Open your own shopping mall—online

Black Enterprise, July, 1998

Here's how to set up shop as a cybermall and mind all the stores

When Anthony N. Jones expanded his video wedding invitation business, he built a Web site to reach his market of brides- and grooms-to-be. Within the first month, he received around 100 orders for customized videos (at $3 a pop). Individuals pay him to create and distribute to their guest list taped personalized invitations that include instructions to the church and reception hall, and a photomontage of the couple.

As Jones expanded his business into birthday, graduation and Christmas video invitations, he looked for ways to form alliances with other distributors. He began investigating online malls. Frustrated with other content providers' high costs and poor graphics capabilities, he set out to build a cybermall from scratch.

In 1996, using $9,000 in personal savings and loans from friends, Jones signed with an Internet service provider (ISP) and hired a design firm to create the African American Community Mall (www.aacmall.com). Today, AACMall hosts about 100 stores, which each pay $570 up front and $75 per year in fees.

Jones is among a growing number of entrepreneurs who have increased their sales by joining forces with others peddling complementary products in cybermalls. It is an ever-evolving industry that brings in about $40 million a year, according to IMALL Tipster, a newsletter that helps would-be mall owners set up shop or storeowners find the right cybermall.

Maddy Logan, the newsletter's publisher, explains that Internet mall owners are earning profits by charging storeowners flat fees ranging anywhere from $200 to $1,000, or taking in 15% of each store's gross annual sales.

According to Forrester Research in Cambridge, Massachusetts, online revenues hit $1.4 billion in 1996, and online transactions are projected to reach $3.3 billion by the year 2000. More than 10,000 new Web sites pop up every day.

You can create a regional or a general mall offering a host of products from books to flowers, or a cultural mall targeted to women, teens or a specific ethnic group. For example, the MelaNet African Marketplace (www.melanet.com) specializes in goods and services provided by African Americans. Most experts believe that the malls that survive are the ones that have a specific target market.

SETTING UP SHOP

You'll need to do the following to create an online mall:

* Lease space on an ISP's server. Whereas the average Web site may use 5-20MB of space, you may need more than that to set up your mall. Scout around to find the best rates. Web-hosting fees may range from $16 for 5MB to $250 for 100MB. Among the popular ISPs are Earthlink, AT&T Worldnet, MCI, AOL and Erol's. Be sure to get high-quality connectivity to the Internet, which means a T1 line or better.

* Get a domain name. Your address (URL) should be easy to type and easy to understand.

* Register with directories (like the Universal Black Pages (www.gatech. edu/bgsa/blackpages.html), as well as general search engines, such as Yahoo! (www.yahoo.com), Infoseek (www. infoseek.com) and AltaVista (www. altavista.digital.com).

IT'S NOT ENOUGH JUST TO RENT SPACE

Too often, companies spend thousands of dollars to launch their sites, only to sit back and wait for consumers to come to them, failing to develop an online promotions strategy.

To be successful, you have to advertise heavily and make it easy for customers to navigate and access stores in the mall. As a mall owner, your job is to generate traffic to the site and add value to your tenants. You can promote your tenant's services by joining news groups and mailing lists, arranging links with other sites, advertising in trade publications or newsletters, and distributing written literature about the mall's various storefronts.

Moreover, storefront owners may expect you to help them design and maintain their sites. You'll have to provide the necessary tools for processing orders and credit card information, and encrypting currency transactions.

To locate some malls, check out Universal Cybermall (www.umall. com), MarketPlaza (www.marketplaza.com) and Majon's Cybermall (www.majon.com). You can also be listed with existing malls for a small fee. For example, Internet Mall (www. internet-mall.com), with more than 25,000 stores, will charge you $48 a year to provide a link to your site and give a brief description of your business.