and globalization are critical factors in reaching a wider audience and increasing brand awareness.
“Prolonged success online is rooted in an old line company practice: keep profits flowing in. If your site doesn’t have a real revenue generating model, it will fail,” warns Karen Lake, founder and CEO of StrategyWeek.com, in Portola Hills, California. There are different revenue sources, including equity, transactions, licensing, advertising, and sponsorship. How quickly you achieve results may well depend on whether you’re a pure dotcom or a clicks-and-bricks site (marriage between online and brick-and-mortar).
The first order of e-business: Assess which e-commerce model best suits you. The following e-businesses illustrate the wide range of possibilities and opportunities.
As the mother of a 3-year-old daughter, and an avid reader and shopper Gwen Daye Richardson had a hard time finding children’s books, games, and toys with an African American theme. In December 1998, she and her husband Willie decided to open an electronic storefront-Cushcity.com-which was a lot cheaper than building a brick-and-mortar bookstore. “We used a free Internet software called Bookware, an online shopping cart that let us interface with potential customers,” says Gwen, who is the Website manager.
Cushcity.com focuses on a wide range of products, including Afrocentric books, videos, calendars, Greek paraphernalia, collectibles, toys, clothes, software, and educational items.
After launching the dotcom on a shoestring budget, the e-tailers were able to secure private investments totaling $200,000 in their first year of operation. By the end of 1999, Cushcity.com generated $160,000 in total sales revenue. A Cushcity catalog, which is published twice per year, usually produces higher sales figures than the Website-mostly from repeat orders-for a few weeks after publication. The Richardsons expect the site to do $1.2 million in sales this year, although the company won’t make a profit until the year 2001.
In the beginning, customers had their pick of some 650 books and 50 different videos, but they began to ask to see other products on the site. “We had a very responsive e-mail system. We responded to people (queries) in two hours. Customers were very impressed,” she explains.
The couple’s entrepreneurial endeavors actually began six years prior to Cushcity, when they published Headway, a monthly, national, public affairs magazine. Then came their interest in the e-tail business. “The first day we got online, we began to get a lot of orders and in three months time we stopped publishing the magazine [to concentrate on the online venture],” says Gwen. Today, Cushcity is one of the most heavily-trafficked African American e-commerce sites, averaging 1,000 hits per day.
Netpreneurs, like the Richardsons, who are willing to constantly update their sites in response to consumer demands and needs, will fare better online. Even the best Websites need periodic updating to correct mistakes, reflect company changes, and keep the site interesting.
–Tanisha R. Hopson
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