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Local retailers grow their sales base with the help of e-commerce

Posted Dec. 31, 2007
Providence Business News—Technology Monthly
By David Ortiz, PBN Staff Writer

Business has been hopping in recent weeks at Garrison Confections, a gourmet chocolate shop on Providence's East Side. Customers have filled the storefront on Hope Street, but Garrison also received a crush of holiday orders from all over the country via its Web site.

The company's online shopping portal generates about 35 percent of total sales – a percentage roughly equal to the amount of business that Garrison does in its store on Hope Street, said Tina Wright, the business's co-owner and the wife of Andrew Shotts, a nationally lauded confectioner who brought the company to Providence in 2001. The rest of the company's revenue is generated by its substantial wholesale business, she said.

Garrison is among an increasing number of small and medium-sized businesses using the Internet to extend the reach of their products and services, said Adam Harvey, principal and technical director of GLAD WORKS, a marketing and advertising agency in Pawtucket.

“They’ve got foot traffic and retail, but now they’re looking for that opportunity to expand their sites worldwide,” Harvey said.

Businesses wanting to establish an Internet shopping portal can enter the market at $5,000 to $10,000 for a simple e-commerce platform like Yahoo! Store, Harvey said. At the high end of the market, e-commerce solutions can cost almost $1 million, and feature comprehensive back-end systems for processing credit-card payments and handling shipping and inventory, he said.

Many e-commerce solutions available at prices affordable to small businesses feature content-management systems that enable business owners to add and customize features on their online shopping portals. In many cases, e-commerce platforms are expandable, enabling small businesses to get their feet wet with a simple online presence and add features as needed, Harvey said.

Companies that ship goods or do a traditional mail-order business already have call centers and warehouses and personnel needed to run a thriving e-commerce business, said Michele Adamo, Glad Works’ marketing director.

But traditional Main Street retailers that do their entire business out of a brick-and-mortar location need to prepare to do business with customers across the globe before launching an online shopping portal, she said.

“For some smaller companies it’s kind of a leap of faith,” Adamo said. “You know, 'Do we have what we need to satisfy the potential clients that we'll have?' That is, I think, always an inherent risk in the process.”

But it’s a nice problem to have, said Paul Perkowski, owner of Central Paper Co. Inc., a paper-distribution business in Pawtucket that has generated strong sales through its e-commerce Web site, which it established last November.

The company, founded in 1948, did business in Rhode Island and Massachusetts for decades, selling directly through print shops. Today, Central Paper receives an average 1,200 orders a month through its Web site from customers all over the country, Perkowski said.

Sales generated through Central Paper's online shopping portal will account for 5 percent of the company's total revenue early next year, and could eclipse the 10 percent of total revenue that the company generates through its retail store on Glenwood Avenue in Pawtucket by 2009, he said.

Perkowski attributes much of the success of his company's e-commerce strategy to aggressive work to increase the visibility of its Web site on the Internet.

“We work on it all the time,” he said. “I don’t know how successful we'd be without it. I don’t think we would be.”

Harvey recommends that all businesses seek ways to drive business to their online shopping portals, using such tactics as blogging, podcasting, pay-per-click marketing and direct e-mail campaigns.

Whether doing business on Main Street or in cyberspace, Perkowski believes businesses will always win customers by offering quality products and top-shelf service at competitive prices.

“You've got to have good Web people, you’ve got to have a good product, you've got to have a good price,” Perkowski said. “I don’t think you can just throw anything online and be successful with it.”

But the Internet offers small-business owners the opportunity to reach a lot of potential customers, he said.