Corrections or additions?
These articles were published in U.S. 1 Newspaper on September 8, 1999. All rights reserved.
On the Ball in E-Commerce
Two entrepreneurs who have staked their fortunes on
E-commerce spoke at U.S. 1’s technology forum last week at the Doral
Forrestal. Jim Medalia, CEO of Kingston-based
Justballs!, is selling equipment for sports activities. Ed McLaughlin,
CEO of Emmons Drive-based Secure Commerce Services, offers online
bill presentment and payment at Paytrust.com. The seminar was part
of the all-day trade show and technology
expo jointly sponsored with the Princeton Chamber.
Internet commerce can’t be compared to anything else, said McLaughlin.
It’s not like anything we have ever seen before. The Internet empowers
the consumer and blurs all the traditional lines on how the product
gets to the end user, said Medalia. It offers 24-hour,
seven-day-a week convenience, limitless selection, and dependable
product selection.
“But time is the Internet merchant’s enemy,” said Medalia.
“It is better to learn from your mistakes than to wait for others
to enter the field and then do a counter punch. Put something up and
then continually fix it.”
Medalia has the world’s only website devoted to selling balls and
has been proclaimed one of the top retailers online. To pursue market
share, he said, you need to spend money. His market, for instance,
is worth $2.3 billion in the United States alone. “If it costs
me $50, for instance, to acquire a customer, and if I can prove that
the total amount spent is $300, and my margin is
50 percent or $150 profit — that means I make three times what
I spend,” said Medalia. “As long as that is a positive number
I will spend any penny I can beg, borrow, or steal.”
McLaughlin helps consumers reduce the paper pile. “Tell us who
your billers are, and what the account is, and we will do almost
everything
else for you,” McLaughlin said. For one monthly fee, $7.95, you
authorize up to 25 payments on your personal, secure web page, and
your bills are stored there for instant access. E-mail tells you that
the bill has arrived, and you can deal with it then or anytime. You
log into a secure area, the Paytrust bill center, and review the bill
and/or pay the bill. Whenever you want to check a bill, it’s on the
Internet for you to view, whether you are traveling or at home. You
can authorize prepayment or pay each bill separately. Your payments
will tap your bank account on the day you specify, and you can set
up quarterly payments ahead of time, avoiding late charges.
“Because we are working for the consumer, we can work with any
bank or biller, and we are working with over 400 billers and every
major bank in the region,” said McLaughlin. “We have already
paid over $1 million worth of bills.”
Medalia spoke of how he decided which E-commerce market to pursue.
He compared books (Amazon.com) and music (CDNow) to the sporting goods
industry and found that all three were large, mature markets, and
that they were fractured markets. What made them particularly
appropriate for E-commerce were three characteristics of the products:
They have a long shelf life and are easy to ship;A huge selection is produced but only a limited portion isavailable in bricks and mortar stores;The products require little after market support butbenefit from extensive pre-purchase information, the kind not usuallyavailable from in-store salespeopleMedalia also noted that all three products cater to theconsumer’sleisure pursuits.How do you get people to come to your cyber store? asked onequestioner. Don’t buy banner ads, said Medalia. Instead, get involvedwith content and do deals. He has negotiated deals to supply balls tohttps://www.shopsports.com,which is an anchor site for AOL, MSN, Yahoo, and ESPN. Paytrust usesadvertising as well as cyber deals. “We have toexplain Paytrust,” said McLaughlin.What about customer service? Both entrepreneurs handle their owncustomerservice call centers, instead of the more usual practice, to contractit out.Focus on the customer, said Medalia, is why his firm holds its owninventory and has 97 percent fulfillment (goods shipped out) in lessthan 24 hours versus 80 percent, which is the high standard for thecatalog industry.McLaughlin said his firm strongly dedicates itself to the needs ofthe consumer rather than of the billers or the banks. Because surveyssay that privacy is a major consumer worry, Paytrust.com sells itsservice on a subscription basis ($7.95 a month), eliminatingadvertising,and therefore maintains strict privacy guidelines. “Privacy issuesdrove our entire business model. We don’t sell your eyeballs,”said McLaughlin. “We keep a maniacal focus on who is the consumerand we deliver the service to that consumer.”As for technology, Paytrust.com is patenting its scanning system andis using proven models for back-office payment. Justballs! extensivelycustomized its inventory software but is not using EDI (electronicdata interchange) with its warehouse facility.How to get the attention of a funder? A good business plan is a mustbut is not enough. Earn your stripes at a venture fair, said theentrepreneurs, or somehow gain an introduction from an insider.Top Of PageStraube’s 100-Year LegacyThe Straube Center has a treasure lode of intriguingtales from the past, but Win Straube wants to showcase the innovativestories for the future. His center on West Delaware Avenue in Penningtonused to be an iron foundry, but now the