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DQ 1. What do you see as the advantages of starting an online store versus a brick-and-mortar store?
DQ 2. If you were to start an online business, what kind of products would you be interested in selling? What would you anticipate to be your biggest problem?
Please answer the question based from this article :
STARTING AN ONLINE BUSINESS
When Joseph Cohen’s parents left for a weeklong trip out of town, the 14-year-old Brooklyn didn’t plan a big parents-free party. He called a cab, collected the money he had saved up working for his dad, and drove into Manhattan. He returned with $3,000 worth of Christmas decorations, toys, and lights. Joseph put the goods online, adopting the name of his family’s hardware store, Polsteins.
For about $1,000 a month, Joseph opened a Yahoo store account to handle online payments. He also signed onto some Web ad services to generate traffic. Every time someone keyed “Christmas lights” into a Web search engine, Joseph paid 10¢ to 50¢ for a link to Polsteins.com. By the time his parents returned, he had doubled his money and bought more goods to sell.
Soon after selling out the Christmas items, he put a $50 battery-operated Pinocchio doll on his site; 1,000 orders came in. Another early success was a $10 animated kung fu hamster that 2,000 people ordered. Within three years, Joseph’s operation was selling $1.9 million worth of goods annually.
Despite his entrepreneurial ability, Joseph is still a teenager and still has to attend school. He runs his online enterprise out of his office/warehouse after school. He does admit to taking “sick days” from school when business is heavy.
He has made some mistakes, however. The summer he turned 15, Joseph took his eye off the business, doing what kids do during the summer. He went to travel camp, visiting a different North American city each week. At the time, Polsteins was selling a 50-foot rolled flat hose for $20. While he was away for six weeks, thousands of orders poured in and were automatically put on back order.
When he returned from camp, Joseph rushed out the $30,000 worth of back orders, only to dis-cover that the hoses were defective. Once they were returned, he had to repay customers, while applying for refunds from the manufacturer. And because no one had been minding the online store in his absence, the hoses had been left on the site all summer, running up $43,000 in ad charges, built up every time someone clicked on “garden hose.” He stopped the ads, negotiated discounts on shipping, and spent the next three months paying off his debts and rebuilding his store.
A surprise best seller: mason jars for canning. These jars had become hard to find, and Joseph was able to sell thousands to people canning summer fruits and vegetables. Polsteins.com is now the largest customer for Ball and Kerr jars.
Recently Polsteins.com established a partnership with its giant former rival Amazon.com. The company also changed its name to HomeandBeyond.com and announced the introduction of a home shopping catalog filled with household tips and recipes to be called @Home. Cohen, who is now company CEO, said, “Changing our name from Polsteins.com to HomeandBeyond.com allows us to better brand our site as one dedicated to home shopping.”