6-1 Case Study II-5 The Cliptomania TM Web Store Submission PDF

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Running Head:IT-657-Q4764 Enterprise Resource Planning 20TW4

6 - 1 ERP Case Study: The Cliptomatia Web Store Jay T Sexton 14 May 2020 Southern New Hampshire University Professor Robert Martinez MBA, EBD

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Table of Contents Case Assessment.......................................................................................................................3 ERP eCommerce Tracking Issues Utilized to Ensure Business Success..................................5 Business Success Plan...............................................................................................................6 Cliptomania’s ERP Key Features..............................................................................................6 Business Specific eCommerce Systems....................................................................................7 Integrated Solutions..................................................................................................................9 Framework Purpose................................................................................................................10 Strengths, Weaknesses, Opportunities, and Threats................................................................11 References...............................................................................................................................12

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Case Assessment Cliptomania, Limited Liability Company (LLC) was founded in 1999 originally in New Jersey and then later in Ellettsville, Indiana. The Santo family was the owners with Ms. Candy Santo as the Chief Executive Officer (CEO) and Mr. James Santo as the marketing director. The Santos came up with the concept of selling clip-on earrings because there was a customer need for those people who could not wear pierced earrings. The Santos set out to create the “Cliptomania TM Web Store” to provide clip-on earrings at a competitive cost. Neither Mister or Misses Santo had any experience in running a business, especially a web site business, they hired Yahoo! a service provider with the expertise and resources to help them start their e-business. The Yahoo! Store who provided software web site templates to help in launching their new business adventure and their company had “spectacular growth in sales during a very difficult period in retailing” ((Slater, Brown, DeHayes, Wainright, & Perkins, 2017). The Yahoo! Store website structure allowed easy to add and delete for sale items, establish and modify product images and descriptions. Yahoo! Had a shopping cart capability allowing customers to select items and then continue to shop to increase one’s invoice in the cart before final purchase. The Yahoo! Store had online ordering which allowed the acceptance of credit card purchases. Once the orders were completed Yahoo! would send the Cliptomania business a completed order. Yahoo! used a Paymentech company as the source to confirm credit card info was supported by a billing address, collect the money, and deposit it into Cliptomainia’s bank account. Santo's initial investment in Cliptomania was $10,000, money from their savings, and was only supposed to be a sideline business for additional income. In 2003 the Santos found that Yahoo! had restructured their website pricing and their operating cost grew from $100 a month to a hosting fee of $49.95 a month plus, $0.10 per item, $0.05 sale fee, and a

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3.5 percent revenue share on Yahoo! store sales. Then it was discovered that Paymentech was charging $0.20 for each credit card transaction processing fee on top of the sales charge percent by the credit card companies.

Cliptomania LLC Information Figure 1 ERP eCommerce Tracking Issues Utilized to Ensure Business Success In the action of selling or buying goods or services and the transference of money and data in the execution of transactions (Shopify, n. d.) executed over the internet an Enterprise Resource Planning (ERP) will need to be able to track marketing, inventory, shipping, and

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customer service and satisfaction. The following is a list of tracking issues that the ERP could help Cliptomania obtain data on the following (Zorzani, 2018): 

Payments made by customers

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Outstanding payments

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Shipment statuses

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Products and inventory

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Supplier relationships

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Details on customers and how your company targets them

An example of Cliptomania Web Store on Yahoo! eCommerce would be when a web shopper stops on Cliptomania’s site to purchase some clip-on earrings, once they have search through the inventory and they place items in their shopping cart, they would then check out and make their purchase. The ERP would generate a receipt and send it to the customer, tells what products need to be packaged, and then print all packaging and shipping labels. Once the package is shipped an email will be sent to the customer with their tracking number so the customer may track their package. Also, the ERP would handle all email marketing that doesn’t require special customization. Cliptomania faced a strategic issue that was locating a wholesaler to purchase earrings from for their business. Mr. Santo found a wholesaler while searching the Manhattan jewelry district. Once Cliptomania acquired the first supplier, additional wholesalers came available until they achieved getting their clip-on earring line and exposure during the International Fashion Jewelry, Accessories, and Gifts (IFJAG) national show. Other issues that required tracking were lower ranking in the market, cost of the foreign country shipping, marketing, and new competitors joining the market. Moving the company in 2001 because of the expensive business space in New Jersey. Cliptomania moved to Indiana and

