Practical Ecommerce

Lessons Learned: Priceshoppe.com CEO

“Lessons Learned” is an occasional series where we ask seasoned ecommerce professionals about their mistakes and successes. For this installment, we’ve asked Frank Dappah, the CEO of Priceshoppe.com, a Charlotte, N.C.-based retailer of consumer electronics, movies, games and music. Priceshoppe.com was launched in August 2005. Its gross revenue for 2007 was $1.8 million. It has seven employees and it offers approximately 74,000 separate items on its website. What follows are Dappah’s experiences and suggestions.

On general advice for ecommerce merchants.


 
“Concentrate on your core business and satisfying your customers. Do not get too carried away by technology and what’s popular at the moment. Identify your market and service it; do not try to be everything to everybody.”
  


On sources of inspiration.


“I am a big fan of Dr. Patrick Byrne, CEO of Overstock.com, and Patricia Gallup, CEO of Pcconnection.com.”
  


On shopping cart mistakes.



“It was a big mistake going with a cheap shopping cart that ended up giving us a whole bunch of problems. There are some things you just have to pay for the best or close to it, and a shopping cart is one of them. We finally moved to a customized version of OSCommerce, an open source cart, which proved to be more powerful and flexible.”
  
 

On hosting issues.



“We have been with Yahoo! since day one. We found that Yahoo! is a good hosting service but was not the best shopping cart and ecommerce platform for us. So we built a custom cart, based on an open source product, and we host it at Yahoo!. This works fine.”


On employee-related mistakes.

“I had this idea that if I could get a bunch of my buddies, pay them a couple of hundred dollars a month, give them beer and allow them to watch TV at the office, they would do a good job. Boy was I wrong. I just ended up with a huge phone bill, customer service issues and a few fistfights. The office became one big hangout. Get the right people for the job and pay them a decent salary. You will thank yourself.”
  


On marketing suggestions.


“Do not get caught up in the pay-per-click game. Do not try to be everywhere the big guys are. They have big pockets and you don’t, at least not yet. Find one or two methods that work and let organic growth set in. When the time comes for a more flashy marketing campaign you will know. We got burned in the beginning by Google AdWords.”
  
 

On search engine optimization.


“The thing about SEO is that if you know what it is, then you are halfway there. We paid a local firm thousands of dollars to make our site more search engine friendly. Turns out if we had taken the time and with a little effort we could have done the same without a thousand dollar introduction. I would suggest using Google Base. Your products will show up in searches more.”  
 


On expense control.

 
“In the beginning we hired a call center as a way to save on costs. Then we hired a whole bunch of tech support guys, which ended up costing us more money than we were making. Here is the best way: Get the order right and ship it out on time. There will be no need for the customers to tie-up your phone lines and there will be no need to hire a staff and the existing ones can focus on other things. Get it right the first time.”
  
 

On shipping suggestions.
  


“As a way to save money, in the beginning, we were shipping products uninsured with no added protection. We had a few damaged items in mid-summer of 2006. These were very expensive products and ended up costing us dearly. We now insure our shipments. We use FedEx ground for roughly 75 percent of all shipments, and ship from distribution centers and fulfillment centers that are close to our major suppliers.”
  


On order management and back-end automation.

 
“We have in the past built our back-end systems on bits and pieces of software. This was too complicated. Try to keep your back-end as simple as possible. Consider an all-in one back-end solution. If it talks to your accounting software, even better.”
  


On accounting software.

“We have been with QuickBooks since day one. Get accounting software that works with most of your other systems, such as your shopping cart and order management software. QuickBooks is perfect for us.”
  


On credit card software.

 
“We used to be with a small credit card gateway company, which ended up suspending our account during the busiest time of the year over a few hundred dollars. Go with bigger, well established players like Authorize.Net.”
   


On general business attitude. 


“I am very passionate about what I do at Priceshoppe.com. I enjoy every second of it.”
  
  








Practical Ecommerce

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Comments ( 10 )

  1. Legacy User January 31, 2008 Reply

    I also made many of the same mistakes. But I feel my biggest mistake was the golf marketing firm that I hired.

    There thought process was to first get your name out to the industry professionals. After that, submit advertisements to golf related magazines and rent addresses for emails.

    Not once did they recommend a marketing strategy. I wanted them to publish a monthly special with a theme for the month. But I wound up writing the advertisement myself with a few tweaks from the office staff.

