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DIGITAL MANAGER

10.12.98  
A Blueprint for Building Your Own Web Store
For the tech-savvy, doing it yourself may be the right thing

Will Pastron admits he's a control freak. The Los Angeles candy retailer could have plunked down $300 a month and gotten a ready-made Web store for his Sweety's Candies from a Web-hosting service. Instead, he built one from scratch. It took him and two other tech-savvy Sweety's employees months to install the software, make it work with the existing databases, and link the system back to his bank.

Yet it was worth it, insists Pastron. He learned how his electronic store works and how to expand it. "It's both a money and a security issue. If you build something yourself, it is easier and less expensive to upgrade over time, because you know how it all works," he says.

Happy as he is with the results, Pastron is in no hurry to sell others on do-it-yourself Web stores: "Hey, it may have been a different story if I weren't a computer person myself," says Pastron. Indeed, the do-it-yourself instinct that lurks in every entrepreneur is counterintuitive. "It's actually cheaper to outsource this one," says Ray Boggs, a small-business analyst for International Data Corp. in Framingham, Mass.

DO -- OR DELEGATE. How do you know it's for you? It's really a two-part decision. The first issue is whether a Web-hosting service can meet your needs. The next is: Can you build a Web store with in-house staff, or do you have to hire technicians to create it for you?

You're beyond the host-service stage if you can project reasonably confidently that you'll make 15% or more of your revenue from the Web in 18 months. Most companies that fit the do-it-yourself model expect to make more than $100,000 a year off the Web. It's a capital investment -- if it takes more than 18 months to make back, it's iffy. Retailers are the best candidates, service businesses are not.

The complexity of your business is also key. If you change your product list often, you're probably a good candidate. No matter how accommodating a Web-hosting service is, communicating changes on hundreds of products a day is a recipe for error.

That's why Marc Arendt, president for Gotta Have It (www.gottahaveit.com), a Falls Church (Va.) online computer peripherals store, struggled for four months and spent $10,000 to $15,000 to build his own Web store. "I have 8,000 items for sale on the Web, and I update prices and inventory constantly, every day," says Arendt, whose store brought in $3 million in revenue since it went live in April, 1997. "Yahoo Store isn't sophisticated enough -- they host baby sites," he says. Still, even Arendt, a skilled computer person, had to tap tech friends to complete his site.

Also, owners of high-volume businesses may want to keep closer watch on the books than a Web host's monthly statement affords. That was the case for Pastron, who makes $250,000 of his $1 million revenue from Sweety's Web store (www.sweetys.com).

The decision to build your own rests first on two basic question: Do you have full-time staffers with computer expertise? And can you spare them for such a time-consuming project? Overestimating your computer skills can be a false economy. It can cost up to $30,000 to hire a technician. Still, if your livelihood will depend on Web revenue, spend it, says Arendt.

Still game? Here's what you'll need to get going:

* A dedicated Web server, at least a Pentium II with 120 MB of RAM because graphics demand lots of memory. Cost: $3,000 to $5,000 for one that will let you grow.

* A powerful T1 line for fast Internet access, which will cost up to $1,200 a month, although you might be able to get by with a fractional T1. It has less capacity, but you could get a break on the price.

* A line of credit for the Web to finance transactions. Arrange to have a link from your lender's computer to yours. For retailers with existing stores, this is often a matter of a simple phone call.

* An E-commerce software package. This lets you take credit-card payments on the Web and automatically route them to the bank for authorization.

Prices for these programs vary, depending on how much you want the software to do. Will Pastron, for instance, bought a $99 package called Foreman Interactive's Internet Creator E-Commerce edition. The catch: It can't do credit-card settlements automatically. Pastron has to print out the forms and mail them. A more elaborate choice is GizmoSoft's WebGizmo Merchant Edition. For $189, it lets you create a Web store where customers can browse and put items that interest them in a virtual shopping cart.

Better packages include Commerce Market's Ready Shop ($749). It helps you build the site and create an online catalog. What's more, it offers sales and traffic statistics, encrypted transactions, and online order fulfillment. ShopZone from Breakthrough Software ($995) does all of that -- and it also allows for easy integration with your other databases with little programming. On top of that, it's compatible with CyberCash, which has become the software standard at almost 95% of all banks. That's the package Arendt picked. The upshot: Go with an E-commerce program that does as much as possible with as little programming required. That makes sense. The idea in business isn't to spend time playing with computers -- it's to spend more time selling face-to-face.

By Rivka Tadjer in New York

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