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Ms. Santo quit her part-time job and Mr. Santo cut back his hours. Paymentech higher costs cause Cliptomania to change its banking functions with a local bank to get lower credit card costs. Search engine advertising required biding on Cliptomania’s advertising position and Mr. Santo kept the business in the top three positions of the major search terms which became costly. Change unforeseen consequences because there was a drop in marketing because moving from one service provider to another and trying to keep to sites up cause a drop in relevancy rankings Business Success Plan Ms. Susan Ward of www.thebalancesmb.com website states that “a successful business plan is a blueprint for any business”. It makes the owners pay close attention operations, financial objectives, budgeting, and market planning. In the exercising of Cliptomania’s budgeting and marketing, planning will explain its target market, exclusive selling intention, finest pricing strategy, and sketch out intent to sell and deliver merchandise to customers. Cliptomania’s ERP Key Features Cliptomania, LLC. ERP needs to be designed to help business operations and management. It must stay in alignment with business strategy and be able to alter its capabilities to match changing business needs of future requirements. The key features that an ERP must have are as follows (SARAS, 2016): 

The strategy of 5 principles; o Integrated and communicative faster operations. o Decision confidently, accurate formulae, and numerical analysis and processing. o Must have Management Information System (MIS) that provides faster, timely alerts,

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o influential grouping, and sorting of information to assist a decision-making process. o Target and Goal achievement on time. o Encourage workflow and simplicity operations, increasing efficiency, and growth. 

Extensible and configurable.

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Integrated

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Secure

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Mobile and browser responsive

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Information analysis, standard or customized to help future assessments.

Cliptomania needs its ERP to help manage the business operations, purchasing in Earring stock, process orders, track foreign sales, manage web marketing, cover advertising, aid relevancy listings, and help with other marketing approaches like site-targeted advertising and email advertising. Business Specific eCommerce Systems To answer why are some eCommerce systems specific to a certain type of business? It is because of intuition, the familiarity of an eCommerce market, a rock-hard business plan, and careful study of required goods and business models. First, you must determine what is your business eCommerce classification and decide on an eCommerce business revenue model. Finally, you must figure out an eCommerce platform that best suits a business need. Mr. Darren DeMatas of the e-commerce CEO website details 5 types of eCommerce Business models that work right now. The following are the business eCommerce classifications:

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B2B: Business to Business, which concentrates on providing merchandise or services from one business to another. o Examples are internet service providers, software application companies, Office supply/furniture companies and data warehousing

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B2C: Business to Consumer, which is where a business sells merchandise or service to consumers with only online purchases instead of in a store. o Examples are Online retailers like Tiger Direct, NewEgg, Wish, Wayfair, Overstock, and Amazon. Some that are both online and mortar-to-brick are Walmart, Target, Bass Pro Shop, Gap, Lowes, Home Depot, Best Buy, and Staples.

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C2B: Consumer to Business which is where a consumer sells goods or services to businesses. o Examples are Google Adword/Adsense, YouTube, Amazon, and eBay which allows consumers to sell their items online (Arline, 2018).

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B2G/C2G: Business or Consumer to Government/Public Administration which is where businesses or consumers sell merchandise or service to a government/public agency. o Examples for B2G would be Lockheed Martin, General Dynamics, Boeing, and any other business that contracts to government and C2G like individuals paying taxes, university tuitions, and other government items like driver licenses. The revenue models are a way of thinking about how to deal with merchandise inventory

management and sourcing. The following are the types of revenue models: 

Dropshipping online store that only uses a credit card or PayPal payments.

