June 17, 2008, 12:00 AM

Reliability and scalability are key to third-party platforms, retailer says

Third-party platforms offer a fast way for new businesses to get their brands out in the marketplace, but they must be watched carefully, said OneWayFurniture.com CEO Mitch Lieberman last week at the Internet Retailer Conference & Exhibition 2008.

Katie Evans

Managing Editor, International Research

One Way Furniture Inc. CEO Mitch Lieberman began his business on what he calls a “paper platform” with binders holding printouts of e-mailed orders.

The business made the leap from hard copy to electronic as an on online store on the Yahoo Merchant Solutions e-commerce platform, also known as Yahoo Store, he told workshop attendees June 10 at the Internet Retailer Conference & Exhibition in Chicago. On the platform, the online furniture store, OneWayFurniture.com, has grown to $20.1 million in revenue with a 17% growth in 2007 and is No. 320 in the Internet Retailer Top 500 Guide.

While retailers struggle to weight the strengths and weaknesses of third-party platforms, those platforms offer a fast way for entrepreneurs to get a business running and their name out in the marketplace, he told attendees during a workshop session, “How to Manage Third-Party Store Platform Relationships.”

Lieberman recommended thoroughly researching options before making a decision. “Make a list of the most reliable and scalable platforms, do research and ask for the best price – never feel intimidated,” said Lieberman. “While third-party platforms can be valuable, you still need to watch over your business carefully.”

For example, Lieberman’s and other Yahoo-hosted sites faced challenges the Monday after Thanksgiving, one of the busiest online shopping days of the year, when Yahoo database servers couldn’t display contents in shopping carts during the day’s traffic peak traffic, preventing customers from making purchases.

Yahoo responded during the ensuing days with a mixture of technical and customer relations moves. It apologized for the impact the service interruption had on its retailers’ business and said it would waive its November 2007 sales transaction fees. Yahoo charges per-transaction fees of 0.75% or 1% of sales, plus a monthly fee of either $99.95 or $299.95, based on sales volume.

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