Dot-coms may be dead, but small businesses are still using the Internet to extend their reach

e-commerce hasn’t died. It’s just gone underground.

At a time when acres of glassed-in offices hold the ghosts of failed dot-coms, one of
New England’s more successful online businesses operates from the musty basement
of a West Newton bicycle shop.

By Ross Kerber, Globe Staff

Downstairs at Harris Cyclery sits the computer workstation of Sheldon Brown, a
bearded veteran mechanic who has generated an international following for the shop’s
Web site. It also brings in a third of the shop’s sales.

Harris Cyclery avoids competing with bigger online bicycle retailers by focusing on
hard-to-find replacement parts like the fixed-gear wheels favored by bike messengers.
Brown also dispenses plenty of free advice, both over the Web and with direct e-mails.
Larger online bike retailers ”will have the quarter-pounder with cheese,” Brown said.
”We’ll have the replacement hamburger patties and a different kind of cheese.”

Shop owners Aaron Harris and his son Jon say the Web site draws enough new
business to keep a staff of five mechanics year-round, a rarity in the seasonal industry.
Aaron Harris says he’s surprised how many customers arrive from elsewhere in
Massachusetts, lured by the hard-to-find parts posted on its site and the promise of
personal service.

”It amazes me how many people in Cambridge or Arlington come in,” he said. ”They
never would have known we were here, but they use the Web.”

Harris Cyclery might seem a quaint exception to the diminished enthusiasm for online
retailing, following the collapse of well-known dot-coms from HomeRuns to pets.com.
But its experience is shared by thousands of other small retailers who are using the
Web to carve out a niche, extend their reach, and prove their expertise to devoted
customers.

Examples abound. In March, Ron Davis, who owns The Shoe Horn, a chain of apparel
stores in Newton, Natick, and Acton, began selling dyed wedding shoes online, from a
Web site he spent $10,000 to develop.

Davis says he’s already taken in more than that amount in sales to brides and others
who need shoes for formal occasions.

”It’s nice to wake up and find seven or eight new orders in your in-box,” Davis said. The
trick is specialization. ”You can’t be selling something that they [customers] can go
down the block and look at” at another store, he said.

Carrie Johnson, an analyst at Forrester Research in Cambridge, describes the process
as ”the fragmentation of the Web.”

”It’s getting easier for the consumer to find a lot of unique products, the
elephant-shaped ashtrays they’ve been looking for their whole life,” she said.

Johnson noted two services that have accelerated the process: eBay, which allows
thousands of small merchants to auction products to a huge audience, and Yahoo
Inc.’s ”Yahoo Small Business” services, used by about 17,000 retailers, many of whom
have not sold online in the past.

One Yahoo user is Tom Bednark, a Centerville cabinetmaker who started making
wooden baseball bats several years ago and now owns Barnstable Bat Co. His sales
are up about 35 percent since he created a Web site two years ago, he said. Last
year, he began selling via the Web as well. His upfront cost was about $5,000 to
create his Web site and to pay for better placements on Yahoo listing.

Web sales now account for 20 percent of the 12,000 bats he sells each year, Bednark
said, including many overseas deals.

”The Slovenian national team wouldn’t have heard of us without the Web,” he said.

Such merchants have found ways to differentiate their products and services to avoid
competing chiefly on price, said Matthew Malloy, director at Web-hosting company
Trellix Corp. in Concord.

”Not everybody’s going to be an Amazon,” he said, referring to the giant online
discount bookseller.

Not every small business can do as much with a Web site, Malloy added.

”Some things are by definition in the physical world,” he said, such as a
home-inspection business. But Malloy thinks at least 10 percent of the 5.7 million
small businesses in the United States (businesses with fewer than 100 employees)
have the potential to increase sales significantly online. Of those, only about half are
even involved in e-commerce today, Malloy said, and many do little more than post
their hours and addresses online.

Executives at National Small Business United, a Washington trade group, say a big
concern of mom-and-pop operations is the cost of new technology. A survey done by
the group 18 months ago found cost was the biggest challenge in dealing with new
technology, cited by 58 percent of the 557 companies who responded.