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Wholesaling and Warehousing online eCommerce business that has customers make where consumer places an order, supplier pushes order from the warehouse to direct

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supplier, the supplier sends the product to warehouse online store warehouse and then shipped to the consumer. 

Private Labeling and Manufacturing is where a business that makes products sends their plans or prototypes to contracting manufacturers that make the product that can be sent to customers or third-party.

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White Labeling is where a business that manufactures a product allows another business to change the label and put the other business label on the product. Online store orders from the manufacturer, re-labels, and then send to the customer.

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Subscription is where a company routinely sends a product regularly on scheduled times like Dollar Shave Club Integrated Solutions

Cliptomania LLC is a Business to Consumer eCommerce classification using a Private labeling and Manufacturing revenue model. The company gets its earrings from a wholesaler that manufactures the product for the supplier and then the supplier sends the product to the customer. When Cliptomania first started they used an ERP with Yahoo! Store that had Paymentech integrated for the primary purpose to authenticate credit card purchases with customers address on the orders. Yahoo! provided all computer web-based resources and integrated interface and templates for web page development to Cliptomania, but as the years progressed, Cliptomania moved Service providers and changed their accounting agency which was not integrated. This requires Cliptomania to conduct manual integration for their web store.

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Framework Purpose Cliptomania LLC, in the early days only had two computers that had a dial-up connection to Yahoo! service provider. Yahoo! had the integrated ERP that allows the building of a web page like Go Daddy is today and all Cliptomania data was stored in Yahoo’s database and Cliptomania had the management of the website. Yahoo was integrated with Paymentech which once a customer purchased a product Paymentech would verify the credit card information with the customer address information and then would collect the payment and deposit it into Cliptomania’s bank account. In 2004 Cliptomania was not happy with Yahoo’s Paymentech service and transaction fee so the CEO went to a local bank in Bloomington Indiana called Nova which provided a lower cost to the company for processing all payments. Cliptomania once they moved to Indiana their framework was four PCs connect to a network along with a fax machine and a printer and at this time, they were using a 100T wireless modem through a local internet service provider called NetProfits Internet Consulting. This changed Cliptomania web domain from a .com to a .net. NetProfits was cheaper than Yahoo and provided integrated services that were better than Yahoo, but Cliptomania still managed all payments through Nova but was able to review and collect reports over the internet and today Cliptomania now also uses a mobile application and access to the Cliptomania website has a .mobi extension but they have purchased their URLs. Strengths, Weaknesses, Opportunities, and Threats Cliptomania LLC began during a time that still had dial-up connections to a service provider and during the early days, they were a thriving online eCommerce business during a time when retailing was at an all-time low. Cliptomania SWOT analysis shows the Strengths, Weaknesses, Opportunities, and Threats are described in graphic figure 2.

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SWOT Analysis Figure 2

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References Arline, K., (2018). What is C2B? Retrieved from https://www.businessnewsdaily.com/5001what-is-c2b.html DeMatas, D., (2020). 5 Types Of Ecommerce Business Models That Work Right Now, Retrieved from https://www.ecommerceceo.com/types-of-ecommerce-business-models/ SARAS, (2016). Key Features That Are Must Have in Any Enterprise Resource Planning System, Retrieved from https://sarasennovations.com/service/key-features-are-musthave-any-enterprise-resource-planning-system Shopify, (n. d.). What is Ecommerce? Retrieved from https://www.shopify.com/encyclopedia/what-is-ecommerce Slater, J., Brown C., DeHayes, D., Wainright M., Perkins, W., (2017). Managing Information Technology, 7th Edition. Pearson, 20130712. VitalBook file. Ward, S., (2020). Why You Should Write a Business Plan, Retrieved from https://www.thebalancesmb.com/why-write-a-business-plan-2948013

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