Les Jones

E-commerce Companies in the Knoxville, Tennessee Metro Area

I was searching the net for presents for my best men and came across www.pipesforless.com. The name is somewhat generic, so it took a few clicks around the site before I noticed the logo and realized that it's the e-commerce presence of none other than Knoxville Cigar Company. Cool.

I'm the e-commerce manager for a Knoxville firm, so this kind of thing interests me. It also reminded me of a question I've had for a while. How many companies in Knoxville are involved in e-commerce?

Here are the ones off of the top of my head, mostly from personal contacts or reputation. I'm extending this to the metro Knoxville area, and not strictly Knoxville. So for instance, Norris-based Sunlight Gardens is on the list, even though they're in Anderson County instead of Knox. (They're also clients of mine. Ask me about the time I went from working on their FileMaker Pro database to helping one of their cows give birth.)

Adding a company to the list
Do you know of an e-commerce company in the Knoxville area that isn't on the list? Email me at blog atsign lesjones dot com. I expect the list to grow dramatically. In fact, I'd be surprised if this first version is 10% complete, but you have to start somewhere. The only criteria is that the company's web site must take orders online using credit cards (PayPal doesn't count).

How to easily find this page
To make this page easy to find, I've added it to the Best Of LesJones.com. Just click on the Best Of link from any page on the site.

Goals
I have several motives for assembling this list. One is purely academic. I want to see how extensive e-commerce has become locally. I suspect that even local government doesn't know. I also suspect that almost everyone will be surprised by the numbers. The e-commerce revolution has been extraordinarily swift.

Another reason is purely selfish. I want to assemble a list of potential clients for my consulting services. Once the wedding chaos is over, I plan on doing some outside consulting. I've been in this business for four years - which is an eternity for an industry this young - and all modesty aside I've been very successful. I also see a lot of companies repeating the same mistakes, not only in terms of web page and shopping cart design, but in marketing and search engine positioning.

A final reason is that I'd like to create an organization for e-commerce professionals in the Knoxville area. Amazingly, with all of the information on the Internet, it's hard to find useful information on e-commerce per se. Sharing information with non-competitors in your niche is almost always a smart idea in business. (And I promise that SecureHQ won't sell cigars if Knoxville Cigar Company won't sell firewall and VPN appliances.) It's also a good idea in terms of lobbying and legislation, should that be necessary, and sooner or later it will be.

On the Internet, No One Knows You're a Criminal

WIRED: Swollen Orders Show Spam's Allure. A spammer left his order logs exposed. He had 6,000 orders for $100 each. The product? Penis enlargement pills.

WIRED: A Support Group for Spammers. A spammer's community web site fails to secure their mailing list, leaving the spammer's emails exposed. Gee, that doesn't give me any ideas. These guys have great security, huh?

FAST COMPANY: Catch Me If You Can. A scammer named Jay Nelson tricked eBay and Yahoo users out of tens of thousands of dollars before being arrested and convicted. He's scheduled to be released in 2007.

What slays me about this guy is that he started this while his wife was pregnant. Is that anyone's idea of a good plan? "Baby's gonna need an education IRA. I best commence to do me some robbin'." Paternity does strange things to some guys.

Web Design Links

LYNDA WEINMAN: The web-safe color palette is dead. It's true. Those 216 colors made sense five years ago, but the log files for my work site indicate that the number of visitors using 256 color video cards is down in the single digits. They'll just have to see dithered graphics until they spend the thirty bucks to upgrade to a new video card. I can't even feel guilty about that, since photographic images are going to dither on 256 color displays. Where's the harm in letting the navigation graphics and logos dither, too?

WEB SITE OPTIMIZATION: These guys have a new version of their page loading time checker. Awesome. The book - "Speed Up Your Site" - that accompanies the site is worth it. I used it in the last re-design at work. Best advice (other than keeping CSS, HTML, and image sizes small, and reducing the number of objects on the page) - keep each external object below 1165 bytes so that it can be transferred in a single TCP/IP packet. (An object is a file included in the page, such as an image, linked CSS stylesheet, etc.)

LINK CHECKING: I tried lots of link checkers. I needed one to satisfy these criteria for work: must handle lots of pages (>5,000), must handle dynamic pages, must handle secure (https) pages, must be fast, and must not cost a lot of money. The winner: Xenu Link Sleuth. It satisfies all of my requirements, and it's freeware.

I discovered one trick in finding broken links with a dynamic, database-driven site. Say you have a page called results.cfm. The output of that file is based on the storyid called with the file. So, for instance, you might have a URL like www.domain.com/results.cfm?storyid=1234. If the storyid 1234 doesn't exist in the database, you get an error in your database middleware, but you don't get a 404 file not found error at the web server level, because the file results.cfm is present. So how can you get your link checker to report the error?

The hack I use is to find the file containing the middleware error string and include a non-existent image. I used 404.gif. Xenu tells me that a file 404.gif couldn't be found, and shows me all of the files that referenced it, complete with the bad id numbers in the URL string. Sweet.

Clay Shirky on Micropayments and Blogging

Clay Shirky has a new essay, "Fame vs Fortune: Micropayments and Free Content".

Much as I'd love for micropayments to work out, I'm betting on Shirky being right that they won't. The standard argument in favor of micropayments - as annunciated by Jakob Nielsen - is that they must happen because publishers need them, and the payments will be so small that people won't care. Nielsen writes:

Jeff Jarvis on the Rewards of Blogging

Responding to Clay Shirky's article I mentioned yesterday, Jeff Jarvis agrees with everything Shirky says, but points out a material reward of blogging. It isn't micropayments or even tip jars, but connections, reputation enhancement, and book and career deals:

In the world of weblogs, I often point to Glenn Reynolds and say that he has branded himself online in ways that he could not in the classroom or in journals, and this is sure to pay off for him not just in audience and ego but also in wealth: Because he is the famed Instapundit, he is more likely to get book deals, TV deals, and a cushy Yale teaching gig.

I keep doing this weblog for many reasons -- gratification (I like writing again), ego (I like having an audience), learning (this weblog has helped me understand how to bring weblogs to my work), community (I like you people, I really do), but also some distant bet that it may help me get a book deal or a teaching gig. Thus, it's hard to see where fame leaves off and fortune begins; the line blurs.

I tend to agree. Offering free advice on the AOL Mac forums back in the early '90s helped me to meet David Pogue and contribute chapters to one of his books. It also lead to a book deal with Sam's Publishing. Writing 56K.COM lead to magazine work. I hope to land some e-commerce consulting work with my next project.

Writing 56K also lead to one of the proudest moments of my life: getting a call from the Playboy Advisor, asking me for advice. True, the advice was about 56K modems, but I usually don't tell people that part. Downtown Julie Brown was the centerfold that month. Yee hah.

Virginia Postrel on E-commerce Pricing

Virginia Postrel has an article for the New York Times, "The Internet Book Race". (Via Bill Hobbs.)

The gist of the article is that researchers studying price and selling information at Amazon.com and BN.com showed that Amazon customers were less price sensitive:

Not surprisingly, the researchers found that higher prices mean fewer sales. But the effects are notably different at the two sites. Both sites lose customers when prices rise, but Barnes & Noble loses a lot more.

A 1 percent price increase at BN.com pushes sales down 4 percent, making price rises a bad idea. By contrast, the same increase at Amazon reduces sales by only 0.5 percent - a net revenue gain.

It's interesting, but not terribly surprising. We've all heard that you should sell on quality and service, not price. In reality, it's a lot harder than it sounds. Price-sensitive customers leave Amazon when prices go up. Others stay, in part because of quality, but in part because of laziness.

Jakob Nielsen noted years ago that his readers were far more likely to buy his books from Amazon, even when other merchants he linked to had lower prices. Buyers like Amazon for the simple reason that they already have accounts there, and already know how to use the shopping cart. Shopping carts haven't converged, and there are peculiarities that throw customers off. It's also a hassle to re-enter shipping and billing information at a new site. People who are used to Amazon keep going back because it's familiar and trustworthy.

OK, but so what? As I noted in the comments at Bill Hobbs's site:

I think the message is "It's good to be Amazon," meaning: it's good to be first, biggest, and best-known.

Part of Amazon's current position is the result of lock-in and customer loyalty. True, Amazon built that lock-in and loyalty through good service, advertising, marketing, and billions of dollars in investor money.

The question is, what now? What lesson is there? If you were starting a company to enter the music-book-video market, how would you go about unseating Amazon?

Maybe the message of the study, then, is that there isn't a good way to unseat an established dominant like Amazon, at least not on price alone. It may be possible, however, to offer a slightly lower price to attract the value market segment, but not spend those billions of dollars to pioneer the market.

The other possibility, of course, is to avoid established niches like the music-book-video market. It may be best, in other words, to locate smaller niches that haven't been taken over.

