All Aboard!

A new kind of gravy train

Research firm GartnerGroup recently released a report with a frightening headline: "An E-Commerce Web Site Costs $1 Million to Build." The report's findings indicate average cost is expected to rise 25 percent annually through the second quarter of 2001 and labor accounts for 79 percent of the total cost. Time to pack up youre-dreams and open something more affordable like, say, a McDonald's? Not so fast. If you're considering opening your own e-commerce store, you're not too late. You're just in time.

There's still plenty of affordable Web room to go around, according to Juanita Ellis and Steffano Korper, co-authors of The E-Commerce Book: Building the E-Empire (Academic Press) and creators of The E-Commerce Program certification courses at Southern Methodist University in Dallas and the University of California, Los Angeles. "Small businesses can actually pay a CSP [commerce service provider] to build as well as host their solution for a fairly low start-up cost," Ellis points out. "Other entrepreneurs are going in and linking into malls. If they're just selling a few products, they can purchase malls that complement their particular product, which means an even lower start-up cost."

E-commerce Web design and hosting companies abound on the Internet as well as in your local Yellow Pages. Need a good place to start? Try ClickZ Network's (http://www.clickz.com) comprehensive listings of online service providers. One popular Web service is iCat (http://www.icat.com), whose iCat Web Store package starts at $9.95 per month and features a familiar Web browser-based store-building wizard for set-up.

If an online mall seems more your speed, you only have to plug "online mall" or "virtual mall" into any search engine, and hundreds will pop up vying for your attention. Take current hot spot Amazon.com. Via their zShops service, merchants sign up to list individual products on the site, at a cost of 25 cents to $2 per listing plus a percentage of the closing price. Visit iMall (http://www.imall.com) for an example of a large virtual mall composed of individual stores. The Web site, http://www.merchantstuff.com, features store-building wizards and services.

The founders of New Enough Motorcycle Leathers (http://www.newenough.com), Paul and Holly Thompson, went the do-it-yourself route. Paul, 39, explains the idea behind their site which buys, sells and trades used and new motorcycle leathers: "It was basically just a [marriage of hobbies]: motorcycling and computers. I've owned six motorcycles over the years and bought jackets and helmets to match each one. When you trade motorcycles, you're stuck with the gear you bought. Then what do you do with it? I thought it would be a good idea to start a Web site and see if anything would come of it."

Armed with just Microsoft FrontPage (FrontPage 2000 is now available for $149 street) and an ISP to host their site, the Thompsons went from minimal sales to selling more than 250 articles of clothing per month. The e-business is now full-time work for the couple. In late 1999, the Thompsons opened a brick-and-mortar showroom in Lubbock, Texas, to complement their Web site.

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: All Aboard!.

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