The Tech Audit: How a Small Retailer Handles I.T.



The Tech Audit: How a Small Retailer Handles I.T.
By DAVID H. FREEDMAN

Courtesy of JetPens
Adrian Mak: “We’d do everything on the cloud if the right tools existed.”

This is the first in what we expect will be an occasional series on how business owners are succeeding and struggling with their technology needs.

The business: JetPens, based in San Jose, Calif., is a 14-person online retailer of mostly Japanese pens and pen-related paraphernalia. The slick, slightly edgy Web site is packed with stuff that you won’t find just anywhere, including pens designed specifically for drawing Japanese Manga-style cartoon art and a five-function eraser. As a result, JetPens has drawn a cult following and fills about 100,000 orders a year.

The owner: Adrian Mak founded the company along with two Stanford University classmates back in 2004. Mr. Mak and his colleagues started the business with $9,000 of their own money because, well, they loved Japanese pens and figured — correctly, as it turned out — that other people would love them, too, if they could get them.

Sources of expertise: Mr. Mak, who did all the programming and I.T. work himself until a few years go, when he hired a full-time tech person, remains a bit leery of I.T. consultants. “We have a lot of customer data and don’t have the sorts of resources that a large company would to protect the integrity of the data when outsiders are working with it,” he said. “Also, the customer experience on the Web site is the core of what we do. We felt we should avoid outsourcing something that important to us.”

What’s working: The heart of the company’s technology set-up is an e-commerce platform built around an open-source software program called osCommerce. “The system has been with us since 2004,” Mr. Mak said. “We’ve customized it beyond recognition, so you could say it’s pretty much ours now.” JetPens also depends on Google Apps for e-mail and for document-based collaboration. PayPal handles the transaction processing and feeds the data right into Intuit’s QuickBooks — the nononline version — which handles all of the financial management, with the help of Intuit’s Online Payroll. The company tracks its Web traffic with monitoring tools Alexa, Compete and Google Analytics. Mr. Mak is also almost weirdly enthusiastic about eHealthInsurance.com, a service that helps small companies set up a health-insurance plan. “It lets you compare all your options right there on-screen,” he said. “Trying to do that by talking to a broker is like trying to order a take-out meal without a menu.”

What the company has figured out:

o The cloud is the way to go, said Mr. Mak, who laments that the online version of QuickBooks isn’t as full-featured as the packaged version. “We’d do everything on the cloud if the right tools existed. Cloud tools get updated all the time with new features, and you tend to pay less for features over time. That frees us up to focus on customizing applications in-house that really allow us to differentiate ourselves.”

o Not everything needs a fancy tool. JetPens does all of its hiring and its tracking of pen-related social-networking and blogging activity with regular documents and spreadsheets.

o Be wary of social coupons.”We’re in a niche where it makes sense for us to be a premium brand, so we’re not going to do something like a Groupon two-for-one deal,” he said.

o Don’t lose sales because items are out of stock. When an item is temporarily unavailable — an all-to-frequent occurrence when dealing with suppliers halfway around the world — the JetPens Web site offers to notify the customer when the product is shipping again.

o Use big, appealing pictures. “A lot of people come to our Web site just to kill time looking at our pictures of pens, with no intention of spending,” Mr. Mak said. “But sometimes they can’t resist the urge to buy.” Because people are used to trying pens out before buying, JetPens also puts up photos of writing samples and sometimes provides videos of the pen in action.

What’s still causing pain: JetPens has depended on the online service Vertical Response for its e-mail-based marketing, a crucial component of the company’s operations. But like most established e-mail marketing services, Mr. Mak said, Vertical Response works with its own copy of JetPen’s customer e-mail list — preventing JetPens from culling and tweaking its customer data on the fly in order to shoot off a more customized minicampaign. “We could do a better job of marketing,” he said, “if we could integrate the marketing list with our database, so that we could say something like, ‘Let’s send off a special e-mail to everyone who has bought this particular product in the last six months.’” There are smaller, more cutting-edge services out there that could probably do that sort of thing, but he fears they wouldn’t have the experience to achieve the high delivery rate that Vertical Response gets.

Fraud protection is another concern. “Because we sell physical goods, when someone gives us a stolen credit-card number we suffer a financial loss,” Mr. Mak said. “If the shipping address is different than the billing address, it can be hard to tell if it’s fraud or someone is sending a gift to their mother. We do what we can to screen orders, but if we’re too strict we lose legitimate sales. There’s room for real innovation here, and we’d love to see a tool that’s affordable to small companies.”

JetPens is also trying to feel its way around Facebook’s relatively new policy discouraging vendors from plying people with free offers in order to get them to “like” the vendors’ stuff. Instead, Facebook now pushes vendors to solicit interest only through applications that require a user’s permission to function. “Even if you’re giving away free things, consumers don’t like to sign up for those apps,” said Mr. Mak. “We haven’t figured out how to be friendly to people on Facebook while staying within the guidelines.”

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