Cliptomaniatm Web Store Case

Cliptomania, LLC, established and operated by the Santo's family, is a unique company that started at the height of the internet boom as an online retailer (Brown, DeHayes, Hoffer, Martin & Perkins, 2012). Cliptomania managed to get through the hard times of the recession by providing a product that seemed to be scarcely available in the physical retail stores. It is strongly believed that survival is owed to this strategy. The success of this company is largely due to their marketing and not technology. Products and services provided by Cliptomania gave them the edge required during a time when many other retail companies were not able to provide better overall web user interface experience than them. If Cliptomania had the knowledge of and were able to fund better the technology and systems required at the inception of their business, it's highly likely they may been at a different level today, in size and outreach. Not to say that they haven't, because they have grown substantially and consistently over the years, but it could have brought it about a lot quicker at the beginning. In market of today customers want service and great products. They want to be easy to find, research, review and purchase. Consumers are often suspicious when purchasing items online but Cliptomania eases the concerns by maintaining a relatively liberal return policy of their products with normal minimal to no questions asked. They deliver quality products and exceptional customer service which has been key to their success (Brown et al., 2012).

Cliptomania put in a tremendous effort to pull together some basic HTML web pages without any knowledge or experience. They realized that if their product was successful in local retail stores that there was likely a much larger audience out there that would be interested in buying the product they had to sell (Brown et al., 2012). In 1999, when Cliptomania first started with Yahoo! store, the monthly charge was a flat fee of $100. By 2003 Cliptomania saw charges increase to $49/month for hosting, $0.10/item carried per month, a 0.5% charge on sales, and a 3.5% revenue share on sales originated through the Yahoo! Store search. In addition, Paymentech charged $0.20 for each credit card transaction it processed, which was in addition to a percentage already charged by the credit card companies as high as 3.5 percent. Most of this upswing happened in 2000 when dot-coms went "dot bomb" and internet companies needed to find ways to increase revenue in lieu of expanding customer base (Brown et al., 2012).

One of the main issues that Cliptomania faced along with most other e-businesses was the handling payment transactions. The company chose to deal with Paymentech as the payment processor. This allowed them to quickly establish a secure and safe manner to deal with the financial transactions, not only international transactions but also fraudulent transactions. Paymentech offered a means to verify that the address was legitimate or that in many cases the credit card information was valid for the person making the transaction. In the beginning the Santo's had to manually verify the orders and attempt to find cases that were indeed fraudulent (Brown et al., 2012). This was a significant problem given the volume of orders they were accepting. Paymentech has proven overtime to be expensive when taking all of the fees into account. They are also very difficult to deal with. In 2004, Cliptomania addressed this concern by transferring their financial business to a local bank and Nova which charges them less and are easier to deal with (Brown et al., 2012). Other payment processors should be explored as there are many that are now available including PayPal which is reliable, which is low cost