ETD: 677 Selling value; Credit card ship to; Photo Shops Find
the Bright Side of Digital Technology; Software revisited; Can WebEx
Meet Growth Expectations?
E-Tailer's Digest
etd_post@gapent.com
Tue, 15 Apr 2003 06:45:49 -0400
E-Tailer's Digest --- Everything for the Retailer
Issue #0677 April 15, 2003
George Matyjewicz, Moderator mailto:georgem@gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Selling value
[3] Credit card ship to
----- ---- --- -- -> Important Offer <- -- --- ---- ---- --
[4] Photo Shops Find the Bright Side of Digital Technology
[5] Software revisited
[6] Can WebEx Meet Growth Expectations?
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[1] Greetings.
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Hi All:
Today is tax day in the US - you need to either file your personal income
taxes for 2002 or file an extension. So, none of our CPAs will be reading
this or responding ;-).
I read an interesting article on retailing in Europe. There are a lot of
restrictions in individual countries, even though the Euro is in
place. Let's get a dialogue going. What is retailing like in your country?
It's interesting to note how technology has actually changed the photo
industry for the better, so reports Jan Owens. Consumers are getting
digital photos processed, rather than do-it-yourself. Now if only credit
cards can get up-to-date with their processing.
Interesting to note we had a post on web conferencing on Thursday and
Forbes had an article on WebEx. Interesting stuff. If you haven't tried
web conferencing you should.
Now, let's get to everything for the retailer.
Sincerely
Dr. George Matyjewicz
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem@gapent.com
http://www.etailersdigest.com
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[2] Selling value
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Our moderator asked...
>You are a small, two-person shop, who just set up a business
> to sell Web design services. How do you establish your fees
> and how do you attract business?
That's where we are right now George. I'll bite. How should we charge and
how do we attract business?
Josh Abrahms
+++ [Moderator's Comments] +++
Charging is a science. The first thing you need to do is determine how
much money you need to earn each year. Let's assume $50,000 for easy
calculation. Then you divide that amount by 100 days to give you a daily
billing rate of $500.
What's the science in that? Why 100? There are 365 days in a year. Let's
calculate. There are 52 weeks in a year, at 5 days a week yields 260 days.
And there are roughly 10 holidays, which means there are 250 potential work
days. That doesn't mean you will be fully employed for 250 days. You need
to generate business and handle administration issues. So, by calculating
your rates at 100 days, you account for all the contingencies. And if you
are lucky enough to work more than 100 days, you make money! BTW, most
professional firms use these guidelines.
Advertising and marketing is a topic in itself, so I won't go there
now. Let's assume you were referred to a prospect, and now you need to
convince the prospect to do business with you. Forget the thought that
you're new and you have to give away the job to get the client. That
doesn't work. And forget the idea that you need to charge lower fees to
attract that customer (low fees imply cheap jobs - and you won't attract a
better class of client).
For a small business to attract business you need one thing -
CONFIDENCE! Confidence in yourself that you can do the job and confidence
that you can convince the prospect that you are the right person for the
job. Line up resources to assist you in the project. Partner with others
who have the expertise you may lack. Put together a great backgrounder
touting your expertise citing some projects that you may have done for the
prior company where you worked. And prepare a killer proposal that
defines what you heard the client needs, who you are, what you can do, how
it benefits the client and what it will cost.
Present the proposal in person, and watch his eyes. They tell a lot. And
whatever you do, when he discusses fees, don't offer to discount. Instead,
present your benefits again, and tell him how you solution solves his problems.
Good luck
George
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[3] Credit card ship to
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John Schag wrote...
> Some companies stated that they would do that if I contacted
> my credit card company and added an alternate address.
Amex requires this. Some vendors actually pay attention to that
requirement, some don't<g>. I don't know if other cards require this or not.
All our mail (i.e.: credit card bills) come to our USPS PO Box. 99% of our
purchases are shipped to our office address, which does not receive USPS
service, so I've had to add our office address as a valid shipping address
to our credit card accounts. Several sites actually ask that you do this
during the purchase process.
Mark Riffey
Granite Bear Development
POS / business management software for the professional photography studio
http://www.granitebear.com
+++ Next Post +++
Our moderator wrote...
> I don't see this any different than mail
> order. I order something from a catalog and want to ship it to a
> family member in another state.
We advise our clients to not ship to addresses that are different from the
credit card address for one reason - the heightened risk for fraud.
An item shipped to an address different than that related to the CC creates
a situation that almost begs the unscrupulous customer to claim that they
did not purchase the item, that it did not arrive, and then they charge it
back.
An item shipped to the CC address - ADULT SIGNATURE REQUIRED - prevents a
huge amount of customer CC chargeback abuse.
The only way we suggest our clients ship to a different address is if the
cardholder is willing to sign and FAX back a short release stating that it
is OK to do so The FAX should include the order#,`item description, price,
date, CC holder name, etc. This simple`release must be signed and dated by
the CC holder. This document is filed with the order.
If you are selling inexpensive items the risk is lessened, but high-ticket
items are at great risk.
Gary K. Foote
Webbers Communications
http://wwww.webbers.com
gkfoote@webbers.com
+++ [Moderator's Comments] +++
I agree with that philosophy if I am buying for the first time. In the
case of Orbitz, I'm a regular customer. They have all the information they
need on me, and I book a lot of business with them (152,000 miles the past
9 months).
It seems to me there has to be a better way. Obviously, the credit card,
which was designed for a face-to-face meeting of the parties has outlived
it's usefulness.
