By Paul Lang, Editor, Sell It!
October 3rd, 1998

See Also   Terrence Sherry and 1 World Sarongs   Andrew Bridgeman and eART-originals   Mark Annett and Scruplestore.com   David Sabot and Cheaphumidors.com   William Waite and Nemmelgeb Murr   Mary Lu Wason and LampLink   Michael Campbell and Cellwest   Bob Rankin and Flowers Fast   Louis Jay and Health4Her.com   Jeff Swearingen and TheGift.com   Bill Broadbent the T-Shirt King   Jim Goodbody and PlanetLearn   Todd Mogren and coastaltool.com   John D. Einhorn and CapShack.com   Beverley Wood and the Gift Ship   Sgt. David Hack and US Wings   Brenda Do and MindFood Media.com   Rory O'Connor and Shopirish.com

I frequently receive e-mails from wannabe Web merchants who are desperately keen to set up their own Web store, but simply have no idea what they are going to sell in it. Many of these e-mails make the assumption that all the major market segments have been sown up by the Amazon.coms and CDNow's of the world and that there is simply no room left for the small merchant.

However, I believe that there is still enormous scope left for the small Web store to be successful. Their tighter cost structure enables them to tackle narrow market segments that their larger competitors simply couldn't afford to address. Furthermore, they are able to learn from the mistakes and successes of the "big boys" and imitate them in their own stores as appropriate.

This is exactly what the father-and-son team of John G. and John D. Einhorn has done in their store, CapShack.com. They've chosen a very narrow niche – leather sports caps – but just like Amazon.com they have adopted a third party order fulfillment model.

How did they do it? John D. Einhorn explains.

Lang: What inspired you to open a Web store?

Einhorn: I've always had a dream of owning my own business and to create something self-perpetuating, i.e., invest a significant effort and then let it generate ongoing income. My father and I envisioned a time that we could work together once he retired. The exploding growth of the Internet offered such a tremendous business opportunity, it was time to get into the game before it was too late.

It wasn't until I read an article in PC Computing Magazine that I decided I could start an online retail store, without maintaining any inventory, which was one of my key goals.

Lang: Why did you choose leather caps?

Einhorn: The product had to be unique, high quality, inexpensive and something I would buy myself. Being an avid sports fan, I investigated licensed sportswear. After exhaustive product research, I finally decided on licensed leather sports caps. Ours are beautifully designed, well made, have that trademark leather aroma and are not easily found in many brick and mortar sporting goods stores.

Yes, we knew we were not alone in this market, so we asked ourselves, 'why should customers come to CapShack.com?' We decided there ought to be three basic reasons they would come: ours was a BETTER product, they could Get It CHEAPER, and Have It FASTER at CapShack. This is why our logo says BETTER, CHEAPER, FASTER and is the underlying premise that drives all we do.

Lang: Tell me about some of the technology behind CapShack

Einhorn: We started out looking at the Viaweb (now Yahoo! Store) solution. But with over 100 products, we were already in the $300/month category. Even though Viaweb offered ease of use, their design tools are proprietary and had limited design and layout features. We didn't want to look like other Viaweb stores. I was also concerned about being locked into Viaweb's hosting offerings; I couldn't move our site to a different hosting company.

After looking at several others, iCat and ShopSite, we chose Mercantec's SoftCart. Their system was HTML template based and very flexible, but you must have a fairly good understanding of HTML. Their StateTrak order processing doesn't rely on Cookies or IP-addressing to track orders; it uses a unique random code to track orders. Mercantec offered a very cost-effective hosting bundle plan with several large hosting companies.

As far as hosting is concerned, we wanted a partner that wasn't bogged down with providing dial-up Internet access accounts. They had to have quick servers, redundant T3 access lines from different providers and a SoftCart pay-as-you-go plan. We chose Highway Technologies of Boca Raton, FL. Great rates and quick response times are backed up by an excellent technical support staff. We are very pleased with Highway's performance; we made the right choice.

Lang: Did you have any major obstacles to overcome?

Einhorn: Our only major problem was getting Mercantec's SoftCart integrated with our credit card authorization services from Octagon Technology Group. This caused at least a two month delay in getting the store online, missing the 1997 Holiday Shopping Season. But it was worth the wait, the two systems now provide the real time services we need, and order processing is automated from receipt to shipment.

We're pleased with the fast online credit card authorization capability and the confidence our customers have displayed in us as evidenced by over 90% of them buying online.

Lang: And did you have to break the bank to pay for it all?

Einhorn: We spent $8,000 out of pocket to get the company started and build the store. Add to that, the countless hours of research, planning, photographing/editing, designing the "look and feel", and building our web store, it's obvious that the costs would be significantly higher without in-house expertise. The whole key to the start of this business was my knowledge of computers, the Web, HTML and programming. Would we have done it if we had to contract these services, probably not.

Lang: Finally, what tips do you have for wannabe Web merchants?

Einhorn:

• Research all the available storefront software programs and choose the one that best fits your needs today and in the future. Make sure it can grow with you. Aside from all the claims, I think it would be very difficult to move from one storefront software program to another, especially once your payment systems are in place.

• Make your site attractive and easy to navigate. But make sure it loads quickly by only using graphic images when necessary. You usually get one chance to make a good impression on a first time visitor, you may not get a second. Your site must catch the impulse buyer the first time. Accept credit card transactions online in a secure environment, would you shop an online store that wasn't secure? Of course not.

• Treat your customers exactly the way you expect to be treated. Email messages and feedback replies are golden opportunities; they took the time to contact you. Reply quickly and honestly, even if you have to send them to a competitor's Web site. Keep your word, be patient, and make sure you're in it for the long haul.