Revise the attached paper using APA format --Case Study

Week Three Case Study II-5 – The Cliptomania

Web Store: An E-Tailing Start-up Survival Story”

Prepared by

Darzelle Efferson

Date: 03-25-2015

Overview

In 1999, a family in New Jersey, the Santos, started an e-business of selling non pierced earrings known as Cliptomania. Without any knowledge of e-business, it was their perseverance, patience and enthusiasm that made the business successful. Until now, Cliptomania has become the most successful Web store selling clip-on earrings (Brown, Dehayes, Hoffer, Martin, Perkins, 2012). However, before they achieved this, they came across several obstacles.

Strategic issues and recommendations

The following are some of the challenges the Santos family faced in doing their business.

(a) Setting up and managing the Website

Setting up an e-business needs somebody who is knowledgeable in Information Technology. The Santos had none of that. Furthermore, they had a capital investment of only $ 10,000. Therefore, they had to pay a fee for hiring an IT specialist. The Santo family decided to pay a vender for hosting the store

Cliptomania established as a Yahoo! Store with the URL Cliptomania.com. Later, the Santos decided to switch to a new web service provider - NetProfits Internet Consulting Company because Yahoo was expensive. However, the sales slumped soon after and the Santos decided to return the old one. There was a significant reduction in the traffic the company’s site generated.

As a result, Cliptomania disappeared from the top 100 of Google relevancy rankings and did not receive attention by a lot of potential customers (Brown et al., 2012).

Recommendation: A company should consider web-hosting as it helps businesses reduce costs such as the security, backup and server maintenance costs, as well as reduce risks. It also reduces maintenance cost and problems with hardware or software are web service provider’s responsibilities.

Also, website hosting includes shopping carts for e-commerce sites, forums, communities and chat panels. These features help in communicating with the customers and knowing their views on the site.

This is an ideal way of establishing e-business professionalism and it also increases a level of customer reliability, because customers can get back to e-business through its email in case of any eventualities (WebFocus Solutions, Inc, n.d.).

Creating their own website is not a good idea for them, and if they want to find another web service provider, they should learn from previous experience and consider every factor carefully. (I can recommend “iPage” – the best web hosting service in 2014, according to “editors review.org”)

(b) Finding reliable online payment method

The Santos began by using Paymentech Company for their payments. It validated credit cards, thus ensuring that Cliptomania avoided fraud cases. It collected money from the credit card company and deposited it in Cliptomania’s bank account once a week.

But after realizing in 2004 that Paymentech was expensive, they chose Nova group which provided lower cost and better support at significant savings than Paymentech (Brown et al., 2012).

If the Santo family feels that Nova is giving them a great service, they should maintain doing business with it. Finding a good partner in business is not always easy.

However, Cliptomania should widen the mode of payment to include those who are countries where most people do not have credit cards.

Searching the suppliers and manufacturers

The Santos initially had difficulty getting a manufacturer for the clip-on earrings. The search too long but finally they entered into a deal with some manufacturers. In 2003, one manufacturer designed some exclusive earrings for the Santos and since then, they had their own special designs. However, there was one more problem for them to face - stocking decisions. Candy found a lot of useful information on the Internet, she also used an Excel spreadsheet to help her control inventory, but a lot of issues related to determining what to stock and how much to order still existed (Brown et al., 2012).

The Santos should have knowledge on jewelry designing, so that they can produce unique models for their e-business and not depend too much on manufacturer. This will help them to set their products apart from the rest and shield them from potential problems with manufacturers.

The Santos can also buy more professional DSS (decision support system) software for inventory management from the reliable and reputable company.

(c) Developing marketing strategy on the Internet.

Marketing on the Web brings potential customers from all around the world. Cliptomania should use sponsored links and relevancy ranked listings web store to appear more on search engine results.

On the other hand, the Santos also used other marketing approaches such as setting up another website that contains a lot of information about clip-on earrings to encourage visitors to visit Cliptomania, creating some URLs with names that are similar to Cliptomania or clip-on earrings, using the email to send promotion advertising (Brown et al., 2012).

The Santos should apply more e-commerce marketing strategy to widely develop their Cliptomania. According to Adeshara (2014), mobile shopping is becoming more and more important, so e-business should create sites that worked decently on mobile devices. The Santos can also advertise Cliptomania through social networking sites such as Facebook, Twitter, etc.

(d) Expanding into foreign markets.

Cliptomania has its products in United Stated, Canada, Ireland, Australia, and New Zealand. The challenges that come with overseas selling are: language verifying the validity of credit cards of overseas customers, extra taxes, import duties, and higher shipping costs. Others are long delays in clearing customs and theft problems (Brown et al., 2012).

Cliptomania should explore Asian countries as Asians love to dress up beautifully and wear jewelry. There is potential market of clip-on earrings, especially Japan, South Korea, Thailand, etc. School rules of some countries don’t allow girls to pierce their ears in countries such as Japan, South Korea. Thailand too has a lot of transgender and cross-dresser people, etc. I

Conclusion

Although experiencing a lot of difficulties, including global financial crisis in 2009 and other problems in managing a web store, the Santos still overcame and Cliptomania has become the most successful web store selling non pierced earrings today. The Santos identified and exploited an attractive item to sell and they do not have many competitors. However, the more success they get, the more their competitors enter this non pierced earrings market. Therefore, they must maintain and continuously improve their product and service quality to compete.

References