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Herb Palmer: Small businesses concerned about online competition

Business as usual has been a slogan and a dream for America's small business entrepreneurs since Benjamin Franklin opened his little print shop in the mid 1770s.

Business as usual has been a slogan and a dream for America's small business entrepreneurs since Benjamin Franklin opened his little print shop in the mid 1770s.
He published the Philadelphia Gazette (which later became the Saturday Evening Post) and "Poor Richard's Almanac," which promoted thrifty habits and upright living. He was involved in a variety of noteworthy activities such as a civic leader, author, scientist and eventually one of the signers of the peace treaties that ended the American Revolution.
Since then, small business has thrived through the years. Recently a "Want to Marry a Small Business Man" TV program was even proposed.
Big business, of course, has always been a dominating factor on the American scene, tied together by the glue of small business, which has provided most of the jobs. But suddenly a new enemy called "selling online" has appeared on the scene, causing worry and wrinkled brows, especially among those small shop and store owners who provide the jobs and pay the related taxes which pay for our schools and government services.
Women are said to be the world's biggest spenders and the most valuable friends. So what gives after a Web site called "women.com" dipped its toe into the turbulent waters of e-commerce and then quickly yanked it back out.
The Web site "she gets dressed.com," a popular site devoted to clothing accessories, opened in November and closed in March. For all the vast potential of selling to online consumers worldwide, Web companies are finding that it's not as simple as just setting up an invisible storefront.
Women and men, too, like to see the merchandise, feel the quality, try on the item for size, color and fit, and be able to look the salesperson in the eye to discuss important things like service, choice of return or exchange and the cost of postage until finally satisfied.
On the Internet, you might be doing business with a man from Mars. Amazon.com, valueamerica.com, and beyond.com have cut their staffs. E-toys, previously celebrated as the smartest e-commerce outfit, caused some worry and eyebrow lifting when it reported that fourth quarter losses increased even faster than sales.
Cybershop.com, one of the pioneers of e-commerce, did so poorly that it has largely exited the business. It's not that the company, which sold a broad range of discount clothing and electronics, didn't try.
In fact it tried almost everything: direct marketing, charitable promotions, clearance sales, free shipping, customer sweepstakes, even Pokemon tie-ins. "We looked ahead three to five years, and all we saw were more losses," said cybershop president Ken Miller.
Even successful start-ups like giftcertificates.com, which spent $10 million in advertising to achieve $12 million in sales, are scrambling to survive.
Beyond the mergers and acquisitions, it has been difficult to draw broad conclusions about e-commerce.
The first Commerce Department estimate of online sales was $5.3 billion for the fourth quarter. It did not blow away expectations, but it did demonstrate that there is a demand for e-mail commerce services. It also demonstrated that many of these companies are a work in progress.
Bizrate.com, a shopping group whose customers rate those firms they're buying from, polled 800,000 holiday buyers. Only 74 percent said they had gotten their goods on time.
So what were the other 26 percent to do, save their purchases for next Christmas? Only 8 percent of those in the survey said that this was the first time they were buying online. The year before, the figure was 13 percent, which appears to point to a 5 percent increase in unhappy shoppers.
The smart companies are now testing a new procedure by allowing bizrate.com to e-mail its entire employee base of 30,000 to 40,000 people, which may be a major step in the conversion of the Internet into a major shopping mall. But don't give up the ship. In the first three months of this year, the ups and downs of the e-retailers are visible in the stock market.
Showing losses of from 14 percent to 45 percent are such company names as e-toys, cybershop.com, amazon.com, ashford.com, beyond.com and valueamerica.com.
So, here are some helpful words to large and small merchants alike who are feeling the growing impact of the Internet. Put your advertising message in the Budgeteer News with its 50,000 plus distribution on weekends plus a Wednesday edition as well. You might call it BudgeteerNewsResults.com with a personal touch.
Actually you can get the Budgeteer on the Internet at duluth.com.
(Editor's Note: This writer reads the nation's leading newsmagazines to bring important opinions of the day to our cherished readers. Material in this column was obtained from a news release written by David Streitfeld in the Washington Post national weekly edition.)
On the lighter side . . .
Lena went to the doctor about her memory loss. The doctor made her pay in advance.
Ole and his friends were teasing their friend Selmer Trogstad, who was a widower, for running around with a younger woman.
"It's dis vay," explained Selmer. "I'd much radder smell perfume dan linament."
Mrs. Sorenson had her husband's ashes in an hour glass. She commented to Lena that while he was alive, he never worked. "So, now," said Mrs. Sorenson, "he can be useful around da house as an egg timer."
-- Ole and Lena Joke Book

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