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While there's no perfect example of a small company with a winning philosophy of technology, the 12-employee Fountain Pen Hospital took the right approach. Over the past five years, it has used technology aggressively but carefully, to know its customers, manage inventory, track best-sellers and weed out losers, enhance marketing, and move into e-commerce on the Web.
Today, about two-thirds of Fountain Pen Hospital's $5 million in annual revenues still derive from sales of new fountain pens and vintage pen repairs and sales. It's a very competitive field, says Ed Fingerman, director of operations at the 54-year-old company: "Excellent customer service is often more important than offering the better price."
As store sales slowed with the advent of the ballpoint, felt-tip, and other modern implements, the Manhattan-based company built a successful catalog business. But it came to see that most buyers were repeats--collectors who feel about an 1898 Waterman as others might about a mechanical Rolex watch from the 1940s. By the mid-1990s, it became clear that the key to growth was tracking customer preferences and matching them to inventory. So Fingerman hired a programmer who designed a customer-database and inventory-management system. It can display each customer's contact information, as well as all prior sales by date, pen type, and amount spent. It will also identify every purchaser of any particular pen and show all sales of a particular manufacturer. "We can even tell customer identities generated by a particular print ad," says Fingerman. "And we know our inventory of any item."
With his X-ray vision of sales, Fingerman knows when to add or drop items from the catalog, how many to keep in stock, and when to reduce prices of slow-moving merchandise.
So much for looking inward. Fountain Pen Hospital was also among the first small retailers to see potential in the Web. Its first Web site--purely informational--was launched three years ago. In February, 1999, fountainpenhospital.com decided to move to online sales and update the look of the site. This time, it made a mistake, hiring a team of moonlighting specialists who, as a part-time proposition, couldn't manage a thousand images and lots of text and sales software. They were fired in December, 1999--and the old site stayed up. "We were penny-wise and pound-foolish," Fingerman says, having lost out on last year's Christmas season, when online buying took off. This time around, he looked for a new Web developer with an established track record--and plenty of time. The site is just about e-commerce-ready, drawing a pretty clean line from the quill to the future.
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