Starting an E-Business From Scratch: Part 4

In our series we've covered just about every major nut and bolt. We have talked about the available operating systems, and our choices. As you remember, we chose a flavor of Unix, FreeBSD. We then chose Roxen Challenger as our Web server software, and ShopSite and their installation. Most importantly, we talked about cost.

Now let's look at two different types of businesses and see how they've used the tools described in this series to their benefit.

Our first case study highlights a very small company that is sub-leasing space on a FreeBSD system, utilizing ShopSite. the company's intent was to save processing costs and bring itself and hopefully its customers into the Information Age.

The second case study shows a nonprofit organization that has followed the blueprint that we demonstrated in this series. With a large user base, they need ways to speed the delivery of merchandise to their members, and have complex dynamic issues to tackle (such as membership renewals) in later phases of the project.

Case Study 1

Ahead Equipment is a small provider of bindery equipment and supplies in Deer Park, N.Y. Anthony Zuaro, the owner, needed a solution where he could lower his cost of operation as it related to order taking.

Zuaro found he and his office staff was spending way too much time on the phone taking simple, straightforward orders. With an eye toward eliminating the cost of maintaining and producing a printed catalog, plus limiting his order taking costs, he chose to use an e-commerce solution.

ShopSite was suggested to Mr. Zuaro as a package that could meet the above-mentioned goals, plus meet three additional criteria--a low budget, an interface that he or a member of his staff could manage (create the shop) and an interface his customers could use.

Key to the decision to keep the budget low was not only his companies' lack of computer and Internet savvy, but also his impression of his customer base. They, his customers also have limited amounts of Internet savvy.

"Why throw large amounts of money at a problem, when my ultimate users may take years to use it," Zuaro says on implementing a large-scale, full-featured e-commerce project.

While Ahead Equipment accepts major credit cards, Zuaro felt the additional fees charged by the banks to clear Internet credit card orders, plus an uncertain acceptance was not worth the implementation costs for online credit card transactions. This uncertainty also limited his purchase to the ShopSite Pro product vs. the ShopSite Manager package. The chief differences between the two are price and a built-in search engine.

Did the project meet expectations?

After a 20-minute phone training session, plus a few more e-mails, Zuaro was able to create his e-commerce web site. To this day, he maintains the product mix, and all the individual shop pages.

Has the experiment paid off? According to Zuaro, it has. While it isn't the sales bonanza one would expect, it has paid for itself, and each month, more orders are being placed through his web site.

"In my segment of the industry, e-commerce is more hype than hip--it will take some time for it to catch on," he says.

Asked if he thinks he can ever replace his fax machine and in-house sales people, Zuaro says, "Replace, no, but I won't be buying fax toner as often."

Case Study 2

The United States Power Squadrons (USPS) is the largest nonprofit boating organizations in the United States. Known for their public safe boating course, taught to hundred of thousands of boaters each year, the USPS has over 66,000 members in and out of the U.S. Approximately 10 percent of the membership is thought to be Internet literate, with only 1 percent known to participate in the USPS' Internet-based offerings (e-mail lists, newsgroups, etc).

The USPS maintains a 'Ship's Store' that sells clothing, jewelry, and assorted other items. The requirements for the USPS were similar to Ahead Equipment's: An easy to use product, that could, if proven to be successful, be expanded. USPS already runs and maintains a FreeBSD server, with all the software described in this series, so it was just a matter of adding an e-commerce package.

Again, ShopSite was chosen, specifically ShopSite Pro, because of the low initial investment, and the uncertainty that Web-based credit card sales would be successful. Members in USPS are very conservative by nature, so a large investment in dollars, saddled with the unique nature of a volunteer organization, made selection of an e-commerce package somewhat unique. Overriding factors were low-cost, expandability and again, ease of use for both the Web master and the end user.

Other projected uses (in phase two of the project) for the e-commerce server are membership renewals, requisition of supplies, forms and educational material. ShopSite has the ability to export the product database to a text-delimited file. This file can then be imported into Excel, manipulated and then exported/imported back to ShopSite. In the future, membership renewals will be handled on a monthly basis by this process. While not 100 percent automated, it does with limited amount of work, meet the needs of the organization--at least in a phase one project.

Did the project meet expectations?

Acceptance in USPS is slow, but by all accounts, this project has been a very successful endeavor. Last year, 89 orders were placed thorough the Internet (the project began in April 2000). This year, each week approximately 10 orders are placed through the Ship Store--a 100 percent increase over last year. All orders are currently for merchandise.

Decreased processing costs for these items (orders are still taken by phone, fax and regular mail) have already brought about a positive return on investment for the e-commerce software. Just the ease of reading the order itself has increased productivity.

In the future, all intraorganizational orders (educational material, forms, etc) will be managed by an e-commerce system. It provides the members of USPS a central avenue in which to conduct transactional types of business. It will further reduce costs, since members will no longer have to pay long distance phone calls (for faxing) or add postage to envelopes to mail purchase orders, order forms and checks to the national headquarters.

Editor's Note: Wayne Spivak is the volunteer CIO of the United States Power Squadrons, and the Consultant to Ahead Equipment.