The Cliptomania Webstore
Cliptomania LLC is a company that sells clip-on earrings via the Internet through its website, www.cliptomania.com. The family owned business venture operated from the lower level of the family’s home in Indiana. Conducting its business over the Internet allows the company to sell its unique products throughout the US, Australia, New Zealand, Ireland, and Canada. The target market for the business consists of individuals who want to wear earrings but are not inclined to have their ears pierced. The Santos family has found an underserved niche market because most stores offer earrings, which are only for those who have pierced their ears. Even when they do offer clip-ons, the stores only provide a limited assortment of the non-pierced earrings.
Strategic Issues Faced
The first major challenge that the Santos faced was in setting up the web store. Candy and Jim did not have any expertise in the design, development, and maintenance of a website. They were presented with two options; to contract an Internet Service Provider or pay a vendor to host the online store. The first option was impractical owing to the couple’s lack of personal experience with or knowledge of the HTML code. They also saw that it would be too expensive to hire someone to design the site and write the code and they would lose control over the overall direction of the website. After a thorough evaluation, the couple decided to go with the simpler and cost efficient vendor option. They chose Yahoo to be their vendor for the online business.
Another problem the entrepreneurs encountered at the beginning was finding the sources of the clip on earrings to sell on the online store. They searched everywhere for suppliers but most of them were out of business and the rest were not as helpful as they would have hoped. The couple also did not have a clue about the latest fashion trends, jewelry, or popular clip-on styles. The lack of thorough knowledge and understanding of the industry and the market meant that most of the items they sold on their site were not very attractive.
The couple also had a problem with space once their business began to pick up. They discovered that they could no longer comfortably work out of their small house in New Jersey. The orders were coming in too quickly and there was not enough space to accommodate them all. They could not find an affordable home in New Jersey, so they opted to move to Indiana, which is much cheaper.
They also encountered a problem with the company that was verifying and processing customer credit cards on their behalf. They found that the company was charging them a heavy monthly fee plus a fee for every transaction and a percentage that the respective credit company would receive. It was also very difficult to communicate with Paymentech and most of the couple’s queries went unanswered. The couple decided to cut ties with the company, and they began to work with Nova, which was much more affordable.
Recommendations and Analysis
The debacle with the search engine relevancy rankings led to a significant drop in revenue for the company. The couple and their children were not paying much attention to the company’s relevancy ranking due to the rush of orders during the holiday season. The result was that the company no longer appeared in the first page of search engine results. The managers of the company need to monitor their search engine rankings more closely and more regularly, to ensure that such a situation does not arise again.
In addition, the competition on the web is only going to become cutthroat. There are instances where competitors have used the company’s name in their web links to mis-lead the customers into opening their web pages instead of the company’s web page. Since Cliptomania is a trademarked name, the company should sue some of its competitors who are using its name illegally. Such legal action would set a precedent that deters other companies from engaging in similar illegal activities.