Party America Online

Sep 22, 2003
George Anderson

By George Anderson

The party and holiday goods retailer, Party America, was cautious when it came to doing business on the Internet.

“I didn’t want to do it three or four years ago because of profitability issues,” said Marty Allen, president and ceo of Pa Acquisition Corp., parent of Party America told the
East Bay Business Times. “I think it’s been proven consumers will not go there to buy toothpaste, so I’m not sure they’ll buy party favors online, either.”

Mr. Allen and Party America chose to test the waters by setting up shop on a site operated by Yahoo. The company handled development of the site in-house and spent only $3,000
to get it up and running, according to Mr. Allen.

Party America chose to focus strictly on Halloween costumes for its initial venture online. “We decided costumes would be clean and easy to ship, since they all come in the same-sized
boxes. And because people are spending about $30 or $40 per order, spending $3 or $4 to ship them makes economic sense.”

The retailer is pleased with consumer acceptance with it selling approximately 15 costumes a day.

“I told my employees I didn’t care if we sold anything, I just wanted to learn from this experience. But it looks like sales will be just fine,” said Mr. Allen.

Moderator’s Comment: Are there lessons other retailers looking to go online can learn from Party America’s experience?

Keven Wilder of McMillan-Doolittle told the East Bay Business Times, “Holding back probably turned out to be a good thing for Party America. They
are very smart to limit the items being sold. Since most (online) customers are likely only to give you one chance, it’s really important for a retailer to deliver on their promises
the first time out.”
Anderson – Moderator

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