Scott McCloud Responds to Clay Shirky

Scott McCloud's Mis-Understanding Micropayments is a rebuttal to Clay Shirky's recent essay (see here and here). McCloud's main point is that the web sites that will benefit from micropayments are the ones that create unique content that can't be commodified:

Throughout this article, Shirky is talking almost exclusively about writers of news and criticism like himself. Ironically, these are the very sorts of content most likely to remain free and most likely to be treated as a commodity ("This site has movie listings for 20¢ a month and this site has movie listings for free; which one should I pick?"); and yes, of course, blogging, the ultimate vanity press, isn't switching to pay-per-view any time soon.

By ignoring music, movies, comics, radio shows, novels, software and games - the vast categories of content that are rarely interchangeable - Shirky is stacking the deck. This might have been just a forgivable oversight, but let's not forget that he's using these examples to publicly condemn a company with no such biases. Art is not a commodity and Shirky should know that.

Think about it: If you wanted Hail to the Thief and the whole album could be downloaded for $5.99, what difference does it make that there's a free album from Hootie and the Blowfish somewhere else? If you want to download Donnie Darko, who cares if someone else is giving away Dances with Wolves? If you want old Firesign Theatre recordings, why would the existence of a free Henny Youngman collection influence your decision? Comparing these decisions to "Coke versus Pepsi" denigrates the creative process.

The terms of the micropayment debate hinge on a definition: how big does a payment have to be to stop being a micropayment? If it's a dollar, then Apple's iTunes is an example of a micropayment success, because you can buy a song there for 99 cents. (Of course, Apple expects most customers to buy more than one song a month, and most customers have.) If the upper bound is a few cents, then there hasn't been a successful micropayment system yet, and it remains to be seen if the BitPass system McCould using will be the first.

Printer Stylesheets

I'm still tweaking the blog after switching from Blogger Pro to Movable Type. The latest tweak is to my print stylesheet.

My main page has a list of links on the right-hand side. Anyone printing that page probably doesn't want those links, so I decided to make the sidebar non-printing. This is a quick explanation of how to suppress printing for part of a page.

Most blogging software includes a template with a default stylesheet, either as part of the document header, or as a separate document. Part of the flexibility of Cascading Style Sheets (CSS) is that you can define different stylesheets for different output devices: screen, printer, audio reader, etc.

The first step is to include a line in the document header pointing web browsing software to the print stylesheet (the trailing slash is to make that line XHTML compliant; omit it if you're still validating to HTML 4.01 or earlier):

<link rel="stylesheet" media="print" href="/print.css" />

Next, enclose the area you don't want to print in a div tag for a new class called "noprint":

<div class="noprint">stuff you don't want to print</div>

Finally, create a file called print.css on the web server and define a noprint class:

.noprint { display : none; }

That's all you need to designate part of a page non-printing.

Because my new page design has light text on a black ground it could drain an ink cartridge in a hurry. To keep that from happening, I reversed the color scheme for the print.css file (the * matches all elements and classes):

* { color:black; background:white; }

That makes the text print correctly, but I still have some background areas that print in black. Know how to fix it? Post in comments.

Chong's Bongs Wrong?

Tommy Chong - of Cheech and Chong and That '70s Show fame - has been sentenced to 9 months in jail, a year's probation, a $20,000 fine, and forfeiture of $103,000. His crime? Selling bongs online.

Chong's Web site sold bongs and other paraphenalia over the Internet. His company and others were busted as part of Attorney General John Ashcroft's "Operation Pipe Dreams," which sounds like a good name for Cheech and Chong's next movie.

I sympathize, I really do. I think pot should be as legal as alcohol or tobacco, and there should be no laws against selling paraphenalia.

Unfortunately, there are laws against selling those things in this country. Anyone running an e-commerce business needs to be aware that they're subject to the laws of all the states they ship to, plus federal jurisdiction. The Internet isn't a badlands where the laws don't apply.

Someone once asked me about putting a football board on their web site. Not as a business, but just as a more-convenient version of the friendly board they already had with their pals. I asked them if they would put a sign in front of their store announcing they had a football board. "Of course not," they answered.

"Then don't put one online," was my response. Don't do anything on the Internet you wouldn't do in meatspace, and that includes business activities. Sure, maybe no one would care, I told this person, but if the sheriff or district attorney decided they wanted to get their names in the paper by busting someone on the Internet, all it would take was a quick Google search.

There are vast areas of untested law - online gambling and pharmacies, for instance - and an attorney general somewhere is going to make a test case out of someone's Web site. Let some other guy be the test case and not you.

House Passes Ban on Internet Taxes

The U.S. House has passed a ban on taxes unique to the Internet. Existing taxes such as sales tax could still be applied to Internet transactions. The bill, if passed by the Senate and signed by the president, would prevent any new taxes which apply exclusively to the Internet, such as Internet tariffs, email taxes, etc.

CDW Buys MicroWarehouse

Computer retailer CDW has purchased Micro Warehouse. They're the catalog giant behind PC Warehouse, Mac Warehouse, Datacomm Warehouse, and probably a few others. Despite nearly $1 billion in sales, MicroWarehouse was insolvent.

CDW was formidable competition before, with roughly $400 million in monthly sales. They're already the largest retailer of Apple products, bigger than CompUSA (with its Apple store-within-a-store) and bigger than Apple's own stores.

CDW is on track to become the Wal-Mart of catalog and online retailers in the computer category. Wal-Mart, incidentally, is the nation's leading retailer of DVDs, and is #2 in music and electronics. With volume comes the power to negotiate low prices:

CDW's increased volume and market share continues to give the company stronger pricing leverage with the major vendors, oftentimes better than what distributors and solution providers can sell for, Wolf and others said. That, coupled with CDW's strong end-user marketing and advertising capabilities, has made the company, along with Dell, one of the channel's most ubiquitous competitors, solution providers said.

"They got the cheapest price," said Bernie Franczak, manager at HPM Networks, a solution provider in San Jose, Calif. "What CDW has done is effectively driven down margins in the marketplace. If I give a customer a quote, they immediately compare that with CDW."

I'm not one of those people who rails against Wal-Mart. I like the low prices, and I like the fact that I can stop at one store to buy groceries, hardware, household products, and gardening supplies, and have my oil changed while I shop. And truth be told, I'm typing this on an Apple computer I bought from CDW.

As an online retailer, that's what worries me. My company's product line overlaps very slightly with CDW's. I've occasionally been in competition with them. (This is for quotes for large companies and government, not onesie-twosie purchases.) They're not very aggressive with online prices, but that's only because the manufacturers are reigning them in even more than they reign in e-tailers like us. With no holds-barred competition, and the deep pockets to finance large purchase orders, these guys are brutal competitors to a lot of e-tailers in the computer market.

Google as a Hacking Tool

Googler explains how to find unprotected Web directories using everyone's favorite search engine.

This has been common knowledge for the search savvy for some time, but now it's getting more press. You can easily query Google to find doors left open by webmasters. I call it "Google keychain" because it's one (search) string that has keys to many doors :)

By default the usually hidden directories have the words "name last modified size description" in the heading. Use those exact words as your Google query and watch what you find (though I suggest adding the extra search operator intitle:index to make it more focused).

Here's why this exploit works. Normally, users can enter a directory name in a URL (such as http://www.lesjones.com/images for the images directory). Notice that no file was speficied in the URL. Apache will look for a default file in that directory, such such as index.html, default.htm, or other files defined in the httpd.conf file.

If there is no default file present, Apache may display the contents of the directory, depending on the configuration settings. The default is to display files in the directory. To keep that from happening, open the httpd.conf file, disable the IndexOptions directive, and restart Apache. (Details at Apache.org.) If anyone tries to access a directory without a default file, they'll get a 403 Forbidden error, like this one.

There's an older exploit involving Web-enabled FileMaker Pro databases, though I can't seem to find the details right now. When a FileMaker Pro database is Web-enabled, it has a default welcome message. If the database isn't password-protected, search engines will index that message, and hackers can search for that message on Google and other search engines.

Lore Sjöberg on Micropayments

Regarding Clay Shirky's essay, Fame vs. Fortune: Micropayments and Free Content, Lore at Slumbering Lungfish weighs in with his opinion:

But here's the dirty little secret of the artistic Web community: We're not as popular as we like to think we are. It's fun to look at your access logs and count your visitors and compare yourself favorably to the paid circulation of The Economist. It's especially nice if you want to rail loudly at the injustice of The Economist making approximately four plabillion percent more revenue than you. But that's like playing your guitar at the corner of Telegraph and Bancroft and counting the entire population of Berkeley as your fan base.

Shirky argued that most content will stay free because artists want fame more than they want fortune. I'd take it a step further. The Web-wide reticence among independent artists to actually hunker down and charge for material is because we know that if we did so, we wouldn't get fame or fortune. We'd get, at best, beer money and a clique.