tenants are founding new technologies.His annual open house celebration, always the second Tuesday afterLabor Day, will be Tuesday, September 14, from 4 to 6 p.m. Everyoneis invited; food will be provided by Pennington Market. Call 609-737-8695.In September 1899, relates Straube, Enoch Knowles and JosephSchiller had a meeting of minds regarding a parcel of land, totransform it into a site for innovation and industry. “Now weare a beehive of invention,” says Straube.His biography “At the Right Place” by Virginia Persing detailshow these buildings hosted a series of tenants who used technologiescurrent for their time. Knowles and Schiller built it as an iron foundry.The tenants that followed made, in succession, coal briquettes, braidedcopper electrical wire, hard candy, aircraft, prefabricated partsfor hospitals, Cointreau liqueur, and cosmetics.The briquette chemist, who was run out of town because of the awfulsmell he produced, and the candy company was shut down because itpolluted the water supply. Some past tenants suffered reverses thatwere merely financial. The cable company, for instance, went bankruptwhen the stock market crashed in 1929. Others were the victim of circumstance:The Cointreau plant burned down, and somewhere on these acres is acache of old, probably broken, liqueur bottles, by now turned to nearpoison.Straube bought the property in 1976 and brought in the first tenantin 1981. On 9.5 acres, eight buildings total 50,000 square feet andhave a vacancy rate of just five percent. Though the 75 tenants includevarious health practitioners, an architect, employment and insuranceagencies, a recycling firm, and a sales office, the tenant list skewsdramatically to high tech companies. Some have one-person officesand others employ as many as 20 people.”We nurture these kinds of companies in fairly low cost spacein a very high tech environment,” says Straube. “The low costcomes through the efficiency and organization; it is top notch quality.”These “intelligent buildings” are managed by an electronicconcierge and have the very latest wiring. Most companies need superfast connections to the Internet and can buy into a share of the center’sT-1 line. Winn Thompson, who markets the property, says thatthe smallest office, a 10 foot by 10 foot space, rents for $280 amonth on a temporary basis. Straube’s tenant list also includes thesefirms:Top Of PageMarket ResearchDavid Burnett & Associates, David Burnett, president.609-737-2324; fax, 609-737-2453. Home page: https://www.dbacompany.com.Focusing on financial services and consumer products for Fortune 500clients.Zeldis Research, Ken Zeldis, owner. 609-737-7223;fax, 609-737-9272.The Dialogue Company, Glen Greissinger, owner.609-737-1110; fax, 609-737-6927. Development and management of nationalconsumer ad/marketing programs for Fortune 500 clientsORYX Group, Anne Miller, owner. 609-818-1001; fax,609-818-1010. Statistical research for pharmaceutical product developmentTop Of PageNew MediaVertiNews.Com, William L. Dunn, chairman. 609-730-9268;fax, 609-730-8652. Home page: https://www.vertinews.com. Coverage,compilation, and delivery of news and research information for professionals.Whitehurst Industries LLC, John Whitehurst, ITdirector. 609-730-0777. Home page: https://www.whitehurstindustries.com.Multimedia, website, and computer game developer, also Anarchy Entertainment.Top Of PageSoftwareCongenomics, Robert Bruccoleri, president. 609-737-6383;fax, 609-737-7528. Home page: https://www.congenomics.com.Bioinformatics and protein modeling; consulting and software developmentfor genomics, structural biology, and computational chemistry.Electronic Business Universe (EBU), Glenn Paul,owner. 609-818-1075; fax, 609-818-1076. Home page: https://www.qwikquote.com.Development and sales of QwikQuote sales quoting software, ElectronicConcierge, Photos by Net.Etsee Soft Inc., Sheshadri Mantha, owner/president.609-730-9180; fax, 609-730-9663. Home page: https://www.etseesoft.com.LifeConnect software, 24-hour monitoring of patients in hospital,also sales force automation software and application localizationfor Japanese market.Princeton Center for Education Services, PeterJ. Rizza Jr., president. 609-737-8098; fax, 609-737-3787. “ExpressTrain”and other electronic learning systems providing interactive classroomteaching via the web or disks.Because two past tenants were big-time polluters, it is ironic justicethat two Straube Center tenants now devote themselves to recycling.Dave Steffens of ERS Imaging Supplies (https://www.ers-imaging.com)converts empty toner cartridges, and Michael Domino of Domino PlasticsCompany (609-737-9600) brokers post-industrial plastic scrap.Straube points to a shining example of tenant ingenuity, the ProductDevelopment Group founded by Carl M. Stern, https://www.pdgrp.com.For small and large companies, this consulting firm develops massmarket products — medical, consumer, nontoy infant products, andtoys. Examples of Stern’s work include an infant gate for Fisher-Price,an infusion pump for Becton Dickinson, an automatic pool cleaner forHayward Pool Products, toy trucks for Nylint Corp., and an industrialsoap dispenser for Loctite.Straube’s favorite: the fire truck that comes with a siren and enginerumble. Children around the world are hearing the toot-toots and thevroom vrooms recorded at the Pennington Fire Department.– Barbara Figge FoxPrevious StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
