This Week's Agenda: Success for E-Commerce (But Not for E-Advertising)

  |  March 4, 2002   |  Comments

A scrappy dot-com that beat the odds and survived believes in marketing, not advertising. Now, some of the rules have changed. SEO is getting tougher; will it force companies to loosen purse strings?

Not every e-commerce start-up failed.

Steve and Jeff Antisdel, for example, are still standing tall. I first profiled them in 1999, when the question was how their online furniture store, FurnitureFind.com, would survive against "giants" such as Living.com.

Now those "bigger" competitors have all died and reporters are calling Steve's office in Buchanan, MI, amazed that they're still in business.

The answer is simple to explain but harder to execute, Steve, the company's CEO, told me.

1. He knew his business. He'd been running a furniture store for 20 years before going online.

2. He didn't discount the difficulty. "This is a tough, tough business. It's 2 1/2 inventory turns a year. You may get a 50 percent margin, but unit sales aren't skyrocketing and prices haven't moved in 50 years."

The Antisdels did go crazy once. They sold out to Hearst's GoodHome.com in May 2000, and Steve even joined its board. They repurchased their assets by December. That cost momentum, plus their margin for error.

3. Steve knows his target market. "Our customers are soccer moms. They're working professional women, with a fairly high household income, who don't hire a decorator." Convenience and value drive them.

4. Steve understands what selling furniture online really means. "We're the Dell model applied to furniture. We represent about 100 manufacturers, but we do a lot of build-to-order, and we don't build it until it's ordered."

5. Steve tested his fulfillment systems thoroughly before he offered them to the market, and he didn't grow beyond his capability.

That's one reason why he's talking to reporters. A $1 to 3 million capital infusion would allow him to pursue opportunities he can't right now, because "we're building from internal cash flow.

"This is not a good time to sell equity," he knows, but the struggle to find even debt is frustrating. "My dot-com competition is gone, my real-world competition is struggling, there's no one else out there with a credible selection and process."

6. Finally, the Antisdels don't spend a lot of money on marketing. They have an affiliate program with 22,000 members. They're big believers in SEO, they buy some placement on Overture -- and that's it.

The affiliate system works because FurnitureFind's average sale is $1,400. Even at 4 percent "that's a big check," which keeps affiliates loyal. SEO is vital because each month's 1 million visitors use 57,000 different search terms to find the store.

The reliance on SEO got the Antisdels into hot water with Google recently.

"We had page-one positioning there for eons," said Steve. "But over the last month and a half, we've been whacked there."

Confirmed. Entering "furniturefind" on Google brought up dozens of the company's affiliates, press releases, and news clippings (including the story I wrote in 1999), but not the Web site.

Calls to Google to investigate didn't get me far. They refused specific comment and referred me to a Webmasters' page. Jeff, whose title is business development director, read that page and acted.

"Many of our affiliates have essentially 'mirrored' interior content pages and content images," Jeff said. FurnitureFind's site has many links back to its leading affiliates.

The solution, Jeff said, is to remove FurnitureFind from Google's index, delete affiliate links from the FurnitureFind site, forbid affiliates to mirror FurnitureFind pages, and then resubmit the site to the index.

The Antisdels hope a Google salesman will call about selling some pay-per-click AdWords. They still have questions about buying them through the company's new automated online application.

Though the Antisdels are spending a lot of time on SEO, they're not spending a lot of money advertising. This probably won't change, even if they get the money they say they need.

So far, a good news e-commerce story, but lukewarm for e-advertising. Down the road, will increasing time, cost, effort, and resources required for SEO mean businesses such as FurnitureFind will take a new look at advertising? Time will tell.

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ABOUT THE AUTHOR

Dana Blankenhorn

Dana Blankenhorn has been a business reporter for more than 20 years. He has written parts of five books and currently contributes to Advertising Age, Business Marketing, NetMarketing, the Chicago Tribune, Boardwatch, CLEC Magazine, and other publications. His own newsletter, A-Clue.Com, is published weekly.

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