    After $12,000 and almost out of money, I've been doing all the work myself. I envy the fact that you had enough money to correct your mistakes and move on.

    — *Judi Campbell, LittleChippers*

  2. Legacy User January 31, 2008 Reply

    Valuable information! I hadn't heard about Google Base before. Was thinking of paying a SEO company, since everyone says that's what works. I didn't really want to get caught up in the pay per click game either, since in my mind it's a marketing company telling you you need marketing.

    — *FarVision Networks*

  3. Legacy User February 2, 2008 Reply

    This is an interesting article and very well written. Lessons learned are such a key element in the business world and life itself. If we could all learn from one another's mistakes we could all get ahead much faster with much less resistance. Coodos Frank Dappah. Your advice is applicable and sincere. Thank You and much success on your endevours. God Speed!

    — *S. Nelson of Inspiration Inc*

  4. Legacy User February 2, 2008 Reply

    Simple and straight to the point! Can't forget insightful.

    — *Hopeful Jones*

  5. Legacy User February 4, 2008 Reply

    If you do SEO yourself you are still going to pay. You might even pay three times. Here's how:
    1.) Going to SEO conferences, buying SEO books, surfing SEO forums costs time and money.
    2.) If you implement what you learned and the engines penalize you it costs you business.
    3.) Hiring an SEO/SEM vendor to clean up your mis-steps can cost you money and time as well.

    Which ever way you go it takes time and money. A good SEO firm can save you time but, they can also get you on the path to good ranking quicker. The fact that Frank Dappa learned from his SEO is fantastic.

    There are no short cuts to good SE ranking.

    — *Rob Ainbinder*

  6. Legacy User February 4, 2008 Reply

    I agree with the previous comments. Frank seems to be sincere and very open about what did not work and how to move on to what does. Allowing yourself to be totally honest will position you to be blessed by others in the future. Keep up the good work Frank!

    — *Katrice Thompkins*

  7. Legacy User February 25, 2008 Reply

    Sorry but gross revenue $1.8 million for a company still talking about valentines day and new year with 5.256.780 alexa ranking on its site didnt seemed realistic. this alexa ranking means approximately not much more than 5-10 people uniquely comes. am i missing something?

    — *sadegazoz*

  8. Legacy User March 7, 2008 Reply

    I agree with Sadegazoz. Not to diss what priceshoppe has going but a) i wouldn't recommend OSCommerce on anyone, B) quickbooks isn't going to help manage 75,000 skus. As for SEO, i just checked and priceshoppe isn't even a root domain and resellerratings has them at 2 negative reviews over 6 months. At 1.7 million they should be closer to 2-3k reviews. Figure a 50.00 average ticket price and 36,000 purchases and a 5-10% review rate (which is normal for me) and you should be at 2-3k reviews in the major review sites – especially if you take Google Checkout.

    — *Byron Miller*

  9. Legacy User March 19, 2008 Reply

    http://WWW.PRICESHOPPE.COM: THE WORST CUSTOMER SERVICE EVER

    I paid for a Sunbeam 1 x 2lb Delay Bake Breadmaker from http://www.priceshoppe.com on Feb 1, 2008 but have not yet received the item. I have sent 3 emails to orders@priceshoppe.com on Feb 12, Feb 16, and Feb 28 asking about the status of my shipment. I have received no replies from any of those emails. I have tried to contact a priceshoppe.com service representative multiple times through their live chat help function, but there is never anyone available. When I log in to my priceshoppe.com account, the order continues to say "pending". I filed a complaint to Paypal regarding my non-receipt of merchandise, asking priceshoppe.com to resolve the issue in the following manner: 1) Inform me of the status of my shipment – why is it still pending, and when I can expect to receive my product. OR 2) Refund my payment in full. Pricehoppe.com didn't even respond to the complaint. The claim was awarded in my favour of course, but I still have not received my money back or a response from priceshoppe.com.

    I WILL NEVER BUY ANYTHING FROM http://WWW.PRICESHOPPE.COM AGAIN AND WOULDN'T RECOMMEND IT TO ANYONE.

    — *Lost Customer*

  10. Legacy User March 25, 2008 Reply

    This company – Priceshoppe.com – is fraudulent. I ordered from them and never received the merchandise. I called them many times and they kept saying it would be shipped. I paid through Paypal. Big mistake. This company has no money at Paypal and thus I can get nothing back. NEVER AGAIN! BEWARE!

    — *Lorraine Dundon*