Table: Mini-Dots Do It Right

Small businesses use far different strategies from the venture-funded dot-coms. That has helped them thrive on the Web, where their bigger forebears went bust. Here's how:

STAY STINGY:

Small fry know how to use the Web to stretch a buck. Carrie Hardy, founder of scrapbook supplier Scrappin' Happy, frequently e-mails offers to her 1,100 customers--at zero cost--instead of taking out $80 ads in trade magazines. She says her business, which grossed $52,000 last year, will grow 25% this year.

FOCUS FOCUS FOCUS:

Thanks to the Web's farflung reach, merchants can specialize in narrow niches that otherwise might be too small. E-tailer Waggin' Tails zeroed in on super-premium pet kibble. With margins averaging 30%--vs. 10% for mass-market pet supplies--Waggin' Tails is turning a small profit on less than $5 million in sales.

TAP INTO NEW MARKETING CHANNELS:

Little guys use the Net's unique features--from auctions to newsgroups--to reach new customers. Trudy Schnell, owner of collectible store Kringle Kottage, had a Santa Claus cookie jar on her store's shelf for four years. When she listed it on eBay, it sold for $162. Now, some 30% of her $100,000 in annual sales comes from eBay, about half her online business.

USE THE BUDDY SYSTEM:

Small players can join online programs that help them operate like larger rivals. Bookseller Kerry Slattery hawks books online that she doesn't carry in her Los Angeles store, Skylight Books. How? By using BookSense.com, a collaborative selling program for independent stores, which she partly credits for a 15% jump in 2000 sales.

PUMP UP THE SERVICE:

Small Web businesses take that friendly corner-store service online. When a customer of Garage-Toys.com complained that a $42.96 device that helps drivers park cars in tight spaces had been $3.01 cheaper on the site the week before, founder Paul Hinrichs personally whacked the price--and made the sale.

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