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Making it Big on the Web: RedWagons.com
With the right product, plus lots of hard work and determination, small entrepreneurs can do big business on the Web. Tony Roeder, owner of RedWagons.com, proves that small guys can win the online game.

by Isabel M. Isidro
Managing Editor

How do you provide customer service?

We send confirmation emails when we receive the order. We again send a confirmation email when the order is shipped to give them their UPS tracking number. We want to address some of the biggest concerns of the customers, particularly questions like "Will I ever get this order? How can I get hold of someone?"

We made the decision in early 1999 to put our phone number everywhere on our web site so our customers can call us. We don't have 24/7 coverage but we have enough staff to handle the phone during office hours. We never let the phone ring 2 or 3 times. There's a voice that answers and customers are rarely put on hold. A knowledgeable staff answers questions. If there is a concern, it is quickly handled.

 

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 We are also very generous in our return policy, in giving information, in helping people along or in making a decision or to resolve a problem.

Has shipping costs deterred customers?

Probably. But we have selections and we have service.

Yes, our products are expensive to ship. But we cut our margin so we can stay competitive. If somebody go to a big toy store, and if they find that one specific item that we also sell, many times they will find it for less. With specialty stores, we are generally more competitive.

Where we blow everyone out of the water is when somebody is sending it as a gift. No one will gift wrap these wagons because they're too large. So we will gift-wrap them. We gift wrap them, put a card, and ship them anywhere in the country for the same costs, as you would have it shipped to your house. And many times, for the same costs as you would pick it up somewhere in a specialty store.

If you go to ToysRUs and get the wagon for less, and try to wrap it and ship it, first of all it would take you about three hours to do it and it would cost you the same amount of money. We have the extreme advantage when you are trying to send it as a gift.

It is a big bulky item. So when you buy it from a store, you have to get it off the shelf, bring it into your car and try to get it into your car. Imagine if you are a parent with screaming kids trying to fit this big wagon in your hatchback or your little trunk - it is hard.

There is a cost difference, but convenience wise, we can blow the competition out of the water.

How are you managing the growth of your business?

In the early part of 2000, we were experiencing triple growth over the year before. After three years of being in business, we were heading to about 24-fold growth over our first year.

At that point, I was considering whether to outsource our fulfillment or expand our business. I wasn't sure what was going to happen. I decided to outsource because I didn't know how much more we are going to grow. If the growth stalls and I expand, we would have people sit around in an empty warehouse.

So we decided to outsource our entire fulfillment in September 2000. And of course, the market started to crash. Instead of having triple growth, which we were on target until that second quarter, we slowed down to about 50 percent growth. So we ended up having a 2-fold growth instead for 2000 over 1999.

Our decision to outsource was good since we are not overextended now. We're still strong and focusing on our customer service. Our repeat customers and referral customers are coming back very strongly because of the service we've given them in the past, and that has propelled us to 60% growth this year over the last.

 

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