Management & Finance

This Month: Adding Staff, Computers and Equipment

As any ecommerce merchant knows, there’s more to launching a successful online business than just launching a website.

Patrick Coughlin has owned and operated American Diamond Importers, an independent brick-and-mortar jewelry store in St. Clair, Mich., for almost 15 years. St. Clair is a small, idyllic community of about 6,000 people north of Detroit.

Pat Coughlin and wifeUntil recently, Coughlin has had a static, information-only website; he didn’t do any online business. When he discovered he won an eBay ProStore’s contest, he quickly began implementing the steps necessary to revolutionize his traditional business model into one that included an online business and a global audience.

Coughlin’s goal: To generate $1 million in sales from his online business within one year. It’s a significant goal, and to make that happen, he has made a sizable investment in people, equipment and advertising.

Coughlin has added six new staff members to handle the day-to-day duties of the new endeavor, including three for customer service, one for fulfillment and one product photographer. As things get rolling, he expects to need additional staff to handle the new workload.

Adding new computers

Beyond the expense of the additional payroll, Coughlin made a stop at a nearby Best Buy to purchase his team six new Hewlett-Packard computers at about $700 each. His computer technician has networked those computers with the 10 stations already in place at his brick-and-mortar store that run off a dedicated server.

“One computer is something,” said Coughlin. “But now that we’ve had to go with six brand-new ones, it starts eating away at the budget a little bit.”

One technology he’s deployed that didn’t cost any money is allowing shoppers to connect with customer service representatives when shopping online via Skype. Though the service isn’t getting much use in the early days of the site’s launch, Coughlin is confident the feature will increase in popularity.

“Hits (to the site) are starting to increase, and I thought more would be using the Skype button,” Coughlin noted. “That’s not happening yet. As time goes on and as Skype is used more, then we’ll start getting more people using the Skype.”

One of the challenges in the online jewelry business is being able to see the product your buying. Coughlin envisions Skype’s video capabilities helping the shopper “experience” the jewelry, much like would happen inside his store.

“Skype is a great tool, especially for us,” he said. “We can go face-to-face with someone and actually have a product, ring or bracelet. Although it’s not the greatest image, we can actually show the product with the webcam.”

In addition to a customer seeing products, Coughlin feels the visual, real-time link between customer and business creates an important relationship during the buying process.

“It’s the person-to-person interaction; yes, we’re a real company with real people,” he said, noting being able to make that visual connection tells customers “we’re here to help you. If you have a problem, we’re here to answer your question in the store, through Skype or through email.”

Since customers need to see a terrific image of a piece of jewelry, Coughlin has invested in a highend lightbox for all of the custom images his photographer takes.

“Jewelry is one of the hardest things to take photos of, mostly because of the reflection of the metal when shooting the image,” he said.

In order to shoot jewelry, you need a lightbox or some material that defuses the light. Coughlin said anyone can purchase a lightbox or defusing kit for as little as $50-$200.

State-of-the-art photography

Knowing the importance of product images, he opted for the state-of-the-art “The Box II” from MK Digital Direct. This $3,200 piece of equipment is a 2’x3’ box equipped with special lighting so there is no harsh lighting, on the products. Certain lights can be turned off in the box to create more dramatic lighting, and “The Box II” comes equipped with special halogen lights on a gooseneck arm that help add special lighting effects to the diamonds. Consumers want to see their diamonds sparkle.

Coughlin said they’ve also invested in a six megapixel Cannon Powershot S3 IS Camera to ensure quality images.
With six new staff members and the equipment needed to operate the business, there’s more money going out in this new endeavor than there is coming in. But Coughlin remains focused on his goal to diversify his business and generate $1 million in online sales within the first 12 months.

“Internet sales are a must to survive and grow,” he said.

PEC Staff

PEC Staff

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