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Who Wants $300 Hot Sauce?

Slide Show >>Hot sauce enthusiast turned entrepreneur Nick Lindauer is on fire.

In 2001, while still in college, he launched the online store Sweat 'N Spice out of his Springfield (Ore.) apartment. He sold a few dozen types of hot sauces, packaged each order by hand, and shipped everything from his local post office, barely eking out a profit during his first year of operation.

Today, Lindauer sells over a thousand products from some 300 manufacturers. His inventory goes beyond sauces to include seasonings, relishes, and snacks with clever names, oddly-shaped collectible bottles, celebrity-endorsed offerings, along with concoctions that are so blisteringly hot customers must sign a liability waiver upon purchase.

Prices run from $4 for El Yucateco brand sauces to $300 for hand-signed, limited-edition bottles of Blair's 16 Million Reserve, the hottest chili powder extract known to man. Lindauer and his two full-time employees operate out of a Midtown office in New York City. In 2005, the business grossed around $130,000. He forecasts $200,000 in 2006.

HOT BLOG. Lindauer says he owes much of his success to his blog, where he dubs himself "Sultan of Sauces," and offers the hot sauce community news, reviews, recipes, contests, and interviews with prominent vendors.

He explains that the blog is a separate entity from his online shop—it has its own domain name and advertising—but it helps build his credibility and drives traffic to his store through a few strategically placed links on its navigation bar. Lindauer also establishes relationships with many of his vendors in person at industry events and helps in the creation of smaller manufacturers' sauces before they go to market.

Making a living from hot sauce wasn't his original goal, says Lindauer, a longtime champion of spicy foods and an avid collector of exotic hot sauces. The whole enterprise was more a labor of love. "I got really into collecting and decided if I'm doing this, there's got to be other people out there doing it," he says. He figured they'd want a place to trade opinions, and perhaps order a hard-to-find bottle.

A SAUCE SUBCULTURE. Lindauer was right. At industry gatherings like the annual National Fiery Foods and Barbeque Show, in Albuquerque, N.M., he discovered a subculture of superhuman eaters who call themselves "chileheads;" a class of connoisseurs with a passion for rare and intense hot sauces.

Lindauer felt right at home. He had also stumbled onto an industry that is worth close to $2 billion, according to the estimate of leading spicy foods authority Dave DeWitt, editor of Fiery-Foods & BBQ magazine.

Lindauer is now making plans to open a brick-and-mortar shop, even though he and experts in the industry acknowledge that the niche market is too small to make it a sure success. "You've got to sell a lot of hot sauce to pay rent in Manhattan," says Dave Hirschkop, owner of hot sauce and specialty foods manufacturer Dave's Gourmet, one of Sweat 'N Spice's premier brands.

Click here for the slide show

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