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SPECIAL REPORT: MAKING MONEY ON THE INTERNET

Web Site Database Helps Parts Fall Into Place at Electronics Company

Once-expensive Internet capabilities are becoming increasingly available and affordable for small and medium-sized businesses.

March 31, 1997|MIGUEL HELFT | SPECIAL TO THE TIMES

Like many business owners, Paul O'Neil thought he might somehow benefit from a presence on the Internet.

But after looking at many of his competitors' Web sites, O'Neil was unimpressed. They all had pretty pictures and nicely displayed information about the companies, said the president of Gardena-based Pacific Coast Parts Distributors, an $8-million company dealing in consumer electronic parts.

"But you may as well just send out a mailer," O'Neil said. "I think a Web page is kind of useless unless it interacts with the customer."

O'Neil said he couldn't afford to spend huge sums on information technology. But a local database company, Guidance Solutions Inc., was able to put Pacific Coast Parts online complete with its databases, thus making inventory, pricing and ordering information available to customers round-the-clock.

Now Pacific Coast Parts, whose customers include electronics retailers such as Best Buy, Circuit City and Good Guys, does a growing amount of its business directly on the 2-month-old Web site. With the new system in place, O'Neil hopes the company will be able to grow between 10% and 20% annually while reducing expenses.

Online cataloging and ordering systems like Pacific Coast Parts' are not new, of course. But such systems tend to be costly and out of reach for most small and medium-sized companies. The Pacific Coast Parts story, however, is an example of how once-expensive Internet capabilities are becoming increasingly available and affordable.

O'Neil spent about $5,600 on the system. Additionally, he pays a $500 monthly "rental" fee to Guidance Solutions. The company replicates much of Pacific Coast Parts' databases--a process called database mapping--on its own system and provides an easy-to-use interface on the Web.

"We take their data and reorganize it on our machines," said Nick Mavrick, marketing director for Los Angeles-based Guidance Solutions.

Twice a day, Guidance Solutions copies onto its own computers most of the important information from Pacific Coast Parts' array of databases. Those include pricing and availability of more than 140,000 products, as well as customer accounts and ordering and billing information.

"They [Guidance Solutions] are helping the little company move up the technology curve for not too much money," said Sanford Sigoloff, who teaches at the business school at UCLA and had Mavrick as a student.

Before Guidance Solutions developed its online system, much of Pacific Coast Parts' product information was available in digital form. But each supplier's price list was in a different format or on a different system, O'Neil said. Customer accounts were stored in yet another system. Guidance Solutions provided a platform to integrate all the systems into one database.

Guidance Solutions, a self-funded private company, has built about 10 Web-based systems for medium-sized suppliers and distributors since August. Although the price for the systems has gone up to about $20,000, the company plans to continue installing them at a rate of two each month, Mavrick said.

The 2,000 or so daily customer calls at Pacific Coast Parts are not about to go away, O'Neil said. But the number of online transactions is growing steadily, he said.

And the two companies already have begun talking about the next step: letting customers track their orders online.

O'Neil, whose Web site lacks the often jazzy displays of others, said that small and medium businesses looking for a presence on the Web should opt for functionality.

"Pretty pictures slow you down," O'Neil said. "Our Web page is designed to be used, not to be impressive."

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