Practical Ecommerce

Lessons Learned: Stacks and Stacks' Cathy McManus

“Lessons Learned” is an occasional series where we ask seasoned ecommerce merchants about their mistakes and successes. For this installment, we asked Cathy McManus, Marketing Director for Stacksandstacks.com, to share her thoughts. Stacks and Stacks was formed in 1984 and ten years ago discontinued its brick-and-mortar businesses to offer its 21,000 houseware and furniture products online. The business is based in Richmond, Calif., garners between $15 and $20 million in annual revenue and has more than 50 employees. Here we offer McManus’ experiences and suggestions.

Cathy McManus

Third party business resources

“We started using more third parties about three years ago. We use Celebros for on-site search, Certona for product recommendations, and Google Analytics. We’re very happy with our third parties here. Stacks and Stacks attempts to stay with the market and, when possible, stay ahead of it, but we started out small by building our own features. However, when we find better, more robust ways of serving these programs, we outsource. At that point, Stacks only brings in applications that improve our own programs and are affordable. In other words, we don’t just go out and buy programs when they hit the market. We wait till we need them and our sales volumes can afford them.”

Shopping cart software

“Ours is proprietary, but I think off the shelf is useful for newcomers to the Internet.”

Hosting

“We use Verio. If a firm is big enough, they should have a dedicated server to themselves. At one point when we were sharing a server we were having a lot of problems because it was getting overloaded. With any of these companies, you need a dedicated manager. You have to pay for it. If you don’t, you’re just another cog in their wheel, and you have to wait for someone from their customer service department.”

Employees

“There’s no magic number of employees. It depends on the size of your business, and it depends on what you’re doing. We use a lot of freelance copywriters who work out of their homes. That’s been fabulous. Most of our copywriters are part-time, but we have one full-time person who also writes the blog. A lot of them are college students who only wanted part time work. I would suggest looking at universities for part-time employees. They’re usually bright, eager and creative.”

Pay-per-click advertising

“We have not been happy with anyone so far. We don’t have staffing to do this and don’t want to pay a full-time employee. The ROI just isn’t there. It’s just not worth it for the clicks. Companies we ignore are those that say they can increase sales by 30 to 40 percent and charge by clicks based on traffic we are already doing. We want conversion, so cost per acquisition is pretty much how we deal.”

Search engine optimization

“We are currently using a company, WPromote, who is helping us optimize. This is not a perfect science either. We’ve only been working with them for a couple months. So far we like what they’re doing. We’re going off into other avenues with product blogs. We made a total site conversion a couple months ago and our traffic started dropping off. That’s why we hired this firm. So far the changes they’ve made have worked out.”

Expense control

“Software companies are offering complex, expensive programs that in many cases are far too sophisticated for most small to mid-sized sites. Many of these solutions require more full time employees to install and manage than companies actually have on staff. Since there is so much competition for business, ecommerce sites are buying into these programs in order not to be left behind. It seems that these sites have forgotten about the economics, the ROI concept of how these programs are going to pay for themselves.”

Accounting software

“We use Mas 500, from Sage Software.”

Order management software

“Ours is proprietary and will eventually tie into accounting.”

Shipping and order fulfillment

“Seventy-five percent of our products are drop shipped by manufacturers and 25 percent are from our warehouse.”

Analytics software

“Unless a company really knows how to utilize all of the analytics that can be reaped from the Omnitures of the world, basic Google Analytics is fine.”

Credit card payments

“We accept everything. If you’re going to start up an ecommerce company, you have to offer as many forms of payment as possible. We have so many ways for people to buy. We use all credit cards, Google Checkout, ‘Bill Me Later,’ PayPal and more. We started using eBillme two months ago, and it’s been good.”

Social media

“We’re just now getting our feet wet. We just signed up a month or two ago on Facebook. Other than that, not much.”

Blogs

“We’re expanding into other avenues with our product blogs. It’s like public relations—you build it, then you have to wait a while to see the results. We probably won’t know the effects for a couple months. Our blog is Cluttercontrolfreak.com, and we have product blogs for SEO. Our blog is doing good, socially. Blogging is definitely one of the most effective means to better SEO.”

Customer service

“We use in-house customer service and a company to handle orders after hours. We also have live chat using LIVECHAT. These online customer service programs are okay but not as effective as having an 800 number for customer service. I think this is because people don’t want to sit there and type in questions and wait for the customer service representative. It’s too slow.”

Brendan Gibbons
Brendan Gibbons
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Comment ( 1 )

  1. Massimo Arrigoni January 8, 2009 Reply

    When merchants tell their story as openly and candidly as Cathy did, it makes for some of the best articles you can read. I really enjoyed it.

    I’ve been hearing the same on pay-per-click from many others. I wonder who’s really seeing a positive ROI there, or if a lot of companies are simply justifying the lack of ROI with general "branding" (which maybe OK too if you are trying to build a brand).

    Very interesting on the effectiveness of blogging (I completely agree there too) and how they are just getting started with Facebook as a marketing venue. I believe this last topic will be the center of a lot of discussions in 2009.

    Anyway, thanks to Brendan and Cathy for the good interview.

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