Customer Records

A New York Times article asks whether the provisions of the Patriot Act could lead to e-commerce stores retaining less information about their customers.

WebDesignPractices.com

If you design Web pages or e-commerce systems and care about usability, you need to visit WebDesignPractices.com. The site surveys popular sites to see what practices are most common, i.e., best practices.

Why do what everyone else is doing? Because it's what your customers expect, as Jakob Nielsen states in Jakob's Law of the Internet User Experience:

Users spend most of their time on other sites. This means that users prefer your site to work the same way as all the other sites they already know.

This Law is not even a future trend since it has been ruling the Web for several years. It has long been true that websites do more business the more standardized their design is. Think Yahoo and Amazon. Think "shopping cart" and the silly little icon. Think blue text links.

That's what Neilsen was saying in 2000 or even earlier. He also noted that most Web pages link the logo to the home page. Lo and behold, look at what WebDesignPractices found:

• 60% of sites have a "Home" link on each page, and link their logo to the home page.
• 50% of sites use blue as the link color.
• The Shopping Cart link was typically in the upper right corner of the page.
• 72% of sites used Cart or a variation (Shopping Cart) as the label for the link to the list of products the customer is ordering.
• 76% of sites that used a graphic to represent the shopping cart used a wheeled shopping cart.
• 32% of sites included a summary of the contents of the cart. Of those that did, 71% showed the number of items in the cart.

Fascinating stuff if you're, you know, actually trying to get people to use your site successfully in order to buy things. Some creative folks hate Nielsen and research like that done by WebDesignPractices, but results-oriented site designers should love them.

The All New Adventures of The Slug

I've been to a fair share of art museums, but the most inspirational artwork I've ever seen was at a tiny gallery in Sante Fe. It was a bad sketch of a female nude. Asking price was a paltry $180.

It really wasn't very good. It didn't even have the phony caché of being expensive. But it's one of the few pieces of art that made me want to be an artist. "Wow!" I thought. "If I could learn to draw just that well I could get a women to pose nude for me, and I could get someone else to pay me $180." (What do you mean art should serve a higher purpose? You and your old-fashioned ideals.)

I had a similar thought when I saw The All New Adventures of The Slug. Here's a guy who figured out how to enter the world of online comics with almost no discernible drawing talent. (I don't think I'd hurt his feelings by saying that, either.) Meanwhile he gets to comment on the vagaries of being an artiste, and a Web artiste at that. Here's his take on micropayments for Web comics:

I've been approached by S.Progresso on joining his micro-payment hive mind collective effort. I sort of like what he has in mind. The latest page is free, as are the archives. Instead what he plans on doing is hiring troops of russian mail order brides to break into peoples homes, steal their kidneys and charge them for dialysis.

It's very appealing, although I'm not so sure I agree with the part about making the archives openly available.

X10 Files for Chapter 11 Bankruptcy

X10 - equally famous for its surveillance cameras and popup ads - has filed for Chapter 11 bankruptcy protection. The move follows a $4.3 million judgement against the company for unlicensed use of popunder ad technology. In its filing, the company claims assets of $1 to 10 million, and liabilities of $10 to 50 million.

At one time, X10 was one of the biggest advertisers on the Internet. The advertising created a well-known brand name, but doesn't appear to have been cost-effective in driving sales.

Automate Airborne Shipping

Airborne has a new program to take the drudgery out of creating airbills. If you ship packages Airborne, your shipping clerk has to go to the Airborne web site and key in all of the customer shipping and contact data. You already have that data in electronic format in your shopping cart. If only there were a way to get your computers to talk to Airborne's computers.

Now there's a way, and it couldn't be easier. You simply create a URL with all of the customer information. Click on the URL to send the data to Airborne's Web site. Airborne's Web site will prompt you for a username and password, then pull the data out of the URL and create the airbill. If you include the customer's email address Airborne will send the customer their tracking number. Here's an example:

https://www.wwexship.com/wwxchange/External.jsp?companyName=Database Development
Design&address1=5615 NW Central Drive&suiteDept=Suite
C107&city=Houston&state=TX&zip=77092&serviceType=GND

Ideally you would replace the spaces with %20 for proper URL encoding, though it works fine without them as long as you copy and paste the URL into your browser. You can also use a POST operation if you prefer using a form.

You might want to review your privacy policy to make sure that giving the email address to Airborne is kosher. Our privacy policy covers this: "We use the information you provide about yourself when placing an order to complete that order. We do not share this information with outside parties except to the extent necessary to complete that order. That would include payment verification services (currently CyberCash), anti-fraud services used by CyberCash, and shipping services such as FedEx and UPS."

Before implementing the system, I made an inquiry to our network security officer to make sure this was a secure way to pass customer data over the Internet. The URL begins with https, meaning that this is an SSL-encrypted exchange. SSL encrypts the data, as well as the URL, so snooping is impossible. The security officer signed off on it.

It took me about 30 minutes to re-program our shopping cart to include the URL in the emails we receive when a customer places an order. Every time the shipping clerk uses the system he'll save a couple of minutes of drudgery. Even if you ship just a few Airborne packages a day the programming time is worth it.

I checked Airborne's site and found a lot of information about their other interfaces (which are also very cool), but not this one. Here's a quick and dirty copy and paste of the instructions Airborne sent us:

Retailers Boycotting the Rolling Stones

Just like in the '60s, some record stores are boycotting the Rolling Stones. Link. This time the boycott isn't for the band's questionable lyrics or behavior, though. This time it's for their questionable treatment of record stores.

The Stones have a new four DVD set, "4 Flicks." The DVD will only be sold at Best Buy retail stores. Other record chains and independent record stores are upset about being locked out of the Stones latest release.

In Albany, New York, Trans World Entertainment executive VP Fred Fox says his chain will pull Stones catalog from its 940 units, trimming the 72 titles that Trans World stocks to about five albums and returning the product.

"If the Rolling Stones elect to market their new product exclusively with someone because they are more important to them," Fox says, "I would have to step back and question why I would offer the slower-turning, older catalog pieces when I am not afforded the opportunity to sell the newer pieces, which are in higher demand."

I'm on the side of the record stores. If the Stones and their label want to give all of their new business to Best Buy, then let Best Buy stock their back catalog. Manufacturers will arrange sweetheart deals like this with their largest resellers unless the channel whips them back in line.

More SonicWALL

SonicWALL Firewall and VPN, and even more SonicWALL.

Clay Shirky on the Semantic Web

Clay Shirky has a new essay, and as always it's worth reading. This time the topic is the semantic Web, an idea that WWW inventor Tim Berners-Lee has been pushing unsuccessfully for years.

There is a list of technologies that are actually political philosophy masquerading as code, a list that includes Xanadu, Freenet, and now the Semantic Web. The Semantic Web's philosophical argument -- the world should make more sense than it does -- is hard to argue with. The Semantic Web, with its neat ontologies and its syllogistic logic, is a nice vision. However, like many visions that project future benefits but ignore present costs, it requires too much coordination and too much energy to effect in the real world, where deductive logic is less effective and shared worldview is harder to create than we often want to admit.

Any attempt at a global ontology is doomed to fail, because meta-data describes a worldview. The designers of the Soviet library's cataloging system were making an assertion about the world when they made the first category of books "Works of the classical authors of Marxism-Leninism." Charles Dewey was making an assertion about the world when he lumped all books about non-Christian religions into a single category, listed last among books about religion. It is not possible to neatly map these two systems onto one another, or onto other classification schemes -- they describe different _kinds_ of
worlds.

Because meta-data describes a worldview, incompatibility is an inevitable by-product of vigorous argument. It would be relatively easy, for example, to encode a description of genes in XML, but it would be impossible to get a universal standard for such a description, because biologists are still arguing about what a gene actually is. There are several competing standards for describing genetic information, and the semantic divergence is an artifact of a real conversation among biologists. You can't get a standard til you have an agreement, and you can't force an agreement to exist where none actually does.

Sex Sells, or at Least Increases Click-Throughs

I meant to link to the ScotteVest a while back. In a nutshell, it's a vest for gadget geeks. Loads of pockets, and a hole in each pocket so you can patch cables between them to create a "personal area network."

The company is in the news again, but this time it's for its advertising rather than its product. They hired Playboy centerfold Rebecca Scott to model their vests. Result? Clickthroughs more than doubled.

Wal-Mart Profile

Read Fast Company's profile of Wal-Mart. Some people will read this and think "Those bastards! Pushing suppliers to lower prices!" I read it and think "That's how you run a business: more efficiency all the time. If you don't become more efficient, your competition will" The story highlights the fact that Wal-Mart's demanding standards and prices gave Levi's the kick in the pants (heh) they needed to improve their operations.

The trend towards Wal-Mart buying more products from foreign companies (particularly Chinese companies) is a little disturbing, but Wal-Mart is hardly alone. I drive a Japanese car (albeit one made in the U.S.) so I'm not about to throw stones there. More and more products are manufactured overseas. That's been a trend for decades.

