By Paul Lang, Editor, Sell It!
April 10th, 1999

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

With annual revenues in the neighbourhood of $8 billion, the US gift market is not surprisingly a tempting opportunity for many Web entrepreneurs. Take for example Jeff Swearingen. Although he only opened his Web store, TheGift.com back in March '98, he is already looking forward to achieving revenues of $1 million dollars this year.

Like many people contemplating selling on the Web, Jeff had no retail or Internet experience and has had to learn as he went along. In this interview Jeff gives us some valuable insights into how he has built his successful online business.

Lang: Why did you decide to open a Web store?

Swearingen: I hate to shop and have fallen in love with the convenience of the Internet. More and more, I see people using the net to solve their problems. Those of us who use the net on a daily basis continue to find that there are solutions to problems ranging from finding directions to a restaurant to making a stock trade to getting form 1284328HGJFUY&&# from the Internal Revenue Service without going to a government office.

For me, buying gifts has always been problematic. I never know what to get for someone, and then gift wrapping and putting something in a box and mailing it is really a pain. We're not the cure for cancer, but we're an example of a company that's trying to make life easier for our customers.

Lang: What were your goals when you opened your store? Have you achieved them?

Swearingen: There is so much hype about the Internet these days. People always ask when we're going public or how many millions of hits we're receiving. Since I'm quite certain that the shine will wear off of the Web, our goal remains to provide great products and services at reasonable prices for our customers.

The companies that have all sizzle and no steak will find themselves struggling when the infatuation with the Web wears off.

Lang: What server and shopping cart software are you using and why?

Swearingen: We do some strange things, like our on-line gift registry and dynamic affiliate program and there just isn't anything on the shelf that could do everything that we needed.

We use the entire Microsoft suite for our applications: NT, SQL Server, IIS, Active Server Pages, Visual Interdev, etc. Since we have some unique functions, we have developed our own shopping and administration platform. Our only off the shelf application is Cybercash for credit card processing.

Lang: How much did the store cost to build? How much to maintain and promote? Swearingen: We've spent about $500,000 in development. Our maintenance cost is primarily our development staff of 2 full time and some contract programmers. Our servers are in Baltimore and only cost in the $500 - $1,000 / month range. We only spend about $5,000 / month in advertising right now. Instead of spending all of our funds on advertising, we've spent to develop technology to enable affiliates and strategic partners. With competition increasing in the on-line market, we're seeing more and more opportunities to promote on-line without millions of dollars.

Lang: What were the major problems/challenges you faced?

Swearingen: Wow, where to start... one of the major problems is that this world is so new, there are not many success models to look at. Everyone knows AOL and Amazon because they've spent so much money to make themselves known. I used to wonder how AOL stayed in business when I collected several hundred of those omnipresent AOL diskettes in 1995 and 1996. I think their average acquisition cost was over $100 / customer. We just don't have the funds to play like that. So, we're looking for unique ways to acquire customers without unleashing the bank vault.

Other than that, there's competition, evolving technology, Internet Explorer 3.0, a fledgling market and trying to spend more than a few minutes a day with my daughter.

Lang: Looking at your store now, what aspects are you especially pleased with and what do you feel could have been done better?

Swearingen: I'm very pleased with our site overall. I think we could do a better job explaining what we do and why someone would want to shop with us.

We're about to release our third major revision to the site. We also just hired a former JCPenney executive to help with our product selection and presentation. Our company is filled with great minds in business, technology and marketing, but none of us have ever worked a job in retail. When we interviewed her, we couldn't answer any of her questions about our merchandising strategy, so we hired her.

Our next release will also enable a customer to ship different items to different addresses, using different shipping methods, different gift cards and different gift wrap on each item.