Cliptomania, LLC is a web store that only sells clip-on earrings (which are also called non pierced earrings) throughout the United States, Canada, Ireland, Australia, and New Zealand. In late 1999, the Santo family – father Jim, mother Candy, and daughter Christy started their e-business with the name Cliptomania in New Jersey. Now Cliptomania is operated from the lower lever of their home in Indiana. Although starting a new business was not easy, and they had no knowledge of e-business, but with the perseverance, patience and enthusiasm, they were successful.
Until now, Cliptomania has become the most successful Web store selling clip-on earrings (Brown, Dehayes, Hoffer, Martin, Perkins, 2012). However, in order to get such achievement, they had to experience a lot of difficulties and challenges.
There are some strategic issues as well as challenges that the Santo family had to face to launch and develop the Cliptomania web store. Setting up and managing the Website Without knowledge or experience with IT background to create and manage a website, starting e-business with only $ 10,000 capital investment, as well as expensive fee for hiring the IT specialist, the Santo family decided to pay a vender for hosting the store.
Thus, Cliptomania was established as a Yahoo! Store with the URL Cliptomania.com. In 2006, The Santos decided to switch to a new web service provider – NetProfits Internet Consulting company, because of having problems with the Yahoo!’s service and increasing in costs of Yahoo!.
Besides, NetProfits company provided them lower cost and better services.
As a result, Cliptomania had the new URL Cliptomania.net. But after a short time, the Santos gave up the new URL and returned the old one, because they realized that the loss they got was more than the cost they saved. The main reason was that the URL Cliptomania.com was used as an indirect link to transfer to Cliptomania.net, and this change seriously affected Cliptomania’s Google relevancy rankings, which showed the important, valuable and reliable web pages. The transfer link could be seen as a spam site by Google’s PageRank technology.
As a result, Cliptomania disappeared from the top 100 of Google relevancy rankings and did not receive attention by a lot of potential customers (Brown et al., 2012). Recommendation: Having the web hosting service can bring e-business many benefits, such as low maintenance because there is no need to hire a webmaster, and problems with hardware or software are web service provider’s responsibilities. Thus, it also helps e-business reduce costs such as the security, backup and server maintenance costs, as well as reduce risks. The e-business is able to deliver ideas, products and services to the entire world using a well laid out web network, and a business also gets server space to store files. Besides, website hosting also includes shopping carts for e-commerce sites, forums, communities and chat panels.
These features help in communicating with the customers and knowing their views on the site. Moreover, another crucial benefit of website hosting is the e-business owner gets a service that gives him or her email accounts. This is an ideal way of establishing e-business professionalism and it also increases a level of customer reliability, because customers can get back to e-business through its email in case of any eventualities (WebFocus Solutions, Inc, n.d.).
Because of these benefits, I think that web hosting service can help the Santos save a lot of time to do more important things, such as finding ways to maintain and continuously improve product and service quality, as well as making attractive promotions to retain loyal customers, attract new customers and make a differentiation with other competitors. Creating their own website is not a good idea for them, and if they want to find another web service provider, they should learn from previous experience and consider every factor carefully. (I can recommend “iPage” – the best web hosting service in 2014, according to “editors review.org”)
At the beginning, the Santos chose Paymentech company, which is integrated with Yahoo! as their partner. Paymentech company’s responsibility is to validate the credit card in order to make sure that the customer address on the order is the same as the billing address of the credit card. After Cliptomania accepted the order, Paymentech collected the money from the credit card company and deposited it in Cliptomania’s bank account once a week. This was a very essential issue for the Santos to avoid fraudulent transactions, which could make any e-business suffer heavily. Besides, the combination between Yahoo! and Paymentech could detect and eliminate most fraudulent transactions, so this was the best selection for the Santos at that time. However, in 2004, they realized that Paymentech was very expensive and difficult to work with.
Therefore, they chose Nova group which provided lower cost and better support at significant savings than Paymentech (Brown et al., 2012). Having a reliable and facile partner for online payment was also an important factor that helped the Santos run their e-business smoothly. Recommendation: I do not have much knowledge of online payment method in United States. But I think if the Santo family is having the good cooperation relationship with Nova, they should maintain this relationship sustainably in the future. Finding a good partner is not always easy. However, if they can find a better company, choosing a better one is also a good idea. In my country, not many people have a credit card, most of them usually have bank account.
Therefore, if people want to order something through the Internet and they stay far from the business, they will go to the bank or use E-Banking to transfer money directly into e-business’s bank account. The e-business owner will receive notification that money is transferred successfully through SMS Banking, and then the e-business will pack the product and send to the customer through post office or other transportations. I do not know if this way works well in USA or not.
Initially, the Santos faced the biggest difficulty to find suppliers for clip-on earrings. Besides, they also did not know anything about jewelry, popular styles or fashion. Searching yellow pages on the Internet for jewelry wholesalers and manufacturers was not helpful. They also met a man who bought overruns and closeouts, but most of them were not attractive. After that, they went to a jewelry district in Manhattan. With perseverance, patience, and maybe a little luck, they finally had the opportunity to cooperate with some manufacturers, who provided them clip-on earrings that they could not have gotten otherwise.