AOL Online Shopping Survey

Nashville ranked #1 in AOL's second annual "Online Shopping Cities" report.

The survey examined regional shopping patterns based on average number of times consumers research or purchase products and services online per month, along with the average dollar amount spent online for products and services per month.

The top reasons given for shopping online were: "easier to comparison shop" (27 percent), followed by "I hate crowds and malls" (24 percent), and "I find better deals online" (12 percent). The report is based on a survey of nearly 8,000 adults conducted by Digital Marketing Services Inc.

The top 10 U.S. cities in e-commerce spending

1. Nashville
2. Los Angeles
3. Raleigh
4. Baltimore
5. San Francisco
6. Washington, D.C.
7. Indianapolis
8. New York
9. Miami
10. San Diego

Does Sales Tax Influence Online Shopping?

I've blogged about the results of AOL's Online Shopping Cities survey, which tracks online spending around the country. Nashville, Tennessee came out on top. The question no one seems to be asking is, why Nashville?

Nashville blogger and tax opponent Bill Hobbs noted that some of our representatives in the capital would probably want to use this latest information to justify taxing online sales. Tennessee government was in dire financial straits a few years ago, and the legislature very nearly passed a state income tax. After a bitter fight, the income tax proposal was dropped, and the sales tax raised 1%.

Hobbs gave me an idea. When you buy online, the Web site typically doesn't charge sales tax, unless they have a nexus in the state they're shipping to. Sales tax could be the reason some cities are on the list: their residents are trying to avoid state and local taxes.

I found sales tax data at The Sales Tax Clearinghouse, as shown in Table 1. The tax rates are a weighted average for the entire state that include county and city rates. So for instance, Los Angeles, San Diego and San Francisco are shown as having the same rate, though that's unlikely to be true. If anyone can point me to a free source of sales tax information by city, I'll amend the table to use city-specific data.

With the highest combined sales tax in the nation at 9.35%, it's no surprise that a Tennessee city tops the list. Some high sales tax states that didn't show up on the top 10: Texas (7.9%), Oklahoma (7.95%), and Louisiana (8.5%). I'm curious to find out if those states show up in the top 25, but so far I haven't been able to find AOL's complete data online, just abstracts and news reports.

Clearly, one disadvantage of a sales tax is defection: people will go to other states to avoid paying excessive taxes. This isn't just an online issue for Tennessee. It also influences decisions to use mail order, or to simply drive across the state line. Tennessee borders eight other states, all of which have lower sales tax, and two of the four largest cities (Memphis and Chattanooga) sit on the state line.

UPDATE: Chip Taylor points to this study by Austan Goolsbee. Goolsbee concludes that sales tax does encourage online shopping, and warns that applying sales tax to the Internet could reduce online spending by as much as 24 per cent.

Do you love to shop?  Have you ever considered online shopping? If you love the internet, why not do all of your shopping online? If you are on the hunt for the perfect bedroom furniture, or you are in need of the best electronics, we can help!  For the biggest selection of merchandise, at the most affordable prices, sign online and do your shopping today!

E-commerce Cracks the Top 10 - in Complaints

For the first time, e-commerce moved into the top 10 categories of consumer complaints at the Consumer Federation of America. E-commerce tied with four other categories for seventh through 10th place. The top five categories for complaints were Automobile Sales, Home Improvement, Automotive Repairs, Credit, and Advertising/Telemarketing.

The top five sources of complaints in the e-commerce category were:

1. Merchandise ordered over the Internet
2. Internet Auctions
3. Internet Service Providers (ISP’s)
4. "On-line" Sale of Credit, Loans, and Mortgages
5. Business opportunities: Get rich quick, work-at-home, and multi-level marketing

Only the first category would seem to involve e-tailing, and the description suggests that many of the complaints stemmed from auction and classified ad purchases and sales gone wrong:

Buying products and services online led to complaints about misrepresentation of goods offered for sale, failure to deliver or late delivery of purchases. Some consumers fell victim to elaborate schemes using falsified or stolen certified checks as a method of payment. The perpetrator of these frauds was often in another country or successfully masked their location by a network of contacts.

International fraud is a real problem. At my e-tail operation we set strict rules for international sales based on hard-won experience. We require international customers to provide a FedEx number for shipping charges, provide a tax ID for Customs, and pre-pay the order via wire transfer. We don't accept credit cards for international orders because our credit card provider doesn't allow it. Even if they did, it's a bad idea. There's no economical or effective way to pursue credit card fraud internationally.

We also set a $2,500 minimum order for first-time customers (we mostly sell network security software and hardware for the medium business and enterprise, so $2,500 isn't much of a stretch). Before we set that policy (at the request of the shipping department), we sometimes had to go through hours of paperwork to fulfill an international order for a $20 cable. Some business you don't need.

I see the report as basically good news for legitimate online retailers in that more people are spending money online. There are some bad apples in the world, but they're mostly among the ranks of spammers and auction site grifters, not legitimate online retailers taking credit cards. Awareness of online scams will move more people away from auctions and classifieds and towards established e-tailers.

More on Sales Tax and Online Shopping

Following up on my post about high sales tax influencing shoppers to go online, Chip Taylor points to this study by Austan Goolsbee. It concludes that sales tax does encourage online shopping, and includes this warning: "The magnitudes in the paper suggest that applying existing sales taxes to Internet commerce might reduce the number of online buyers by up to 24 percent."

Carnival of the Capitalists #10

A Penny for... is hosting the latest Carnival of the Capitalists, a collection of economic and business writing in the blogosphere. Here are a few highlights.

Fascinating stuff from Jim Berkowitz at CRM Mastery.com: run your company's Web page through the tool mentioned in the article. It's a quick and revealing look at the customer focus of your Web copy.

The Big Picture critiques the old investing shibolleth </gratuitous WOTD usage> "invest in what you know."

The Window Manager has advice on headhunters.

Google Adwords's Latest Idiocy

I was already mad at Google Adwords over this. Now I'm mad again because they've removed our ads for one of our product lines.

The reason? It's a trademarked name and the trademark owner requested it. So I even though I'm an authorized ------- reseller and can sell ------- brand, I can't buy the ------- keyword on Google, which effectively means I can't advertise ------- brand to customers who are searching for ------- using Google. How stupid is that?

Here's the email I received from Google:

New eBay Shipping Feature

I was on eBay tonight selling some crap and ran across a new feature. When you're selling an item, you have to choose a shipping option: either the buyer pays shipping or the seller pays shipping.

If the buyer pays shipping, the seller either has to choose actual shipping costs (to be determined later) or specify an amount to charge. Most people are like me, and don't know what the shipping costs will be until they take the package to UPS.

Now eBay has taken all of the guesswork out of it. You can specify the package weight and your zip code, and eBay will calculate actual shipping charges based on the buyer's zip code. How cool is that?

P.S.The crap fine merchandise I'm selling is a CycleOps bike trainer and PetSafe instant wireless fence. If you're in Knoxville and win the bid, I'll drop them off and save you those shipping fees.

Take My Stuff, Please

The last two auctions went so well that I'm unloading offering more junk quality merchandise on eBay.

Sierra Designs Meteor Light Backpacking Tent

Apollo Light Box for treating seasonal affective disorder (LATER: it's already sold. Someone bought it with the Buy It Now option less than a day into the auction. The last time two people asked me to offer Buy It Now on one of the items, but you can't add it after someone has placed a bid. Now I've learned, and I'll always offer a BIN price.)

If anyone in Knoxville or Maryville wins the auction, I'll drop it off and save you the shipping.

eBay Email Password Scam

I had heard about this, and I finally got it today. It's a password fishing expedition to get eBay members to give out their eBay username and password. DON'T DO IT! eBay never asks for your password in email. In this case, the password gets sent to andrei_ownz@mail.com. I've forwarded this to eBay and Mail.com.

Tuesday E-Commerce Report #1

Welcome to the first edition of what I hope will be a long tradition, the Tuesday E-commerce Report.

Monsters of E-commerce

eBay changed their user ID rules in response to the spam and fraudulent emails many users received. Email addresses are no longer allowed as user IDs. eBay users like yours truly who had an email address for a user ID had their user IDs changed last week.

Microsoft will drop Internet Explorer's support for embedding usernames and passwords in URLs using the username:password@domain syntax. The move is a security measure to confront the problem of spoofed URLs.

Yahoo! has dropped Google from its search results. Yahoo!'s search results will be powered by Inktomi, which Yahoo! purchased last year.

Soverain Software is suing Amazon for infringing on its e-commerce-related patents. Oh, the irony. And the platinumy, too.

U.S. Census Bureau E-Commerce Retail Sales Report

Every quarter the U.S. Census tallies U.S. e-commerce sales in the retail sector, which excludes travel agencies, financial services, manufacturers, or wholesalers. E-commerce sales for Q4 2003 were $17.2 billion, an increase of 25.1 percent from Q4 2002.

