Having your own Web site doesn't by itself signal marketing prowess. But having one that pulls in 20% of your sales -- that's a different story

In the summer of 1994, about nine months after they'd opened a small retail shop called Hot Hot Hot in Pasadena, Calif., Perry Lopez and Monica Bosserman Lopez were eager to broaden sales of their specialty hot sauces and foods. They were torn between using a mail-order catalog and setting up their own site on the World Wide Web -- the colorful collection of on-line storefronts on the Internet.

Since they had little technical know-how, they realized they couldn't create and maintain the Web site themselves, so the catalog seemed the obvious choice. Then one of their regular customers mentioned that he ran a Web service company named Presence, and the allure of the trendy new marketplace won out.

Since Hot Hot Hot's first-year sales were on track to reach $150,000, and setting up a small but sophisticated site required an outlay of as much as $30,000, Monica and Perry couldn't easily afford to just experiment with cyberspace. Their site had to crank out business. So the partners set about designing it to be sales-friendly. Step one was to decide which of their 450 products they would serve up on-line. "We could have added all kinds of information and products," says Monica, "but that costs money. Does it increase sales or just create more pages for the user to weed through? In a small business, you need to see a return."

So the partners chose to list only 125 of their products, organized alphabetically and by heat level, country of origin, and ingredients. Working closely with Presence, they developed a 20-page site in three months -- a time frame that included beta testing to make sure users would flow through the site logically, finding the information they wanted quickly and easily. Presence also called up the site from many different kinds of computers, ensuring that the layout functioned well no matter which Web-browser software was used to look at it.

At first the Lopezes wanted to include pictures of every product label on their site. But Perry realized the downloading time would scare off potential buyers. (The larger and more colorful a graphic is, the longer it takes the computer to "draw" the image on the screen.) So the site features text product descriptions with tiny graphic icons that categorize the products. There are labels and product images throughout, but not so many as to discourage browsers. Most of the labels are attached to the best-selling products because Perry assumes customers will wait a bit longer to download that information.

Anxious to process sales immediately, the partners decided to open the site without transaction-encryption software and were surprised to find that half of their early orders arrived on-line with a credit-card number -- and that portion is now up to 75%. "Offering our 800 number on the site helped," explains Perry.

Presence's charge for developing the site was $20,000. Hot Hot Hot is paying the Web service company monthly with a percentage of on-line sales, which softens the cash-flow hit. Once the development cost is paid off, the retailer will pay 5% of on-line receipts as a monthly maintenance fee, which will continue to cover transaction processing (Presence already sends orders directly to Hot Hot Hot's small warehouse) and an hour of labor each month to make changes -- for instance, to add art to display a monthly special. The payback has been quick. The 1,000-plus daily visitors who drop by Hot Hot Hot's site generate 20% of the retailer's total sales -- now up to $300,000 a year -- and tend to buy the more profitable gift packs. The shop processes about 10 on-line orders a day; usually one is from overseas. "So many people know about us," says Monica. "People come into the store because of the site. It's incredible." Not bad for a 300-square-foot storefront.

Hot Hot Hot's founders show what makes for a Web site that works:
On the Web, you're instantaneously a global company. So we tried to use colorful graphics that people would understand even if they didn't get all the English. We kept the icons simple -- fire coming out of the little guy's mouth means the sauce is really hot. The icon strips take a little longer to download, but they're also pictures of the product listings by category, and the buttons you push to get there. Keeping the graphics horizontal and using only a few colors means they download faster.

Dividing our products into cate-gories -- with an icon you can activate for each category -- presents the information in a way that's easy for the user to sort through. It would take too long to look through one list of all 125 products on the Web.

Customers' comfort level is very important with on-line ordering -- especially when you don't have encryption.We send an electronic-mail confirmation of each order. Maybe 1% of the orders are corrected or canceled by customers at that point.

At a lot of sites, you can get lost; there's no visual continuity. It needs to be simple to move around in, like a catalog, where it's easy to flip back to page two if you want. So there's a graphic on each page to keep the continuity going -- like the heat level appearing again at the top of this page. You know you're still in the same catalog. And the icons at the bottom make it easy to get back to where you were.

Hypertext links are what people use to navigate the Web, jumping from page to page by clicking on the highlighted text. You can add hypertext links to external sites as much as you want. But then you're sending people away from your site instead of involving them in your catalog. The one or two external links we use are specifically related to our product, rather than just a cool site users might want to see. Internally, we'd like customers to be able to use a hypertext link to go directly to the order form from anywhere in our site. This is one change we'll be making.

It's important to keep people coming back to the site and to involve them. People were sending us stories about their hot sauces, so we had a contest to pick the best ones and ran those to encourage people to come back. We get lots of requests to carry certain products, and those pay off. The gift pack of four sauces was a customer's idea, and now it's one of our top five best-selling items. n