live.
By the end of that year, the Indigo site was one of only about 10,000 websites worldwide, according to a study by an MIT researcher. Today, there are more than 1.2 billion and counting.
So with 23 years of internet experience behind them, Indigo’s owners, Stephan and Andrea Logan, know well the challenges and advantages of running a small, independent online business.
In those years, “the dynamic has just changed,” Stephan Logan said.
In the face of increasing and aggressive competition from internet retail giants, Indigo has countered with quality, knowledge and service.
“We buy quality,” he said. “We know the people behind our products, we answer our phones. If somebody asks us a technical question, it’s pretty rare that we’re stumped.”
With their science backgrounds, the Logans purchased a business called Pinetree Instruments, which included Indigo Instruments, in 1990.
Today, with a staff of eight, Indigo distributes such items as molecular models, test strips, magnets and supplies such as magnifiers, lab glassware and tools.
One of its large DNA models — designed by a University of Toronto professor and assembled by Indigo — has been seen by fans of “The Big Bang Theory” for about a decade now as a set piece.
“Talk about brand recognition,” Logan said. “Who would have thought, a little company in Waterloo?”
The television prop is actually two models stitched together with an unseen support rod; the Indigo team has since figured out a way to assemble the full-size model without needing the extra support. Aside from a Burbank TV studio, Indigo’s client list includes corporations, government and academic institutions across North America.
“To survive in a very niche market in Canada can be a challenge,” Logan said. The American science market is 50 times the size, he said — bringing Indigo more opportunities, but more competition as well. “I think agility is certainly as important as anything.”
One of the biggest hurdles Logan faces as a smaller online retailer surrounds shipping and postal rates.
Indigo charges shipping rates at cost — a necessity, Logan said, when many of its lower-cost items sell for under $10. “How do we give free freight when we have to pay $8 to ship it?”
Still, the lure of free shipping dangled by some of the large online retailers can tempt customers. Logan argues that offer is largely a myth, with shipping costs factored into the price of the item.
A comparison of several identical products offered by Indigo and a large online retailer, ranging from models to chlorine test strips to insect mounting pins, show Indigo’s total costs including shipping to be considerably lower in many cases.
He also questions some of Canada Post’s pricing strategies, arguing that customers who ship parcels are “subsidizing” letter mail.
As an example, a small, 200-gram box sent by regular parcel service from Waterloo to the University of British Columbia costs $15.63; a 200gram large envelope sent via letter mail would cost $3.33.
And Logan points out that it costs more to ship a small box from Waterloo to St. Thomas, about 130 kilometres away, than it does to Quebec City.
Shipping rates to smaller communities do carry a slightly higher price than to larger urban destinations, explained Canada Post spokesperson Phil Legault. Larger destinations in Ontario and Quebec are treated similarly, although tax rates differ (five per cent GST in Quebec versus 13 per cent HST in Ontario).
“Parcel delivery in Canada operates in a competitive market,” Legault said in an email.
“Companies determine their shipping rates based on several factors including parcel weight and size, the distance between origin and destination, as well as the costs of processing, transportation and delivery.”
Despite the challenges, Logan says the online retailing experiment he launched more than two decades ago has paid off.