In 2003, one manufacturer designed some exclusive earrings for the Santos and since then, they had their own special designs. However, there was one more problem for them to face – stocking decisions. Candy found a lot of useful information in the Internet, she also used an Excel spreadsheet to help her control inventory, but a lot of issues related to determining what to stock and how much to order still existed (Brown et al., 2012). Recommendation: It is just my opinion, but I think that the Santos should study a course for jewelry designer, so that they can design unique models for their e-business and not depend too much on manufacturer. Owning a manufacturer may be a complex and difficult challenge for them at the moment, but at least they should try to familiarize if they have a chance.
By doing these things, they will not be confused and have troubles when they unfortunately cannot cooperate with old manufacturers anymore. It also makes their Cliptomania differentiate from other e-businesses. Besides, many people are allergic to metal, so the Santos should consider to design special models for them (for example: using high-quality plastic for the clip-ons). With the stocking decision problem, I think the Santos can buy more professional DSS (decision support system) software for inventory management from the reliable and reputable company. They can combine Excel and new DSS software to support them in making inventory decisions and other things as needed. Developing marketing strategy on the Internet.
Marketing strategy on the Web is the most important factor that impacts e-business’s success, because it can bring potential customers to visit one’s web store. The primary way that potential customers can find the Cliptomania store is by entering some keywords such as clip-on earrings on Google, Yahoo! search engine. Today, there are two ways to help a web store appear on search engine results – sponsored links and relevancy ranked listings. Sponsored links are the main way to advertise on the web for Cliptomania. The Santos must bid a specified amount for per click on a Google search for a specific search term. The more money they bid, the higher position among the sponsored links they have. And the Santos tried to be in the top three in several years. They found that relevancy listings are also very important because they express the importance and query-specific relevance of a web store.
The higher position, the more relevant and reliable result. On the other hand, the Santos also used other marketingapproaches such as setting up another website that contains a lot of information about clip-on earrings to encourage visitors to visit Cliptomania, creating some URLs with names that are similar to Cliptomania or clip-on earrings, using the email to send promotion advertising (Brown et al., 2012). Recommendation: Besides above marketing approaches, the Santos should apply more e-commerce marketing strategy to widely develop their Cliptomania. According to Adeshara (2014), mobile shopping is becoming more and more important, so e-business should create sites that worked decently on mobile devices.
In 2014, people will see web store owners scrambling to build sites that positively blossom on smartphones and tablets. Besides, mobile advertising is getting more popular day by day, and a large number of web store owners will start advertising their products and services on mobile devices; they will make an attempt to reach as many mobile users as possible. This is a good strategy for the Santos to attract more potential customers. If they do not perform, they can be overtaken by other competitors. Moreover, the Santos can advertise Cliptomania through social networking sites such as Facebook, Twitter, etc., and concentrate on a very large number of people. In my country, many e-businesses usually post their information and web links on other websites’ forums to attract customers.
Today, Cliptomania sells clip-on earrings throughout the United Stated, Canada, Ireland, Australia, and New Zealand. However, selling overseas has some challenges. Language is one of the most difficult challenges. Although a lot of people overseas can read and write English, Cliptomania’s overseas sales are restricted to English-speaking countries. Verifying the validity of credit cards of overseas customers can also be a difficult problem. Besides, extra taxes, import duties, and higher shipping costs make Cliptomania hard to compete on price with local sellers. Some other problems such as long delays in clearing customs (for example: Britain) and theft problems (for example: Mexico) are also major obstacles for the Santos to deliver the products (Brown et al., 2012).
Recommendation: I feel a pity for the Santos because they must face too many difficulties and obstacles in expanding their e-business to overseas markets. In my opinion, Asian countries are very large and potential market of clip-on earrings, especially Japan, South Korea, Thailand, etc. Asian people usually love to dress up beautifully and wear jewelry. School rules of some countries are really strict, girls are not allowed to pierce their ears in countries such as Japan, South Korea. Besides, Thailand is the country that has a lot of transgender and cross-dresser people, etc. I think most of them like non pierced earrings. If the Santos can overcome the obstacles to sell these countries, they will get very big profits. However, I also know that those obstacles are very difficult to overcome. But if they can do that, I am very pleased to buy some Cliptomania’s clip-on earrings.
Although experiencing a lot of difficulties, including global financial crisis in 2009 and other problems in managing a web store, the Santos still overcame and Cliptomania has become the most successful web store selling non pierced earrings today. There are many factors which lead to Cliptomania’s success. The Santos identified and exploited an attractive item to sell and they do not have many competitors. With perseverance, patience, enthusiasm and unity of Santo family members, they created a reliable web store with honesty, integrity and outstanding service, as well as the high-quality clip-on earrings at good prices.
Moreover, each member of Santos completed their role and managed their e-business very well. However, the more success they get, the more their competitors enter this non pierced earrings market. Therefore, they must maintain and continuously improve their product and service quality to compete. Besides, they also have to use new e-commerce marketing service in order to catch up with modern trends, because the web is a dynamic and competitive environment for e-businesses.
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