Reality Check on e-Commerce

Rohit Khare (
Thu, 2 May 96 18:23:52 -0400

Date: Thu, 2 May 1996 15:36:39 -0400 (EDT)
From: David Kaufman <>
Subject: Well thought out "pr-type piece"
To: DCSB <>
Reply-To: David Kaufman <>

I know this is not directly discussing E-Commerce -- but it is really a
good "down-to-earth" reality check. Having just spent a week on the west
coast with 10 companies -- all doing business strategies for selling
products on the Net -- this little piece is kind of refreshing to read.

-- David Kaufman - Boston, MA

Four Easy Steps for Making Money on the Internet

SAN JOSE, CALIF. (May 2) BUSINESS WIRE -May 2, 1996--Making money on the
Internet has proved to be so elusive to so many people for so long that
comedians have taken to ranking it among the great mysteries of life -- like
Jimmy Hoffa's burial site, Elvis' current hideout and the locating of an
Interstate Highway in Hawaii.

Actually, people are making money on the Internet every day, and many more
could be doing the same thing if they just follow these four easy steps:

1. Have customers who are comfortable using the Internet.

The Internet isn't for everybody. At IDS, we advise some prospective clients
that they are wasting their time with a web site. The best candidates for the
Internet are not mass marketers, but businesses selling to businesses where
the individuals who make buying decisions have access to the Internet and are
comfortable using it.

Only selected products are likely to sell on the Internet. Lockheed/Martin,
Stanford University and General Motors, for example, all have high speed
access to the Internet, but web sites about cleaning,
lawn care or shipping supplies probably are not going to reach the people
there who are comfortable using the Internet.

On the other hand, Atmel, a leading supplier of high-performance, non-volatile
memory and logic circuits based in San Jose, has customers who are design
engineers with high-powered workstations. These customers are very
comfortable using the Internet. To them, it is second nature: a few mouse
clicks and down comes the latest data sheet in Adobe Acrobat format.

Another business finding profits on the Internet is the Palo Alto Weekly,
which has a print circulation of 50,000. In January 1994 the Weekly became
the first general circulation newspaper to publish its complete content on the
Internet simultaneously with the printed edition. Over 60% of the residents
in its circulation area have access to the Internet at home or at work, and
the newspaper now has an on-line readership of 20,000. The sections having
the highest readership are classified, real estate, movie reviews and
schedules and restaurant reviews. In many cases, classified ads are drawing
responses from the on-line edition before the print edition is delivered. Ads
in the Palo Alto Weekly are more valuable because of this significant increase
in readership.

2. Provide the information your customers need

We have been talking to a number of companies that are
distributors/wholesalers of commodity products. They produce huge catalogs
that are five or six inches thick and printed on tissue paper with 5 to 10
items per page. We would love to put the catalogs on-line.
It would be a huge project that gets lots of "hits" or people signing on to
see what is there. It would also be a complete waste of time and money. The
people who purchase from these companies work in boiler rooms, maintenance
sheds and construction sites. They are not sitting in a nice clean room in
front of a high speed computer with a fast network connection. What they need
is a catalog that they can look at under a tractor, in a conduit or on a table.

Better left off the Internet are the CEO's welcome message, the latest scenic
photographs and pretty graphics, 41 levels designed by a "cognitive engineer"
and page after page each with one paragraph, double spaced and links to other
hollow pages.

To make money on the Internet, web sites should address the primary concerns
of the consumer: product, price and availability.

The best sites are those that give the consumer information he needs, in the
shortest amount of time. Here are two good examples:

Atmel's 12-page site lists products with links to the data sheets and
specifications in faxback, Adobe Acrobat, Postscript and GIF format. Engineers
frequently remark about how clean and easy it is.

Document Center sells copies of Government and Industry Standards and
Specifications from esoteric alphabet entities like DOD, IEEE, ASTM, ASME and
ISO. The company's site focuses on a searchable card catalog of the 500,000
documents it carries, what's in stock, price and revision history. There are
two pages about ordering information, and that's it.
The people at Document Center understand how purchasing decisions are made
and that they are selling commodities. They use the Internet to distinguish
themselves by price, availability and service from others selling the same

3. Drive customers to comfortable sales channels.

Huge amounts of commerce have been taking place on the Internet for years.
The reason you don't hear about it is because this commerce comprises boring
commercial transactions rather than consumer purchases.
The commercial transactions are conducted with purchase orders, will call and
COD. They don't have the problems perceived with on-line credit cards and
cash. Business transactions are low volume, high value transactions between
known parties rather than high volume, low value transactions between

So why force your potential customers to do something they are not comfortable
with. You already have channels that customers accept and find comfortable.
The Web is an effective vehicle to drive customers to the existing sales
channels. As time progresses and faceless electronic transactions become
accepted, they will be integrated into a new comfortable sales channel.

4. Let your customers know about your Web Site.

The most effective way to inform an audience is promotion in the places where
they "hang out." The Palo Alto Weekly promotes its site in the hardcopy
editions of the paper. For Atmel, promotion is in the technical publications
read by design engineers. For Risk Management Solutions, it is a direct mail
postcard featuring its home page. For Document Center, its ads in library
journals and bingo cards mailed to members of professional associations like
the IEEE. For The Company Corporation, the medium is the Wall Street Journal,
Home/Office Computing magazine and airline in-flight publications. In every
case, the goal is to get the customers to access your site the next time they
are in front of a browser.

Other places to promote your web site are business cards, post cards, the
empty space on every purchase order and invoice, and the back/bottom of each
ad, brochure, warranty card, catalog page, user manual and letterhead. These
are the places companies list their phone numbers. The true great mystery of
life is not how to make money on the Internet, but why do so many people
trying to do it fail to take every opportunity to list their WWW addresses?

Marc Fleischmann is President and CEO of Internet Distribution Services Inc.,
a Palo Alto provider of complete WWW development facilities from concept to
installation and virtual/remote operations. IDS customers include
CareerMosaic, Clorox, Cybercash, Informix, San Jose Sharks, Nellcor Puritan
Bennett and Philips Semiconductors.


CONTACT: Internet Distribution Services Inc.
Marc Fleischmann, 415/856-8265
Carter Waxman PR
David Grandey, 408/998-5433