“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.”