Published May 19, 1999

How Much to Spend on Online Store: Investment on eCommerce

Not all virtual storefronts require a huge investment. Opening a shop on the Web can be as simple as designing your own Web page and finding a hosting service with a secure server to maintain your site. How much you invest in your virtual storefront will determine what you get out of it -- but not always. Spending lots of money does not necessarily guarantee big returns.

CGI and a secure server: the low-budget approach to a big return

You can invest slightly more by building a site using a returnable form, or cgi script, and a secure server. This allows you to safely take a credit card charge, but the cost is still pretty low.

Consider Melody Upham, who spent just $1,000 to set up Rainbow Meadow Inc. [http://www.rainbowmeadow.com/], which sells body oil and soap. A former soap maker, Upham made a cool $500,000 last year -- $250,000 from her Web site alone.

Right now her site is pretty simple -- a returnable form, using a cgi script, and a secure server. When she set it up two years ago, she designed the logo herself and wrote all the copy. Her host company provided scripting and put the site online for her. Her total cost: just $1,000, which gives her a pretty nice return on the dollar.

Now she is in the process of redesigning, in hopes of cutting down on the number of toll-free calls she gets. The redesigned site will have a database and proprietary shopping cart software, provided by her host company. She's hoping for a more sophisticated look and ease of use. The total bill will be $3,000. In return, she hopes to double what she makes off the Net.

Go off-the-shelf: the frugal merchant's way to sell online

For a little more than $1,000, merchants can buy a low-end, or off- the-shelf e-commerce package. Pussicat [http://www.pussicat.com/], a gymnasium for cats, found a home on the Web three months ago. Its startup costs for design, hosting and the use of BuildaShop software from Rocketfuel Inc. was just $1,500.

The South Carolina company, owned by Wolfgang Stoeckl, is delighted with BuildaShop because it is cheap and simple to use. Stoeckle can do his own maintenance and can add new products himself. If he hadn't used a designer, he could probably have done the whole job for under $500. BuildaShop alone is just $90 plus $1 per transaction.

Best of all, the return so far has been tremendous. In three months, the 11-year-old company has increased sales by $20,000. And Stoeckle is saving another $20,000 by reducing his use of catalogues.

Do-it-yourself with bells and whistles: not always more bang for more bucks

Don Solar is a barbecue fanatic who lives in Atlanta. Solar used a bundled package of Mercantec [http://www.mercantec.com/] Softcart with some modifications and CyberCash [http://www.cybercash.com/] to pull together a blockbuster site called Barbecue Source [http://www.bbqsource.com/]. The site offers books, recipes, equipment and food for grilling enthusiasts. Click on one product, and you'll be led to others that logically meet your needs.

Solar's been online for 18 months using this sophisticated approach, and he has gotten plenty of notice in both food and computer magazines -- but his take doesn't satisfy him. It cost him $8,000 to set up the site. He did part of the design work and all of the subsequent maintenance himself. The real costs, he discovered, were in buying the Softcart software and in paying banking fees to use Cybercash. A cheaper way to go might have been finding a host provider that already had a license for e-commerce software.

Solar goes to many barbecue and cook-off events, and that keeps business afloat. He made 500 sales using the Internet last year, representing only a small percentage of his $100,000 net. Solar fears his site may be too sophisticated for the average, non-computer-literate barbecue enthusiast; he is considering changing the look and feel.

High-end customized package: worth it only if you're set on making millions

For Frank Bernardi, the more sophisticated the application, the better for his customers. Bernardi is embarking on his first Web site; previously his business has been more conventional. But he is the kind of guy who likes to do things right, so he has devised a really sophisticated, consumer-friendly way to sell hats -- and he has employed his host to help.

Innovative Stitching [http://www.in-stitch.com/Wizard] will let you search its database of 10,000 images. You pick out the basic baseball cap you like from a series of drawings; choose its color and see the shade painted on the hat of your choice. If you don't like the angle of the brim, you can change that, watching it reshape right before your eyes. Then you put words on your cap. Choose a type font and color and add a decorative image. Once you've approved the final product, then it's time to check out.

Bernardi paid $24,000 for this site, but he is hoping that it will push his hat business well over the $3 million mark. Will it be worth the bundle he invested? Only time will tell.

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