E-Commerce Times Talkback

Re: An E-Tail Time Warp?
Posted by: ECT News 2001-07-03 14:54:18

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News item: A startup-up Internet pure-play retailer announces it is giving away 10 bucks
to every customer who shops at its site. A story from mid-1999? Guess again.
This item is from a week ago. Right in the middle of 2001.

So is the purveyor of this promotion some kind of e-commerce Rip Van Winkle, just kicking
off the sheets after a nap of several years? Or is this a coolly calculated gamble likely
to pay dividends down the road?

Re: An E-Tail Time Warp?
Posted by: B. Ducey 2001-07-16 01:16:15 In reply to: ECT News

Thanks to Keith Regan for the press and C. Hall is right on! I'm the President of MySalesStore and I wouldn't be giving away $10 if the arithmetic didn't add up! Our average order is well over $50 and the $10 "credit" against the first order, including our revenue sharing customer acquisition costs, still allows for a profitable first sale (we have high margins)! And since the customers have to "register" to receive their $10 credit, our house-list is going through the roof! We only pay our revenue sharing partners on sales. Profitable customer acquisition combined with virtual warehousing, low overhead, customer retention, and mining the database equals a winning formula. It's all in the arithmetic!

Re: An E-Tail Time Warp?
Posted by: C. Hall 2001-07-16 16:46:09 In reply to: B. Ducey

I'm the president of RepairClinic.com.

We're always looking for ways to pump up the volume with promotions. We had several appliance giveaways, however, we had so many people sending in postcard entries (thousands) that we decided to stop the practice. We tracked sales for customers that entered a sweepstakes and found they were far less likely to order a part than the people who didn't enter the sweepstakes. It's good to increase your email list, but we're looking for ways to do it that keep out the chaff and retain the wheat.

I think your timing is great for the promotion ...as long as the press doesn't snigger at you too long for going against the flow.

In fact, your promotion is a common one at brick and mortar stores, it's just that they've been doing it right for so long and so many etailers were giving away the store (or should I say investors life savings) with no regard for the return on the promotion.

Good luck with this promotion and with whatever else you try to make your business successful.

Re: An E-Tail Time Warp?
Posted by: C. Hall 2001-07-03 16:43:46 In reply to: ECT News

This isn't rocket science. The average price for an item at mysalesstore is quite expensive. They can afford to give away the first $10, which comes in the form of a "points" credit, not cash.

Re: An E-Tail Time Warp?
Posted by: joe dilesio 2001-07-16 16:04:05 In reply to: C. Hall

The MySalesStore.com is a workable model. Acquisition costs must be part of the profitable equation for e-retail success. Catalogers have been doing it for years. This was never learned by the VCs who funded: Value America, Pets.com, Buy.com, Cyberian Outpost and too many others. They never learned the model must work before you attempt to scale the business. Direct Marketing 101.....Joe Dilesio

Re: An E-Tail Time Warp?
Posted by: B. Ducey 2001-07-16 19:39:38 In reply to: joe dilesio

Thanks Joe for the support.

My background is in direct and catalog marketing and you are so right to say "catalogers have been doing it for years"! And the sad part is that there are a ton of books and info to teach the E-Tail generation, but unfortunately, most of them just don't get it!

Thanks again,

Bob Ducey
President
MySalesStore

P.S. I'll be at the Golden State Capital Network Conference being held at the San Jose Hyatt. If any of you folks are around, stop by our exhibit booth and say hello!