My Short, Unhappy Life as an E-Tailer A FORTUNE writer aims to become an Internet mogul. Instead he ends up with $4.61 and a few pairs of tube socks. Anyone need a flugelhorn?
(FORTUNE Magazine) – Before I was an Internet entrepreneur, back when I was an ordinary business writer, people would ask me whether covering business gave me moneymaking ideas of my own. Well, believe me, I've had my fair share--like my idea for an exercise club where membership is free but the exertions of the members are captured by tiny turbines and resold on the electricity grid.
Those ambitions have always been thwarted by one problem: lack of capital. But no longer. Recently there's been a proliferation of services like Vstore, QwikStore, Ezystore, Addashop, and Amazon's zShops that allow all of us--what Vstore calls the "FORTUNE 50 million"--to set up cheap storefronts online. It's a beguiling vision: Instead of becoming enslaved to a few monolithic Internet brands, we become a nation of e-shopkeepers. And that got me wondering: Could I, someone with no business experience, get rich online? I decided to open a Vstore. My milieu would be socks.
To do this, I didn't need money. (Building the store is free.) I didn't need tech smarts. In fact, I didn't need anything to sell. Vstore has deals with more than 50 vendors and distributors; make a sale on your Vstore, and one of them takes care of shipping and billing for you, cutting you a commission of around 10%.
The first thing I did need was a good Internet address (Vstore gives you one, but it's long and complicated), so I logged on to the site of Network Solutions, the company that parcels out domain names. The obvious choice, Socks.com, was already taken. So was CyberSocks.com, SuperSocks.com, CyberSox.com, eSox.com, eSocks.com, and SportSocks.com. I later contacted the owner of eSox.com--a cybersquatter in Bordeaux, France--and offered to buy the name from him, but his starting price was $10,000. The owner of SportSocks.com wanted $350,000. I offered $35.
So I settled on BuyTheseSocks.com--less preferable, certainly, but not without some appealing directness. And anyway, I knew exactly how to leverage it into a global brand.
The problem with most sock sellers, see, is that they think they're in the business of selling socks. If only they realized what they're really selling: a lifestyle. BuyTheseSocks.com would therefore be a true destination site, a community of like-minded people. With BuyTheseSocks.com's content-rich environment and robust functionality and scalability, I would aggregate eyeballs, disintermediate the middleman, and revolutionize the sock industry as we know it. (I wasn't exactly sure who the middleman was in this case, but I was dead set on disintermediating him.) Then I'd be showing people what Internet moguldom was all about.
But should the home page be seaweed green or Easter yellow? As I got down to building the site with Vstore's tools, the cornucopia of options overwhelmed me. After many hours of clicking, I finally settled on a color scheme (yellow and blue), a tag line ("Where people and socks come together"), some clip art (a classy woman with a cigarette holder), a company mission statement for the About Us page ("To never sell pants"), and, of course, a product selection. My products included ten varieties of socks from several manufacturers. Shoppers could zoom in on them for more detail, select sizes and colors, and use a secure server to give me their money.
But if you think BuyTheseSocks.com was just about socks, you'd be very, very wrong. My complete inventory: finger paints, propane hoses, saxophones, cargo pants, portable johns, self-help books, axes, Gatorade, groin braces, flugelhorns, FORTUNE publications, swim goggles, Zamfir CDs, tennis balls, and gazebos. Now, this selection might seem rather scattershot to you, but that just goes to show how little you "get" the new realities of e-tailing. You see, there are sublime cross-selling synergies to be had in selling cargo pants alongside Men at Work's album Cargo. Also, if I could sell just one saxophone at $2,175 (as opposed to a pair of socks for $3.19), my 10% commission would come to... Well, let's just say I'd be pretty well fixed, if you know what I mean.
I continued to fiddle with the store's look and feel for weeks, beta-testing it by purchasing a pair of socks that successfully arrived two days later. But my work here was basically done. BuyTheseSocks.com went live Oct. 3. I registered the site on ten search engines, printed up some makeshift business cards, and sent out e-mail coupons to as many acquaintances as possible. This is called viral marketing. I also got some unexpected exposure when Vstore named BuyTheseSocks.com their Store of the Week.
Then, bam--a sale! On Oct. 12, somewhere in America, a shopper logged on to BuyTheseSocks.com and purchased one set of Adidas socks, one can of tennis balls, one pair of earplugs, and some finger paints. Total: $22.95, giving me a tidy commission of $2.29. My instincts had been validated. I had eyeballs. I had click-through. I had buzz. And now that I was tasting some of that instant Internet wealth for the first time, I had a full-blown case of dot-com fever. How big could this get?
I knew buzz needs constant feeding, so I approached my editor, Rick, who had already agreed to serve as my venture capitalist. I pitched him the idea of a series of radio spots on New York City's WCBS radio. If we didn't rid ourselves quickly of as much money as possible, I explained, BuyTheseSocks.com could miss this historic land grab and become an also-ran in the sock space. He was sold. I now had a $150 marketing budget--enough to buy five 60-second spots on WCBS, as long as they ran between midnight and 5 A.M. (Yes, just $30 per ad! Who knew?) I dashed off a script, walked across the street to CBS headquarters to plunk down the money, and let a professional announcer turn my words into a chirpy endorsement.
My ad blitz, targeting the crucial 18-to-34 socks demographic, broke on Oct. 19 and would run five consecutive nights. I hoped my store could handle the sudden spike in traffic. At the end of the week I excitedly logged on to my sales report and found I had sold...nothing. What happened? Perhaps some unseasonably warm weather was to account for the lack of demand, I told myself. But a week later, sales growth was still flat. And then technical issues at Vstore knocked my site out for several days.
I needed more buzz--fast. Commissioning from FORTUNE's art department a sandwich board emblazoned with BUYTHESESOCKS.COM, I headed into Times Square armed with ten pairs of socks purchased from a women's hosiery store. Now, you'd think people would be grateful to a guy who's yelling "Free socks here!" But no. "Why do I get only one sock?" one woman complained. Another got snippy just because I wanted her to return the sock I'd given her. (I'd started running low.) A guy even took a poke at my company's name. "You're never going to sell anything with a crappy sign like that," he added. "Is this a joke?"
It was at this moment, I think, that my original vision began to flicker. This wasn't Internet moguldom. This was Internet martyrdom. It had been almost a month since I'd launched the store, and what had I to show for it? My income statement listed expenses of $150 for advertising, $70 for a domain name, $24.95 for Website hosting, and $40 worth of sock giveaways. Revenues, including commissions on sales to friends and family, totaled $4.61. Meanwhile, an IPO seemed more unlikely than ever, my day job was suffering, and my fondness for writing advertising copy was, frankly, starting to scare me.
The world had not beaten a path to my door. So perhaps we "FORTUNE 50 million" don't have much of a shot at e-commerce gold after all. But, hey, come January, when I get my first commission check, I'll have nearly $5 in my pocket--enough for a box of chocolate glazed at Dunkin' Donuts. Who'll be laughing then, Mr. Crappy Sign Guy?
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