To hear Ken Hightower tell it, he's lucky he didn't have an extra $3,000 in his pocket five years ago.
Hightower, who owns a small mattress manufacturing company in Phoenix called Mattress Liquidation Specialists, had gone to a seminar to learn "something about this Internet thing." What he learned scared him.
"Basically, the gist of the seminar was if your business is not on the Internet by the year 2000, you will be out of business," he recalled.
People at the seminar offered to teach him how to construct his own Web site for $3,000, but he didn't have that kind of money. So he bought a book on how to do it himself and joined the e-commerce revolution.
At the time he had a modest manufacturing plant and sold mattresses through some small showrooms in Phoenix-area malls.
But building his own Web site did far more than just get him on the Internet. It helped him get over the intimidation that many small-business owners feel about this new technology, and that gave him an edge on his competitors, he said.
That holds true today because Hightower, who says his revenue has doubled each year since then with sales in all 50 states, became a bit of a techno-freak, learning how to master the tools of this new age. As a result, he said, his company did about $500,000 in business last year, and he expects to top $1 million this year.
The Internet, he said, is the key, because 95% of his business now comes from sales generated as a result of his Web site (http://www.mattresses.net)--with only a fraction from walk-in traffic at his manufacturing plant.
He is able to hold costs down because he doesn't need an expensive showroom. The biggest change is in the kind of customers he is reaching.
Customers still wander into his shop, but they are usually in search of the cheapest mattress available. But Internet customers, Hightower said, are usually looking for high-end mattresses, and that's where the greatest margin of profit is.
None of this would have happened, he said, if he had not learned early on how to stand out in the dark clutter of the Internet. He built the two computers that handle the online hits, and that experience proved essential.
Rather than relying on the expensive services of a hired gun, he tries to keep improving his site so it will get top listings on the Internet search engines.
Hightower, of course, is not alone. The U.S. Small Business Administration estimates that nearly half of all small businesses have access to the Internet, and 35% maintain a Web site. But most use it for e-mail or research, and only about a fourth use it to sell goods or services.
And as survey after survey shows, most are not very good at it. Confusing Web sites and poor customer service are cited most often for the reason that e-commerce still accounts for less than 2% of all retail sales in this country.
According to some experts, including Aleda Roth, professor of business administration at the University of North Carolina, too many small-business owners get so wrapped up in the technology they forget about the customer.
That's a shame, according to Hightower, because the technology available today makes good service possible. The key, he said, is to understand the technology and be willing to experiment with new tools as they become available.
He is especially enamored with HumanClick (http://www.humanclick.com), one of several companies that help businesses monitor their Internet traffic. Like services offered by BroadVision and Siebel Systems, HumanClick reveals what each prospective customer is looking at on the Web page, and what he or she was searching for when the site was found. The software, which can be installed in a few minutes, is available free from HumanClick--at least for now.
The software helps Hightower constantly modify his site, ensuring that the right buzz words are used in the title and text so that more people who are searching for his product will find themselves on his site.
The word "mattress" appears over and over, as well as "discount" and "factory direct." Knowing what customers are searching for, he said, gives him the option of changing his inventory to meet demand.
As we watched his computer in his small factory, located behind a warehouse in an industrial area of Phoenix, at least half a dozen visitors were on his site. Hightower could tell which specific products they were looking at, and which pages on the site they had visited.
"That's what I like to see," he said. "This guy is filling out a purchase form."
Privacy advocates would undoubtedly find this too intrusive at a time when there is growing concern over how much information users unwittingly divulge while surfing the Net. For one thing, visitors to Hightower's site are not told they are being monitored. But merchants like Hightower don't see a lot of difference between that and simply watching a customer walk through a store and noting what they seem to be interested in.