Those numbers are pretty big, and e-commerce continues to grow year on end, but how much bigger can it get? To get an idea, compare e-commerce sales to total retail sales. E-commerce currently accounts for only 1.9% of U.S. retail sales. That leaves plenty of room for growth in the e-commerce sector as more homes get Internet access, and more consumers learn to shop online.

Incidentally, the reports's FAQ clearly spells out what they mean by e-commerce: "E-commerce sales are sales of goods and services where an order is placed by the buyer or price and terms of sale are negotiated over the Internet, an extranet, Electronic Data Interchange (EDI) network, or other online system. Payment may or may not be made online." That's not a bad definition at all.

The Periodicals Department

The February edition of The Broadband Report looks at Internet connectivity in the U.S. 56K and slower modems still account for 57% of Internet-connected homes. Any consumer site has to be usable at low bandwidth. (LesJones.com has been terrible for 56K users, but I'm making improvements. The home page of the e-commerce site I manage by day is a svelte 32K including HTML, stylesheets, JavaScript, and 14 images.)

Jakob Nielsen: Targeted Email Newsletters Show Continued Strength - "E-newsletters that are informative, convenient, and timely are often preferred over other media. However, a new study found that only 11% of newsletters were read thoroughly, so layout and content scannability are paramount."

Jakob Nielsen: Risks of Quantitative Studies - "Number fetishism leads usability studies astray by focusing on statistical analyses that are often false, biased, misleading, or overly narrow. Better to emphasize insights and qualitative research."

Clay Shirky has a cogent analysis of Voice over IP.

Danny Sullivan serves up the February edition of The Search Engine Report.

Tuesday E-commerce Report #2

If you use the popular Miva Merchant shopping cart, you'll probably like the Miva Merchant add-ons site.

States want to charge taxes for out-of-state and online sales. Again.

About.com is looking for a guide for their e-commerce section.

A February 26th article in The Wall Street Journal looks at the checkered attempts to move large amounts of inventory on eBay. Several firms tried it without success. The more product they tried to move, the lower the prices sank. Firms that tried it either went out of business or moved off of eBay to their own online storefront.

How technology put an end to the encyclopedia business.

Changes at Yahoo! and AltaVista

Yahoo! is switching to paid inclusion, in which paying sites will be indexed every two days, and everyone else will be indexed once a month. Yahoo! says that payment will not affect ranking.

AltaVista went to paid inclusion a year or two ago, but is now abandoning it. (That's news to me - they just sent us a renewal notice a few weeks ago. For what it's worth, paying for inclusion did not increase our AltaVista traffic, which remained moribund. AltaVista is down to a 0.4% share of the search engine market.)

Opportunity Knocks

Here's an example of an unfilled e-commerce niche. Chris (better known in the blogosphere as Spoons) and Laura are getting married this week. They're old enough that both of them have most of the household necessities. What do they really want to register for? Guns.

Now some of you may not like guns. (I do.) But there's an example of a niche: an online wedding registry for gun lovers. Either step in now before Bass Pro Shops or Dick's Sporting Goods does, or do it better than either of them could. And if you hire me as a consultant you can pay me in store credit until my wife finds out.

Self-Promotion via Amazon

This is an older story, but it came a few weeks prior to the first Tuesday E-commerce Report, so I'm calling it fair game.

In the New York Times piece, Amazon Glitch Unmasks War of Reviewers, we discover through a technical glitch at Amazon that many of the favorable reviews are written by writers and their friends, while the unfavorable reviews are written by their competitors and ideological rivals. Most people in the writing and publishing industry already knew that, but it's nice to be able to prove it.

Here's an example I ran across just the other day. Reading the customer Amazon reviews of Hollywood, Interrupted, what's striking is that most of the reviews are either five stars or one star. So the book is either absolutely terrible or absolutely fantastic, in the partisan opinions of the reviewers. One suspects a campaign at both ends of the ratings.

British Boomers Out-spending Teenagers on Music

For the first time, baby boomers in the UK are outspending teenagers on pre-recorded music.

The cause, of course, is file-sharing and CD-burning. The under-30 set is listening to music. They're just not buying it shrinkwrapped on CDs at Sam Goody's.

I confess to thinking this might be a bad thing. It's possible we're about to see the first generation without its own musical identity. Sure, someone could be a "star" of file sharing, but that doesn't finance videos, tours, and TV appearances that make a cultural splash. This week's top download is unlikely to be Saturday Night Live's musical guest, or entertainment in the Super Bowl half time show. They'll be a critic's darling, but of an industry so squalid that neither they nor the critic will have the power to make waves on the surface. It will be popular culture, but without the popularity.

Steal This Code: Better Web Page Printing

Steal This Code is an occasional feature demonstrating useful Web code that's easy-squeezy.

To control what gets printed, you can do some fancy server-side programming to create a print version, or you can go the easy route and use CSS print stylesheets to determine what gets printed and what doesn't. That's how I created the non-printing sidebar on the front page of LesJones.com. You can see the effects by choosing Print Preview in your browser's File menu.

You may also want an easy way to direct customers to printing. This is amazingly easy JavaScript. Create a button or link. Within the INPUT or A tag, include this attribute:

onClick="window.print()"

That's all it takes. I use a button on our invoice page to remind customers to print their invoice. It works just like choosing the File menu's Print command. Click this button to give it a try:

Tuesday E-commerce Report #3

Alex Wright at Salon looks at the future of deep search engines and who might want them.

Business Week reports that 59% of publicly-traded Web companies made a profit in Q4 2003.

New York state has fined PayPal $150,000 for mis-representing the protections it offers as being equivalent to those of a credit card. A long-standing criticism of PayPal is that it often acts like a credit card, and sometime acts like a bank, but is regulated like neither.

Wilson Web offers advice on finding e-commerce niches. It also has interesting data on U.S. online sales marketshare data from December, 2003. eBay had 26.2% of the market, followed by Amazon at 4.2%, Yahoo! Shopping and Wal-Mart at 1.8% each, and BestBuy at 1.6%.

International E-commerce

Statistics? We got 'em. Internet users in North America: 10 million in Mexico, 16 million in Canada, 199 million in the U.S. Internet users in all European countries combined: 203 million. There's more where that came from at Internet World Stats.

Everyone talks about multi-lingual Web sites, but almost no on ever does it. Knoxville-area e-tailer Smoky Mountain Knife Works has a Spanish language version of their site, La Navaja.

A Spanish language site for customers in the U.S. will make more sense for a lot of U.S. companies than an international site. As I've mentioned before, the Web solves some problems of interational commerce, but it's still not easy. Taxes and import duties are a mess. Customs delays shipping. Eastern Europe, Africa, and the former Soviet states are all hotbeds of fraud.

Payment is another complication. Some credit card merchant acounts (including ours) don't take international credit cards. In lieu of credit cards we use wire transfers, which works for us because most of our sales are rather large. Because of these and other difficulties, we limit international sales to initial orders of $2,500 or more.

Language can be a barrier, even in North America. I've had language problems with customers in Puerto Rico and Quebec. On the other hand, I have a regular customer in South Vietnam who speaks perfect English.

EZ Hacking - the Negative Quantity Hack

EZ Hacking is an occasional feature to note major flaws in shopping carts and Web servers, and what you can do about them.

One of the easiest hacks to check for in your shopping cart is the negative quantity hack. Add two different items to your shopping cart. Now change the quantity of one item to a negative number. So if one item costs $50 and the other $49, change the quantity of the second item to -1. If the shopping cart total in this example shows $1, then the shopping cart is vulnerable to this exploit.

This is especially dangerous if you're selling downloadable products that are delivered immediately in the Web browser or by email. If you're shipping physical items, your accounting or fulfillment department will probably catch the problem during the order review process.

This hack is relatively easy to prevent. If your shopping cart's programming language has an absolute value function, you can use that to ensure the quantity is always positive. You can also fix this on the database backend by specifying that the quantiity field is always positive.

Don't try to fix this problem by using JavaScript to enforce a positive number. JavaScript is a client-side programming language that can be disabled or modified in the browser. All security solutions and final form verification have to be implemented on the server side.

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #4

Google is experimenting with new geographically-targeted Google searches using zip codes. It promises to be a boon for users (who will find local resources) and for advertisers (who will be able to target ads to local customers).

Apple's iTunes has sold 50 million songs in 11 months. There's a business model. Take an activity (file sharing) that was largely illegal and do the legwork to make it a legitimate business.

Numarkets takes over the work of selling on eBay. They photograph the item, write the description, upload the listing, and process the sale and shipping. The company - based in Etowah, TN just down the road from where I live - is using a franchise model to bring their service to cities around the country, and recently got another round of funding.

