Myth 2: Traffic Will Make You Rich
REALITY CHECK: Selling well makes you rich. Traffic only provides eyeballs
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Remember when the idea of E-commerce was really starting to heat up a couple of years ago? Blue Marlin CEO Erik Stuebe does. His company, which sells vintage baseball caps and apparel, was young and primed for an Internet play. Founded in 1994 without any venture financing, it had grown to more than $3 million in revenues. When a Web developer told him that Internet sales could represent as much as 20% of the company's revenues in just three years, Stuebe plunked down $35,000 to launch www.bluemarlincorp.com.
Stuebe wanted an action-packed site, so www.bluemarlincorp.com was designed as a baseball-history- lover's paradise. It used sparkling copy and thrilling animation to spin vivid, romantic yarns about the old minor, Negro, Cuban, and women's baseball leagues. Deeper into the site, customers could buy Blue Marlin's soft, classic-looking hats. And the sales would skyrocket, right?
Not quite. The hits kept on coming; there was no question that the Blue Marlin site was attracting eyeballs. But by the end of 1998, the company had sold only $50,000 worth of merchandise on the Web -- a tiny fraction of its revenues.
Despite modest returns, Stuebe spent $15,000 a year for updates, including a store locator and a media section depicting celebrities like Bruce Springsteen and Gillian Anderson wearing the hats. Traffic was brisk, but revenues never took off. Even today "95% of the people who visit the site don't purchase anything," Stuebe says. "Maybe they're more inclined to buy it retail."
In 1999 the site's revenues started to show signs of life. Blue Marlin expected on-line sales to reach $120,000 for the year -- still a relatively small component of its $5 million in total projected revenues. Now, Stuebe says, he'll be very careful about every dollar he puts into the site. He's already diverted $500,000 originally budgeted for the site and has put the money back into his wholesale business -- where customers will be able to touch and feel his wares.
THE 7 MYTHS OF THE WEB ECONOMY
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