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E-Business Secrets

Family quits jobs, pays the mortgage with Web site
Finding a niche and a strategy pays off

By  Brian Livingston November 19, 2002  

If you can't raise venture capital to "get big fast," as Amazon.com did, your best strategy to build a profitable Web site is to pick a niche and become the best source of products and information for a specific set of enthusiasts.


That's what Jon DeKeles has done with his family-run e-commerce site, LargeScale.com. Its topic is model railroads -- "G scale" or "garden railways," as devotees know them. You might never imagine that this old-timey subject would do well on the Internet, but time has proven it to be well worth the effort.

After working for several years for ZDNet, an online publisher, DeKeles and his wife, Jo Anne, decided last January to quit each of their paying jobs and devote their full time to the site. Run from their home in Post Falls, Idaho -- a town of 18,000 in the state's northern panhandle -- their e-business now earns enough to pay their mortgage and all their living expenses, DeKeles says.

In an interview, he explained that the site, which was founded in 1995, only started making money within the past two years. He found that he needed revenue from three different sources to be profitable:

1. SUBSCRIPTIONS. Aficionados of garden railways pay $21.95 per year for a site membership. Members gain access to articles that aren't available to other site visitors. They also receive a password into discussion forums on model railroad topics.

2. ONLINE ADVERTISING. Although ad buys are down on Internet sites generally, DeKeles says model train manufacturers want badly enough to reach buyers that advertising still makes up a substantial portion of his site's revenue. He also charges advertisers to design e-mail campaigns and Web sites they can use on their own to reach customers.

3. SALES OF TRAINS AND ACCESSORIES. A sister site, GardenRailwayGear.com, sells working engines, train cars, tracks, model buildings, and all the other stuff that goes into a custom-built layout. Members of the main site are eligible for discounts on purchases of gear. A member's annual fee in the main site can easily be recouped in the first purchase from the online store.

DeKeles says the primary printed magazine for large-scale hobbyists has a circulation of about 40,000. By comparison, his site now has 15,000 subscribers, including both the recipients of a free newsletter and a more extensive version that goes to paying members.

It took the recent addition of the third revenue source -- the sale of merchandise -- to made LargeScale.com viable, DeKeles explains. "Subscriptions and ads just weren't generating enough revenue," he says.

Now that he's found a working formula, DeKeles expands his subscriber base by attending conventions, such as the East Coast Large-Scale Train Show. The growth of the business has even inspired his son, Bryan, to start his own e-commerce site, which sells hand-made office accessories: PencilCups.com.

The two sites keep them plenty busy -- when they're not playing with their model trains. For more information, see: http://www.LargeScale.com http://bri.li/4e75

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It's been four years since their classic first book, and the wait is over: Vincent Flanders and Dean Peters' sequel, "Son of Web Pages That Suck," is just as funny and informative as the original, with all new material.

Why is it that we learn so much from examining Web sites that are designed so badly? For whatever reason, the authors milk it for all it's worth, while remaining blessedly centered between the "design for idiots" and the "design for awards" camps. You'll take away a lot from this book, when you're not rolling on the floor laughing: http://www.amazon.com http://bri.li/0782140203

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1. Run your high-tech business this way -- Windows has 85 percent profit margin: http://news.ft.com http://bri.li/43d

2. Tech giants lobby for open access to Net via broadband providers: http://www.news.com http://bri.li/825

3. Costs of building an e-commerce site have markedly declined: http://www.ecommercetimes.com http://bri.li/c0d

4. Poor design really hurts your credibility with users and buyers: http://www.clickz.com http://bri.li/ff5

5. Will your site get banned? Check for search engine no-no's: http://www.promotionbase.com http://bri.li/13dd

6. More businesses are fighting "e-commerce patent" litigator: http://seattle.bizjournals.com http://bri.li/17c5

7. Why Wal-Mart excels in retail sales but is mediocre online: http://ecommerce.internet.com http://bri.li/1bad

8. HTML tips: Convert your old tables into CSS (Cascading Style Sheets): http://www.builder.com http://bri.li/1f95

9. This is award-winning Flash: You've gotta see the "Art Bar": http://www.flash-award.com http://bri.li/237d

10. Who would win, Pamela Anderson or your girlfriend? Ask GoogleFight: http://@www.googlefight.com http://bri.li/2765

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Normally, I wouldn't let anything, um, POLITICAL creep into my writing. But I'm forced to tip you off to the following site, simply because it's one of the coolest multimedia user interfaces I've seen.

Some Brits have assembled audio clips from the actual speeches of President George W. Bush. You use your mouse to drag words and phrases into a little tray, creating a speech of your own making. The prez then reads it back to you through your PC's speakers.

I immediately thought, "I can't wait for them to make one of these for the Democrats!" Well, that may or may not be in the works. But, in the meantime, you'll find this Web page hilarious, no matter what your party may be: http://www.lemonbovril.co.uk http://bri.li/c3a5

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E-BUSINESS SECRETS: Our mission is to bring you such useful and thought-provoking information about the Web that you actually look forward to reading your e-mail.

ABOUT THE AUTHOR: E-Business Secrets is written by InfoWorld contributing editor Brian Livingston: http://SecretsPro.com

Research director is Vickie Stevens. Brian has published 10 books, including:

Windows Me Secrets: http://www.amazon.com http://bri.li/0764534939

Windows 2000 Secrets: http://www.amazon.com http://bri.li/0764534130

Win a gift certificate for a book, CD, or DVD of your choice if you're the first to send Brian a Top Story or Wacky Web Week he prints. mailto:Brian@SecretsPro.com

Brian Livingston is publisher of BriansBuzz.com. Send tips to him at brian@briansbuzz.com.

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