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Internet Marketing and Retailing
By Paul A. Paterson

January 1, 2003



Ten years ago, the Internet was going to revolutionize how the world did business. We’re still waiting. While consumers haven't abandoned bricks-and-mortar retailers in favor of web-based purchasing, some dogged manufacturers and distributors in the toy industry have turned the Internet into a valuable business-to-business tool.

The Beverly Hills Teddy Bear Co. has been in business for 10 years, but began developing its website only three years ago. After experimenting with a number of website approaches, the company finally settled on the business-to-business model.

"It doesn't take a brain surgeon to tell you it's a long road," notes Patrick Feld, . "We shifted our focus to our roots. Our wholesale distribution is already established, and, boom--it worked."

Feld's company realized that the cost for each new customer acquired on the web was roughly $150. The more cost-effective approach was to train existing clients to use the website to place orders, track production, check invoicing and perform a host of other routine tasks that previously involved telephone or other contact. It's an approach that has worked particularly well with small, independent toy stores.

"It becomes very difficult to service these accounts using traditional means," Feld explains, noting both sides benefit from the business efficiencies. "We don't see a dollar savings, we see a time savings. Just the fact that we put our product lines in an electronic vehicle is a savings. Before we would roll out a new line of products, we would produce an associated promotional material plan. We're not able to save customers any money, but [rather] in terms of time savings and efficiency."

That level of service is just what retailers are looking for, according to Kathleen McHugh, Executive Director of the American Specialty Toy Retailing Association.

"I think for our members, it basically boils down to customer service," McHugh says. "They pride themselves in being able to meet the needs of their clients and this is just one way they do that."

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RELATED LINKS:

Business: Even Small Businesses Can Benefit from an Internet Presence
Supplement: Do-it-Yourself Articles for E-newsletters
Shopping:
   Online Toy Shopping Gaining Popularity

   Do It eBay!


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