Extortionists Targeting Web Companies

A man tried to extort Google by threatening to release a software program. The program would have simulated click-throughs on Google ads, which, ironically, would have generated revenue for Google, but would have defrauded advertising customers and generated distrust. Google reported the extortion to Federal authorities, who arrested the man.

A group of hackers demanding $10,000 protection payments targeted online bookies in the UK. The bad guys used DOS attacks designed to keep the sites from accepting wagers.

Delaying a wager by a few minutes is disruptive to online gambling, but other industries are vulnerable. Another potential target would be online brokerage houses. eTrade, for instance, offers a nine second guarantee - any trade not completed in nine seconds is free. A DOS attack that delayed trades by even a few seconds could cost eTrade a fortune in brokerage fees, and undermine customer confidence in the service.

Sweet Spots

Thought-provoking discussion of software pricing at Fog Creek:

With software sold in corporations, as soon as your price gets up in the $3000 level, the amount of approval it needs is so absurd that you are not going to sell products without a salesperson making a few visits. Hiring the salesperson, sending them out to make presentations, hotels, airfare -- now it costs $50,000 to get the sale done just in sales closing costs. That's why you see a lot of software products at $100,000 and a lot under $3000, but anywhere in-between and it's impossible to make sales.

I work for a company that resells products (costing anywhere from $300 to $100,000 per), but which also sells its own consulting services. We're seeing a divergence similar to this in the consulting arena. Lots of work being driven to the low end (which we don't want) and to the high end (which we do want), with a no-man's land in between.

The 2004 Presidential Race and the Internet

Presidential campaigns are trying to stretch their campaign dollars by getting their message out using Internet video.

FundRace lets you enter your zip code to see which candidates your neighbors are contributing to, and how much they're contributing. (There's a $2,000 limit per individual.) Like home property values and prison records, this information is a matter of public record and has always been available, but the Internet has made it much more accessible.

One Possible Approach to Boutique E-commerce

There are an endless number of niches in e-commerce. Some of them only work for big companies, but there are niches open to individuals and mom-and-pop operations. One angle for a small outfit is to combine reviews with e-commerce. This approach would be perfect for an acknowledged authority in a particular field, but it could also be used by a self-appointed expert who does his homework.

Here's a potential example using two Web sites I like: Glowbug and Flashlight Review. Glowbug has been around for a long time. It's a boutique e-commerce site that has a narrow specialization: LED flashlights and keychain lights. Flashlight Review is a site of - you guessed it - reviews of flashlights, keychain lights, and headlamps, but doesn't do any sales.

Imagine taking the well-designed layout and shopping cart of Glowbug, and mixing it up with the extensive reviews of Flashlight Reviews. It could make for an unbeatable combination for anyone shopping for a new light. Also note that those tiny flashlights and LED lights take very little space to warehouse (meaning they'll fit in your spare bedroom or garage), cost very little to ship, and have a high niftiness quotient that make for great gifts and repeat business from gadget hounds.

Amazon of course, performs a similar function with its customer-written reviews. Amazon's customer reviews have been called into question, and unfortunately the same thing could happen with reviews performed in the model I'm suggesting. For instance, the site owner might steer customers towards items that have a higher markup. As with all reviews, the reviewer's impartiality and credibility are factors.

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #5

Monsters of E-commerce

Cronaca blogs a N.Y. Times story about eBay vigilantes: people who intervene in auctions they think are fraudulent. Via Marginal Revolutions.

Wal-Mart has launched their online music store. It's no iTunes, but Wal-Mart is already the biggest company in the Fortune 500, the second-largest CD retailer in the U.S., and the fifth-largest e-tailer overall, so I wouldn't bet against them.

Mike blogs about Amazon's in-store pickup system: specify your zip code, browse the available local products, and pick up the book from a participating local store (currently Borders, Circuit City, and Office Depot). The In-Store Pickup logo marks the items available in the program. This is a huge development in e-commerce: building a network of businesses tied together by a third-party Web storefront. It's a clicks-and-mortar approach using Amazon's clicks and someone else's mortar.

CD Price Fixing Settlement

Music publishers are sending out checks as part of their $63 million settlement with the FTC over CD price fixing. MusicCDSettlement.com is a clearinghouse for settlement information. This FTC page gives the history of CD price fixing. In a nutshell, music publishers maintained artificially high prices by setting minimum advertised prices (MAP) for retailers.

As someone who's been on the receiving end of illegal manufacturer pressure to post minimum advertised pricing, I count this as a small but historic victory for consumers and independent retailers.

Google front page changes

Google has re-designed their front page and search results pages. Frankly, I think the new layout is less attractive, and makes Google's secondary search functions (for news, images, etc.) less noticeable. Usability expert Jakob Nielsen is an advisor to Google. I'll be interested if he has anything to say about the new design.

The other big change is that Froogle is linked from the front page. Froogle (pronounced "frugal") is Google's price-search service.

Unlike price-comparison services (PriceGrabber, MySimon, Nextag, etc.), Froogle doesn't require the e-tailer's co-operation. Froogle indexes prices the same way Google indexes Web page content. At the same time, Froogle will also read a price feed, which is how other price comparison services get their information. A price feed will result in more comprehensive and timely results for your site. One advantage of Froogle for e-tailers is that Google doesn't charge e-tailers for inclusion or click-throughs.

Another small change in Google's interface is in the Sponsored Links section of the search results page. Google no longer displays a bar graph indicating the percentage of users who clicked through to that advertiser.

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #6

Spreadsheets: 25 Years in a Cell discusses some of the limitations of spreadsheets. There's also a lively Slashdot thread. One limitation is that mainstream products like Microsoft Excel take fixed inputs, with no accounting for uncertainty or probability.

PanIP has dropped their patent lawsuits involving e-commerce.

Blog Business World has advice for getting your blog into Yahoo!'s directory. For commercial sites, you have to use Yahoo! Express. The Express editorial review service guarantees a timely review and thumbs up or thumbs down for your entry. Cost is $299 per year. Ouch! A few years ago it was a one-time fee of $150. Oh, well. It's still a small price for an e-commerce site and I've spent marketing money in worse places.

Two Things You Need to Know About E-commerce

Economic blog Marginal Revolutions has an entertaining post about Two Things: the theory that there are two things you need to know about any subject. Of economics they write:

The Two Things about Economics:
1. Incentives matter.
2. There’s no such thing as a free lunch.

One of their readers contributes this dandy crash course in marketing:

The Two Things about Marketing:
1. Find out who is buying your product.
2. Find more buyers like them.
-Racehorse

Herewith my humble contribution:

The Two Things about E-commerce:
1. You can sell anything online that you can sell by mail order.
2. The great fortunes and failures will be in things you can't sell by mail order.

1. This is the conventional wisdom. A Web site can do anything a catalog can do, so if you can sell it from a catalog you can sell it from a Web site.

2. People will try to sell lots of things that don't pass step 1. Some of them, like the company that tried to sell carpet online, will fail. But amid the likely failures a few winners will emerge.

Buying Domains

My latest domain renewal from Network Solutions included a note that they're now offering domain registration terms up to 100 years. They have a new site, 100YearDomainService.com, with details. I'd have preferred perpetual domains. If it's yours, you should be able to register it forever. Even big companies can forget their renewals: in the most famous case, Microsoft forgot to renew Hotmail.com. Luckily, a computer consultant in Nashville helped them out.

According to a recent NetCraft survey, the number of registered domains has decreased slightly.

Selling Domains

I've only sold two domains, but that appears to be two more than most people, so I'll share what I know. The domains, FWIW, were Backpages.com and 56K.COM. I bought the 56K.COMdomain in 1996 and developed it into a popular Web site. At one time, 56K.COM was one of the top 2,000 Web sites for traffic, with 1 million page views per month. I bought the Backpages.com domain with the intention of writing a backpacking Web site, but never got around to it, so instead I sold it to a Rock and Roll historian.

In the spirit of Two Things:

The Two Things about Selling a Domain:
1. Only transfer domains from your current domain registrar to the same registrar.
2. Broker.com has an excellent service for brokering the sale of domain names.

The details:

1. I've always used Network Solutions for domain registration, because they were the only game in town when I started buying domains. When the new domain registrars appeared, the horror stories started. It wasn't that the new registrars were any worse, but with more parties involved in transferring domains, there was more potential for problems. If there's a mix-up in moving a domain between registrars, the finger pointing begins, and it may be impossible to place blame, much less resolve the problem. As a result of these horror stories, I make transfer to the same registrar (Network Solutions in my case) a condition of the Bill of Sale.

2. For Backpages, the sale amount wasn't that big, and the buyer trusted me. For 56K, the amount was enough to give the company pause. By mutual agreement we used Broker.com. Broker.com is a general-purpose broker, but they have a specific provision for domain transfers. The buyer sends money to Broker.com. Once Broker.com sees that the domain has been transferred to the buyer, they release the funds to the seller. The system worked perfectly, and I'd use it again.

