Web can weave woes for businesses

For Uncle’s Games, Books and More, online exporting is no game.

Internet sales represent about one-third of the Spokane company’s total, and a growing share of those revenues come from customers outside the United States. But Uncle’s Web experts say they learned some lessons along the way about the who, where and how of overseas sales.

Uncle’s Web site, www.unclesgames.com, has been up since 1998, says webmaster Kory Woods, but nothing much happened for a year. Online sales averaged just 10 per week.

Activity picked up when Uncle’s installed shopping cart software that was the best available for small businesses, but still neither were user- nor commerce-friendly. It was enough to get Uncle’s noticed by overseas customers, and enough to get the company into trouble with a not-so-fun game called “fraud.”

Uncle’s did not have software that could verify credit card numbers, nor addresses. Payments would evaporate. So-called customers would insist their orders did not arrive. The unreliability of some foreign mail services made the latter claim credible all too often. Deliveries occasionally took months. Just one fraudulent sale could wipe out the profits from 10 good ones. And Woods says he spent hours each day contending with angry or frustrated customers.

So Uncle’s pulled back. Woods says the company does business only in those countries where mail, Federal Express or UPS is reliable, and with reputable customers. Almost all are in Canada, Western Europe or Japan.

But with the help of consultant John Strong, Uncle’s is installing new software that will better protect the company as it expands its markets, while simplifying transactions for the company and the customer. For example, the improved site enables customers to convert prices in dollars to their own currencies. Shipping options and costs are a click or two away. It’s up to the customers to deal with whatever tariff issues might come into play.

Credit card numbers used by U.S. and Canadian customers are verified to prevent victimization by card thieves. That insurance will be added for other countries as costs come down.

Woods says Uncle’s tries to be as open as possible to minimize potential misunderstandings.

“You want to make it as comfortable as possible for your customer. You want to give them as much information as possible,” he says, adding that language differences are seldom a problem.

It must be working. Uncle’s processes 30 to 35 orders per day, a few worth as much as $1,000. Staff in the basement below the downtown retail space shared with Auntie’s Bookstore has expanded to eight, including two part-time in shipping.

“E(lectronic)-commerce is a lot of work to start out,” Woods says. “But you’ve also got an employee who works 24 hours a day.”

Woods was among the speakers at a recent Spokane seminar on use of the Internet to find new customers. The sponsors, the Council of Better Business Bureaus and U.S. Department of Commerce, especially want small businesses to tap into overseas markets.

Commerce has provided CBBB a three-year, $400,000 grant — with a 2-to-1 match requirement — to help extend use of its Global Trust Mark Alliance into foreign countries. BBBOnLine executive Steve Salter says 17,000 U.S. companies use the mark on their Web sites to assure consumers they are reliable. Officials hope to replicate the Bureau’s dispute-resolution process in other markets because the assurance that a venue exists for settling complaints might encourage more foreign consumers to buy imported goods, he says.

Salter says progress has been slow because consumers in most countries are used to looking to their governments for redress if they feel they have been wronged by a merchant. The BBB was established in the U.S. so merchants could police themselves. Despite the differences in approach, Salter says he hopes an international launch of the mark can take place in 2005.

Rings & Things owner Russ Nobbs says his business encountered some problems early in its overseas dealings, but now ships beads and other jewelry-making goods to 65 countries. So far this year, exports constitute about 7 percent of sales, and customers in Japan and Belgium are among his biggest.

Nobbs says identifying potentially fraudulent sales takes a little experience and common sense. Beware of consumers who want delivery tomorrow, give suspect addresses or telephone numbers, order only the most expense goods and do not care about price, he says.

Most beads are not expensive, Nobbs notes, and anyone who does score a large volume will find that bulk suppliers like Rings & Things are among the few potential buyers.

“Most of our frauds were domestic frauds,” Nobbs says.

Still, he says he is looking at subscribing to a credit card verification service like that used by Uncle’s.

Woods says the rewards from exporting exceed the risks if merchants are alert, willing to work out issues and responsive. His motto: “Semper Gumby” — always flexible.