George
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[4] Photo Shops Find the Bright Side of Digital Technology
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An interesting article re: adapting retailing to shifts in technologies,
consumer behavior, etc:
"Photo Shops Find the Bright Side of Digital Technology," by Claudia H.
Deutsch, NY Times, 4/14/03, C4.
The article describes how photo shops thought they were doomed with the
advent of digital technology -- consumers would stop buying film, develop
their own photos, just send photos online to their friends and family, etc.
While many digital photos are, indeed, never printed, a significant number
who want prints have found the home-print process too difficult, tedious,
or expensive (the printing and paper often cost 2-3x what a photo shop
charges per print, and from experience, the printing is VERY
LOOOONG.) While the shift to digital has not been easy for this industry,
a few photo shops have learned to take advantage of some opportunities that
have emerged.
Photo shop owners are delighted that so many women have taken to digital
photography -- women tend to want many more prints than men to send to
family and friends, and have as keepsakes. Given busy lives, digital print
processing services are appreciated.
While photo print shops have been hurt by a decrease in film sales, the
more adaptable have found other product niches related to digital
photography. Digital developing labs have parlayed the photo file to
offering related products, e.g. CD's and products with the photos on them,
e.g. calendars, mugs, T-shirts, etc. and etc. Some will also
electronically deliver them to various addresses after they have been
enhanced, i.e. improve on skills of the initial photographer.
The downside of this product diversification and enlightenment: Wal-mart,
Kodak, and online developers are also in on the act. As with much
digitally-based commerce, the field of competition has widened.
There are a few bar charts describing the growth of digital printing and
related services (the graphics don't always come out in the online NY Times:)
Comparing 2000 to 2002,
The number of digital prints ordered online, then picked up at a local
retailer grew from essentially 0 to 30 million;
The number of digital prints processed at kiosks located in retailers
increased from approx. 2 million to 36 million;
All other digital prints processed at a retailer (includes walk-in
customers) increased from 6 million to 60 million.
(I'm trying to estimate from the graphs -- the actual figures were not cited.)
Regards,
Jan Owens
owens@uwp.edu
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[5] Software revisited
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Our moderator wrote...
> I know we have a number of software folks on ETD. What are
> you finding? Are businesses looking differently at software
> purchases?
We've always has a tiered product line and about 18 months ago went from
selling 3 products for 1 industry (stupid, but acquisition of all 3 was
simply how we grew) to selling 1 product with multiple
tiers/prices/options. The upside is that upsell is easier since there is no
PITA to the upgrade. We simply issue a new set of registration info vs. the
alternative which is usually conversions, retraining, etc. Best of all, we
have 1 source tree to enhance, maintain and support vs 3, though we still
provide support the other 2 for those who chose to stay on those programs.
We haven't seen much of a change in buying tactics, but our clientele is
mostly SOHO type businesses. A studio doing 2MM in annual sales is a big
studio, for example.
FWIW, 2002 was our best year ever.
Mark Riffey
Granite Bear Development
POS / business management software for the professional photography studio
http://www.granitebear.com
+++ [Moderator's Comments] +++
Thanks for sharing Mark.
I was talking to an owner of a large public warehouse (1 million square
feet) and I said I measured the economy by how software sales increased to
businesses. He said his measurement was how many cartons were being sold,
which indicated manufacturers were getting ready to ship a lot of goods.
In any event, for the past six months or so, I am seeing software sales
picking up. Businesses are upgrading. That's a great sign. Let's hope it
stays that way.
How about some of our other software houses. How's business?
George
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[6] Can WebEx Meet Growth Expectations?
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Last week I mentioned WebEx web conferencing tool. Well, Forbes magazine
says some great things about them...
WebEx Communications, the leader in Web-based conferencing, is the fastest
growing company in all of techdom--at least by our analysis that screened
out tiny and inconsistent companies and firms with big problems. San Jose,
Calif.-based WebEx has generated 186% annualized sales growth over the past
five years.
Customers use WebEx conferencing to design products.
Until Microsoft reveals its product and distribution plans for its
conferencing product--expected by the end of the year--WebEx shares will
remain under pressure, analysts say. Still, when one considers how many
young software companies have gone out of business or never turned a
profit, WebEx stands out as a success story.
Founded in 1996, WebEx hosts interactive meetings on its Internet network,
where users can share and edit documents in real time. The biggest piece of
WebEx's business is called Interactive Services, which encompasses the
meeting center, training center and support center. All can be co-branded
and customized for a corporate Web site or portal. WebEx sells its products
as a subscription-based service.
Wall Street likes the subscription model because it provides a recurring
revenue stream. Pacific Crest Securities analyst Steve Lidberg says WebEx
has 7,200 corporate customers including, ironically, Microsoft. That
represents a 20% penetration of the 500 largest companies in the U.S. Sales
to large corporations should accelerate this year, due to the new
"strategic accounts" sales force WebEx hired last year.
The main pitch for video conferencing has always been that it's much more
convenient and cheaper than flying to a meeting or conference. The
conventional wisdom is that use of video conferencing will explode in tough
economic times, when companies are looking to cut costs anywhere they can.
And at a time when people are reluctant to fly because of concerns about
terrorism or lethal viruses, video conferencing seems like a killer
application.
But here's the thing: Despite its success--WebEx earned healthy profits of
$12 million in 2002 after several years of losses--it still has revenue of
only $140 million in an industry that is expected to hit only $315 million
this year.
Of course, Microsoft is the unavoidable caveat in WebEx's growth story.
Details at...
http://www.forbes.com/2003/04/08/cx_ld_0408webex.html
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