Some people haven't been net-savvy long enough to remember when you could register a domain for free. That lasted until 1995. I've lost track of the most expensive domain transfer. Business.com sold for $8 million, but that's been a long time ago in Internet years. If anyone knows of a bigger sale, post it in comments.

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #7

Nuride is a system for drivers to find carpool partners. How does it make a profit? By selling pollution tax credits to local government. Link.

Site Design Problems at New England Tastes

New England Tastes sells Maine lobsters, shipped fresh to your home. Or they would, if anyone was buying:

I have tried several ways to sell, using overture for two dollars a click for the key word lobster and a few others. Since the last of December I have nearly 200 clicks and no sales yet . Dropped overture temporarily and having a fair amount of visitors, still no sales Am I up against a super hard market?

Several people on the biz.ecommerce newsgroup diagnosed some of the problems, and there are several more just below the surface:

• A majority of the page is rendered using JavaScript. That destroys a site's visibility to search engines. This is the first thing I'd change to increase the number of visitors.
• The page is slow to load. The code is bloated with spaces, and there are too many graphics. Lots of visitors are probably bailing out before the page loads.
• The products on the front page are below the fold (they require scrolling to see) even on a 1024x768 screen. They should be higher on the page.
• Related is the fixed table layout that's just 800 pixels wide. It's possible to use flexible layouts that fit on small screens and still take advantage of the extra space on big screens.
• The pictures of the lobsters are terrible. They're too small and were compressed too much. For these prices, I'd expect better pictures of what I'm buying.
• The navigational graphics are rendered as JPEGs, and show obvious JPEG artifacting. Rendered text looks better as a GIF.

What's good

• There's a prominent Shopping Cart link at the top of each page.
  
• Search is available from every page.

Buying Domains

Last week I discussed selling domains. More people buy than sell, so let's take a longer look at the acquisition side.

If you know the domain you want is available, go to any of the current domain name registrars. I'm old-fashioned, and buy everything through Network Solutions. If the domain is available, you pay for it with a credit card for a fixed number of years, then renew as needed.

The .com version of the domain is always the most valuable. People automatically assume that domains end in .com, and modern browsers do, too. Enter "lesjones" into IE or Mozilla and they'll automatically add "www." to the front and ".com" to the back. It may also be a good idea to get the .net and .org variations.

Buying domains that are already taken

What if the domain you want is taken? First, go to the Web address to see if the owner is using the domain for a Web site. If not, that's a good sign: it could be one of the millions of registered but unused domains in existence. I still own half a dozen. The owners of unused domains are more likely to be motivated buyers. On the other hand, if the owner is using the domain for a business, they'll be very reluctant to part with it, with consequently high prices.

Next, contact the owner. You can find contact information using whois. Expect to encounter outrageous demands for even trivial domains. Be tough, and be prepared to walk away. Start with a low bid (a couple hundred dollars) and poor mouth your financial prospects. If you're a recognizable company name, or a financial, legal, or medical concern that people will assume has deep pockets, it may be a good idea to use a third party so the seller won't realize who the true buyer is.

See last week's report for advice on transferring domains.

Buy all the likely spellings

It may be a good idea to buy possible hyphenated versions. If you do buy the hyphenated version, definitely get the non-hyphenated version. cgi-resources.com didn't, and they quickly had a competitor spring up at cgiresources.com. Funny story: expertsexchange.com is an experts exchange, but some people parsed the domain name differently and assumed it was a place for expert sex change. The company eventually started using the experts-exchange.com domain to avoid confusion.

If there's a chance people would confuse the plural and singular forms, get both. Again, cgi-resources.com didn't, and someone else got cgi-resource.com.

For medium to large companies I recommend getting the "www no dot" version. For instance, lesjones.com and wwwlesjones.com. For small companies, there aren't enough hits to worry about, but for more popular sites those misspellings add up. I'm seeing more and more people snapping up those domains, and more and more companies preemptively registering them for themselves. Here's wwwyahoo.com.

Next Week: Can You Sell Carpet on the Web?

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #8

Search Engine Wars: Fighting Dirty Tricks is an audio report from NPR.

They've Got Your Number explains tricks Yellow Page ads use to get your attention.

Rex Hammock considers the implications of Amazon's A9 search technology. Via BuzzMachine.

Credit Card Authentication

I've written before about the need for multi-factor authentication. Beepcard is a new effort to provide RSA SecurID-style authentication for credit card purchases, including online purchases. From Bruce Schneier's CryptoGram:

BeepCard is a technology company. They sell a sound authenticator for credit cards. The demo looks like a credit card -- an actual credit card that passes all the credit card specs for bendability and reliability and everything -- and contains a speaker and a sound chip. When you press a certain part of the card -- the "button" -- it spits out an audible 128-bit random string.

It's a non-repeating string that's reproduced in software at the other end, similar to a SecurID card, so an attacker can't record one audible string and deduce the rest of them.

This is perhaps the coolest security idea I've seen in a long time. They have a demo application where you go to a website and purchase something with a credit card. To authenticate the transaction, you have to put the card up to your computer's microphone and press the button. The sound is captured using a Java or ActiveX control -- no plug-in required -- and acts as an authenticator. It
proves that the person making the transaction has the card in his hands, and doesn't just know the number. In credit-card language, it changes the transaction from "card not present" to "card present."

Can You Sell Carpet Online?

The other week I made a stab at writing The Two Things You Need to Know About E-commerce: 1. You can sell anything online that you can sell by mail order. 2. The great fortunes and failures will be in things you can't sell by mail order.

As an example of something you can't sell online, I gave the example of the company that tried and failed to sell carpet online. I can't find a link to the story anymore, but at the time I just knew it was a crazy idea.

But is it? This week we'll ask the question: can you sell carpet online? I have some qualifications here. Besides managing an e-commerce site for a living, I grew up working in my parent's carpet store, and my dad's family in Dalton, Georgia all owned carpet stores. It all started with my Great Uncle Elbert. He decided that selling carpet to people passing by on I-75 would be a better life than farming, so he turned his chicken coop into a carpet store.

There are a couple of problems with selling carpet online. One is weight. Take it from someone who has rolled and carried miles of the stuff. It's so heavy that you have to use a forklift with a solid steel pole for moving rolls. It's also big: a standard cut is 12 feet wide.

It's one thing to FedEx a DVD to a customer. Shipping a room full of carpet requires shipping by truck freight. Then you have to hope the recipient has a way - via manpower or machine power - to unload it.

The other problem is measurement. Someone at my parent's carpet store always went out to measure the rooms, stairs, etc. Customers sometimes measured themselves first, but we always insisted on measuring it ourselves, because people got it wrong so often.

Measuring carpet for rooms sounds easy, but it isn't, which is why so many people got it wrong. The easy part is measuring a room and sketching it on grid paper. Then there's a puzzle-solving stage, which is much harder. If you buy a piece of carpet big enough for each room, you probably won't make a mistake, but the materials cost goes through the roof. The goal is to use the least carpet and the fewest seams (which are labor-intensive). You have to arrange the cuts so that the leftovers from one room can be used for closets and small rooms. If you have to seam two pieces together, you need to know where the seams will be the least noticeable.

In other words, if you sell carpet by the piece, expect lots of returns as people butterfinger the measurements.

Okay, but can you sell it online? Well, can you sell it by mail order? The only people who sell it by mail order are the carpet mills. Once upon a time my dad drove to Dalton every week to pick up rolls of carpet from the mills. By the mid-1990s there was a well-developed distribution and delivery system, and trips to Dalton were infrequent. Now most carpet is delivered to the store by truck on regular routes, just in time for installation.

The mills have always sold carpet by the cut piece, but with two special rules. Rule one: no returns except for obviously defective products. That prevents the problem with mis-measurement. Rule two: cut pieces cost a lot more. That makes up for the reduced profit from each sales transaction, and for the labor involved in cutting pieces to size.

Another solution to the same set of problems is to sell whole rolls to other retailers. This is the classic case of avoiding business-to-consumer sales in favor of business-to-business sales.

Meanwhile, online carpet sales remains an open market. Home Depot offers flooring online, but not carpet. Home Depot does sell carpet in limited styles in their stores. This could be a perfect bricks-and-mortar sell. Home Depot could offer a greater selection online at their Web site than they do at their stores, ship entire rolls to their stores, then cut the customer's order, and sell any excess to other customers. With a minimum order size they could ensure profitability.

Next week: Marketing 101

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #9

Amazon has entered the jewelry business. That's a huge market, with big players like Blue Nile and The Jewelry Network, as well as smaller, mom-and-pop e-tailers.

jwz describes troubles taking credits for online ticket sales at the DNA Lounge. The problem will be familiar to a lot of people: the customers give addresses that aren't registered with their credit card, so address verification fails.