Of those surveyed, 53 percent had a Web page, up from 32 percent in 1999, and 85
percent indicated they used the Internet at least for e-mail or browsing for deals. A
more recent survey, done by the National Federation of Independent Business in June
2001, found 45 percent of 749 respondents expected to have a Web site within the
next year. Of those that didn’t expect to create one, 77 percent said their products or
services didn’t lend themselves to sale on the Internet.

William Dennis, a researcher who conducted the federation’s survey, said he expects
small businesses to embrace the Web gradually.

”It’s like the adoption of personal computers,” Dennis said. ”In 1980, hardly any
businesses had them. Now it’s hard to find one without them. It’s evolutionary, a lot of
trial and error.”

Harris Cyclery’s experience with the Web shows how one shop stumbled into its niche
through the interests – some might say obsessions – of a key employee. A longtime
mechanic at various shops around Boston and Cambridge, Brown had worked at
Harris’ shop about two years when, in 1995, he suggested spending $30 a month to
create a modest Web page with the shop’s address and hours.

Brown had already taught himself HTML, the language for creating Web pages, and
wrote the page himself. Meanwhile, he had also become involved in e-mail discussion
groups about bike mechanics. Soon readers started calling Brown at the shop for
advice.

Some asked to order parts, too, a business the shop wasn’t eager for at first.

”We were thinking this was really just an informational thing,” Harris said. ”But I
wouldn’t turn down business for anything.”

Today http://www.harriscyclery.com brings browsers to hundreds of pages created by
Brown. Some pages list prices and ordering details for the shop’s bicycles and
accessories. Others contain technical explanations by Brown, on topics like
maintaining freewheels or adjusting cantilever brakes. He also describes each of the
30 or so bikes that clutter his home.

These pages, in turn, generate about 350 e-mail messages a day to Brown seeking
more advice. One measure of that interest is how widely the site has been linked, from
the San Antonio Wheelmen to the Danish pedal-

kraft site.

The line between the shop’s site and Brown’s own hobbyist efforts is hazy and
informal. The address http://www.harriscyclery.com works as a pointer to a section of
Brown’s own site, http://www.sheldon

brown.com, hosted by an outside provider. In all, sheldonbrown

.com includes 217 megabytes of text, photos and diagrams, of which material for
harriscyclery

.com accounts for 28 megabytes. Aaron Harris says he pays all the fees to host the
site. Inventory costs have also risen, by about a third, to keep pace with the volume of
orders coming in online.

”What Sheldon has done, we’ve had to back it up,” said Harris, who also credits other
employees’ help with the enterprise.

Brown and Harris boast their operation beyond the Web site is low-tech, and therefore
low-cost. They’re still exploring setting up online shopping carts; the majority of orders
from Web users arrive by phone or fax. About 20 e-mails a day come in with orders
and credit-card numbers, which are cut-and-pasted into a Word file. ”Inventory control”
means turning over empty boxes to indicate it’s time to order more goods.

Partly for these reasons Brown and Harris resist the idea the shop is a ”Web
business.” Brown’s business card lists him as ”Parts Manager, Webmaster, Tech
Guru.”

”We’ve got more of a service orientation in our business,” Brown said. Whatever the
greater goal is, ”moving more widgets isn’t necessarily it,” he said.

Who’s the competition? Brown says he’s not concerned with the sites of most other
bike stores. The site that comes closest, he says, is run by Rivendell Bicycle Works,
in Walnut Creek, Calif., which sells goods like odd-sized tires from some of the same
manufacturers. It’s hardly a fierce rivalry, however, since Harris Cyclery sells
Rivendell’s frames, while Rivendell owner Grant Petersen recently interviewed Sheldon
Brown at length for a small magazine he publishes.

In his introduction, Petersen wrote of Brown, ”If there is somebody with more all-around
bicycle knowledge – and by that I mean knowledge and first-hand experience with
anything from Sturmey-Archer to The Weirdest of the Modern Weird – let him come
forth. I say there is none.”

Harris says the bicycle expertise is what matters.

”We have people who understand the Net. But more importantly, we have people who
know the product,” Harris said.

Ross Kerber can be reached at [email protected].

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