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Archive for Thursday, April 15, 2010

Lawrence retailers expand into online shopping arena

Expanding market is beneficial, but competition is stiff

Laura Pate, 45, looks over a product that she and her mother, Barbara Mozingo, sell in their online-based business, Banana Junction Toys, based in Lawrence.

Laura Pate, 45, looks over a product that she and her mother, Barbara Mozingo, sell in their online-based business, Banana Junction Toys, based in Lawrence.

April 15, 2010

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The Internet has opened new markets for local retailers. While some stores have embraced this, others remain true to their roots.

Weaver’s, which has served Lawrence for more than 150 years, has a Web site that sells gift cards and allows online wedding registry enrollment, but it does not sell products from its site.

Joe Flannery, president of Weaver’s, said online stores have advantages that negatively affect not only local retailers but also communities and the state.

“Having online stores not charge sales tax is a detriment for local communities in the state, and I think because of that it has contributed to our budget shortfalls,” he said.

Others in Lawrence are branching out.

Barbara Mozingo, owner of Banana Junction Toys Inc., developed an online store from her brick-and-mortar store in Indiana in the 1990s.

While the store in Indiana is no longer in use, Mozingo has been able to fill a niche as an Internet toy vendor.

“We fill that market especially for small towns,” she said. “If we are shipping to somewhere in Montana, we know that they can’t get into a big city to look for this kind of product, and we ship all over the world.”

In the early stages of its online presence, Mozingo’s business became an Amazon vendor, which helped spread the word of her company as well as lifted most of the liability.

She also used search engine techniques to move her site and products toward the top in search results as well as global online affiliates like Shopatron that encourage local store pickups and deliveries.

Recently, because of increased competition and inventory problems with Amazon’s system, Mozingo said she and her daughter, who helps run the business out of her home in Lawrence, plan to develop their own retail sites and scrap Amazon.

As for starting another face-to-face store, she said, “never again.”

“With having to pay such high rent and personnel and then you’ve got payroll taxes, this is a family-run store and we can just manage it ourselves,” she said.

Will Katz, regional director for the KU Kansas Small Business Development Center, said selling retail products online is beneficial because it expands a business’ market potential.

“It’s also a little bit of a double-edged sword,” Katz said. “It’s more difficult because you are also competing against stores in California or Canada or anywhere around the globe.”

Katz said face-to-face and online retailers set themselves apart not by always winning the price battle but by being knowledgeable and reliable about products.

“If your expertise is recognized, hopefully you can be that one-stop shop where somebody is going to go ask some questions and get a good price,” he said.

Whether the business is selling a cell phone battery or an authentic doll, Katz said customers want someone who can answer their questions about compatibility or authenticity honestly and in a timely manner.

“(Customers) rely on people that give them good information so if you’re trusted and knowledgeable that can certainly help a lot,” he said.

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