We are a retailer of Radio Flyer's wagons. In 1998, Radio Flyer had some experience with larger names that had Internet presence. One of the big ones was QVC.com but they really weren't moving the inventory that much. They were probably doing maybe 100 or 200 orders a month. We ended up doing over 1,000 orders in the first two months.

 We took some drastic moves into getting ourselves well positioned on the search engines. We were just well positioned on Yahoo and on some other sites, and from that we got the traffic. It was a guess as to how many people were actually looking for Radio Flyer out there.

We also knew that we have the advantage because we have a wide product line whereas most online stores only carry two or three of their products because they're so large. We're filling a niche and answering the problem that there was no selection since most stores carry only 2-3% of that selection.

The main part of our strategy is that every decision, especially the marketing decisions, has to make fiscal sense upfront. We do not spend any money on speculation.

I know that I need a certain return from any type of marketing investment I make. I consider it a loan to our investment, and that if we lose money, it's never going to be a couple of hundred dollars to maybe a thousand dollars. So when somebody comes in and says, "We're going to give you a million impressions," and then they tell you the cost per thousand. I always ask for the rate of return. If they tell me that a good return on that is x, I'll always double the x and then run the calculations to what my gross profit is. When I double their best projections -- that is the only time it will make fiscal sense to me.

Our marketing has to make fiscal sense. So I sit with a calculator and say its going to costs us this much to do it, this is the industry standard return, and this is my profit margin, so ok it doesn't make sense.

We do PR stuff, but we don't hire a PR firm because we never thought there would be a direct return on investment.

We do not do banner, but we do email to our existing customers. We feel we have a very good relationship with them because of the good service we've given them.

We don't use search engine submission services: we do it ourselves. We've looked into some of those services, but then again it's the calculation. If it's $50 for incredible submission, we'll give it a shot. If it's a thousand dollars, we'll say thanks but no thanks. Because RedWagons.com has been around for 3 years now, we are top listed in a lot of different sites.

For the past two or three years, we just focused on building a business and getting it up and running. Now that we are established and feel that we have the strength to move on. So we're turning our focus on the direct marketing aspects of the business. We're neophytes in that area. We approaching it with the same kind of ignorance, confidence and excitement that we undertook the whole venture in the first place. We may do something on it eventually, and if we do it, we will find a low-cost way of doing it.

We're in our second stage right now. We still need to grow our customer base. We need to build the strength of our company. So many online businesses, the greatest examples are Etoys and KBKids, spent millions of dollars on advertising. They spent $50 million on advertising and got $50 million in sales, so at best they had a 1:1 ratio. So when you look at their sales and profits, there's bound to be a loss. We cannot afford a 1-to-1 basis.