Virginia Postrel's latest New York Times piece extols the virtues of expanded choice - rather than low prices - in online shopping.

Jakob Nielsen's latest is B2B: Help Your Fans Convince Their Bosses.

Marketing 101 - the Three-Stage Purchasing Model

This is one model of the purchasing process. It has some limitations (which we'll cover at the end), but if it applies to your business you can't afford to ignore it.

Stage 1
The person becomes aware of a product and determines whether or not they would benefit from it.

"A lot of people are buying DVD players. Why would I want to buy a DVD player if I already have a VCR?" (Customers at this stage are too clueless to actually spend money, and a good salesperson can sense it.)

What the customer searches for: general keywords such as dvd, dvd player, dvd movies

Stage 2
The person is convinced of the advantages of a product, so they need to educate themselves about costs, brands and features. Their research progresses from general guides to reviews of specific products.

What the customer says:

"How much does a DVD player cost? What's the difference between a $100 model and a $300 model? What features do I need and what's a good brand?"

What the customer searches for: general keywords, as well as more sophisticated searches such as dvd pros and cons, dvd player reviews, dvd faq

Stage 3
The person narrows their choices to one or a few brands, or a price range and a set of features, and seeks out a reseller who can shepherd them through the rest of the decision-making process and offer a competitive price.

What the customer says:

"I want a Sony or Pioneer 5-disc DVD changer with component video output and DTS sound, and I don't want to spend more than $300."

What the customer searches for: brand names (sony dvd), trademarked product names, specific model numbers or part numbers

As a reseller, you want to reach out to customers in the third stage who are seeking the brands you sell. They've decided they need the product (stage 1) and they've decided on a brand (stage 2). You just have to close the sale and convince them to buy from you. Your only competition is other resellers who carry the same brand.

Customers in stage 3 are the low-hanging fruit. They want to buy what you've got to sell. Market to people in other stages if you must, but unless you're a masochist or secretly want to fail you should make marketing to people in stage 3 your first priority at all times.

Marketing to people in stage 2 is tricky. They may choose a brand that you don't carry. The manufacturer (Sony, Pioneer, etc.) should be responsible for people in this group in order to drives sales to their resellers. I don't recommend advertising to people in stage 2, because at this stage your competition is every brand of DVD player that you don't carry. If you do decide to market to stage 2, you should use co-op funds from the manufacturer.

Marketing to people in stage 1 is an extreme long-shot. These people may never even buy a DVD player. Even manufacturers avoid this group. Sony could market DVD players to these people, but the extra sales are about as likely to go to RCA or Philips as Sony. If anything, Philips, RCA, Sony and other manufacturers should go in together and form the DVD Industry Council or some such to promote DVD purchases. At this stage your competition is whatever else the person might decide to spend their money on instead of a DVD player. As a reseller you have no business marketing at this level.

Limits to the Model

The three stage model assumes a significant cost for the item. Low-cost items like books and movies are more likely to be bought on impulse. The model also doesn't work for commodity items that are bought frequently and don't require research, and that are instead based primarily on price, convenience, or relationship selling.

The e-commerce site I manage sells enterprise network security products. These are costly items purchased by businesses and government agencies. I've found that this model describes our customer's purchasing process almost exactly.

Customers in late stage 2 and early stage 3 need help. They'll appreciate complete descriptions, FAQs, buying guides, reviews, and datasheets. They're generally more likely to buy from sites with helpful email and phone sales assistance. (But once they reach the end of stage 3 they're still likely to shop on price. Salespeople can tell you war stories of spending hours helping a customer with a complicated order or obscure question, only to have the customer get three quotes.)

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Tuesday E-commerce Report #9

Administrative note: Melissa and I are going on our last vacation before the baby comes. The Tuesday E-commerce Report will return May 25.

Link-clickers in India supposedly get paid to click on advertiser's Web links to drive up cost-per-click ad sales.

The Senate has voted to extend the Internet tax ban for four years. The House had sought a permanent ban.

AXA has sued Google, because a Google search for AXA brings up ads for AXA's competitors. I've written about this before.

Costs for Taking Credit Cards

New e-tailers need to figure credit card processing costs into their budget. Here's a review of the expenses you should budget for.

The secure server certificate

Credit card transactions need to be encrypted. There are usually two ways to tell that a page's contents is encrypted at it is sent between the Web browser and Web server. First, there's usually a lock icon in the browser interface. Second, encrypted pages have "https" at the beginning of the URL, rather than the usual "http".

To process encrypted pages, you'll need a Web server certificate issued by a recognized certificate authority. In theory, you could a get a free certificate from various sites around the Internet. The problem with those certificates is that they're not recognized by popular Web browsers. Customers can manually add them, but that destroys your credibility.

To see the certificates recognized by Microsoft Internet Explorer 6, go to Tools menu, Options, Content tab, Certificates button. In Mozilla 1.6, go to Edit menu, Preferences, Privacy &Security, Certificates, Manage Certificates button.

The two-most commonly-accepted certificates are VeriSign and Thawte. Thawte charges $199 per year for a secure Web server certificate. VeriSign charges $349 per year. The difference? VeriSign has better name recognition because they've spent more on marketing. In fact, VeriSign owns Thawte. We've used Thawte certificates for three years and have never had a problem.

Certificate authorities do more than just take your money and email you a certificate. They contact you at your business phone and in your case at least sent a letter to which we had to respond. This address verification helps verify your identity and facilitate consumer trust.

The Credit Card Merchant Account

A credit card enables you to make payment with a credit card. A credit card merchant account enables to take payments from customers with credit cards.

Searching around the Web, many companies offer no startup fees, and monthly fees of $20 and up.

You'll also pay a small, fixed fee per transaction, plus a percentage of the sale. The transaction fee is usually 20 to 35 cents. (A few vendors I found don't have a fixed transaction fee.) This transaction fee explains why charging, say, five cents per page view doesn't work for credit cards: the overhead eats all of your profit. Apple sells songs on iTunes for 99 cents, but they pool all of your purchases together and charge your credit card infrequently to reduce overhead.

The credit card surcharge is anywhere from two to four percent for online transactions. (Fees are slightly lower for offline, card-present transactions.) Discover and American Express about 1% higher charge more than VISA and MasterCard. (Now you know how Discover pays its 1% cashback bonus, and how Amex pays for its rewards program.) You'll need to factor those percentages into your profit margins. The merchant account will eventually lower your processing surcharge if you have high volume and a low charge-back rate.

If that's still too high

So there you go. $200 a year for a Thawte certificate and $20 a month overhead for the merchant account. That's an amount most businesses - even the mom and pop variety - can afford.

If that's still too much, you have other options, particularly if you're just getting started or operating a hobby. PayPal works well, and the premium version lets you take credit cards in addition to PayPal. They also offer a simple Shopping Cart service.

Les Jones is an e-commerce manager living in Knoxville, Tennessee. He offers consulting in Web design and site promotion, and programming in JavaScript, Web+ Markup Language, and the Web+Shop shopping cart system.

Will BlogAds Work? or, Why Glenn Reynolds Should Keep His Day Job

Tuesday E-commerce Report #11

One of the many refreshing things about blogs has been the absence of advertising. That commercial-free nature is fading as bloggers face the economic realities of Web hosting costs, and a need to justify their writing time with a monetary return.

There are a number of existing advertising programs available to bloggers, but BlogAds is the one directly targeted at the market. BlogAds says that the average site makes $50 per month, but the real attention has gone to high-profile bloggers like Glenn Reynolds. He's currently running seven ads at $1000 per month, minus BlogAds' 20% take. Projecting those numbers out, that's $67,200 per year.

Unfortunately, I don't expect those numbers to rise much, if any, before an inevitable decline sets in. BlogAds the company may be new, but they're an old story in terms of Internet advertising.

I speak from experience as both a buyer and seller of Web advertising. From 1997 to 2003 I sold banner ads on 56K.COM. I sold ads directly to advertisers, and sold excess inventory to banner networks. Since 2000 I've done the ad buys in my current job, though I quickly learned that search engine keywords and price comparison services like PriceGrabber were a much better deal than banner ads.

As the Internet caught on, 56K.COM's traffic started going through the roof, but the same thing was happening to everyone else. In early 1997, I applied to DoubleClick, which was the premier advertising network at the time, but I didn't yet have the necessary 100,000 pageviews per month. A little while later I hit that goal, but DoubleClick had changed the goal to 1 million page views per month, which I hit the next year. Blog traffic has similarly skyrocketed since 9/11.

Ad inventories kept climbing across the industry. There were more Web sites, and more people with access to the Web, but advertising demand didn't increase proportionally. As inventories went up, prices went down. 56K.COM's revenues peaked in 1998, though traffic continued to climb.

One trend that hurt banner advertising prices was that click-through rates - the percentage of visitors who clicked on the banner ads - declined dramatically. To compensate for