The Role of E-Commerce in the Pleasure Product Sector

Q. Boyer

One of the more obvious impacts of the Internet is the way in which it globalized so many things that used to be thought of as entirely local phenomenon. In the old days, if an American wanted to buy a sex toy, and his or her community was one of the thousands across the country that didn’t have a local sex shop or adult bookstore, that person was in for some driving, or had to somehow get their hands on one of the mail-order catalogs operated by the intrepid few who had established adult businesses that were willing to cross state lines in the process of fulfilling orders.

E-commerce has changed all that, making adult products and content available to communities all over the country (and around the world, for that matter), almost regardless of the nature of their local community. Now, even folks residing in the middle of the Bible Belt can log on and shop for products that local pastors and social conservatives would rather not think about. As such, e-commerce has enabled people to explore their sexuality in ways that have were previously unavailable to them without first making a physical journey that facilitated their erotic one.

Before integrating our inventory into our e-commerce solution, we used to have backorders of a quantity that averaged two to three days’ worth of sales. -Tom Nardone, president of PriveCo

In addition to breaking down geographic barriers and opening new markets to pleasure product vendors and distributors, e-commerce also fostered a revolution in customer service, as it enabled companies to fulfill orders faster than ever before, and eased the process of organizing and maintaining inventory, making companies far more efficient than they were in the pre-Internet era. As Tom Nardone, president of PriveCo, puts it, “E-commerce has improved our customer service to levels that would never have been attainable without it.”

“Before integrating our inventory into our e-commerce solution, we used to have backorders of a quantity that averaged two to three days’ worth of sales,” Nardone told XBIZ. “As these backorders aged, they became more and more problematic and required more and more employee time. Now that we don’t sell what we don’t have in stock, we have essentially zero backorders and everyone’s orders arrive incredibly quickly. It has been a quantum leap forward in customer service.”

Another significant advantage of e-commerce is that online shopping mechanisms offer consumers a variety of ways to find the products that are right for them, and to conduct comparisons quickly with no real effort beyond browsing a site and checking off various options in dialog boxes. Unfortunately, some vendors and site operators don’t take full advantage of the flexibility and scope of e-commerce functions, noted Dave Levine, owner of SexToy.com and its parent company, CNV.

“We have the largest selection of adult products with the ability to refine by attributes,” Levine said of his company’s online shopping cart and e-commerce systems. “Most of our competitors don’t allow customers to refine products by size, features, functions, etc. And those that do have far fewer items than we do.”

Levine also touted the efficacy of “suggestion engines” as marketing devices — those little prompts noting that people who bought Item A also bought items B and C. These suggestions, particularly when driven by an engine that intelligently associates products by genre and not just as a function of being purchased by the same user, save consumers a lot of time and effort that they might otherwise put into seeking out similar products in your catalog. They also provide the seller with an outstanding marketing tool, and a natural opportunity to promote popular items in a way that seems logical and helpful, rather than as an aggressive up-sell approach.

When establishing an e-commerce system, some companies opt to design their own, while others rely on third-party software vendors who offer off-the-shelf e-commerce solutions. The right choice really depends on the nature of your company, and whether you are staffed properly to develop e-commerce systems of your own.

Nardone told XBIZ that most of the e-commerce systems and programs used by PriveCo are third-party, and that his company does custom work of its own only “when we absolutely need it and don’t anticipate anyone will introduce” the functionality PriveCo is looking for. Nardone said that PriveCo is very happy with their current solution, as it is “straightforward, customizable, and compatible with a number of other services.”

By contrast, Levine said that all of CNV’s e-commerce systems are built in-house, which stands to reason for a company that developed the adult Internet’s first affiliate advertising program back in 1996. The “DIY” approach is in part a function of the company’s culture and identity; they have always created their own solutions, and doing so has enabled them to craft the precise technologies and systems that they envisioned and desired. Neither the PriveCo nor the CNV approach is “wrong;” the correct approach for your company depends entirely on its individual nature and composition. If you are staffed with strong programmers and developers, then an in-house approach could make the most sense for you. If not, reaching for an effective off-the-shelf e-commerce solution is the way to go.

Once you have established an e-commerce solution, another question you need to confront is whether you are going to offer a “white label” version of your online catalog for use by affiliates and other third-parties — and again, the answer depends on what sort of company you run.

Nardone says that PriveCo eschews white-labeling, in large part because “we feel that white-labeling will dilute our message and personality.” For brand-conscious companies, this is a very valid concern. Releasing control of your brand and distributing product through third-party sites can lead to accidentally associating with people who promote their sites in unscrupulous ways, and their overly-aggressive marketing can tarnish the image of the company that provided the white label, as well.

On the other hand, white labels can massively expand one’s reach in the market, as has been the case for CNV. Levine calls his company’s white labels the “most customizable white-label system for adult products” in existence, and notes that sales made through white labels are “the biggest part of our business.”

When it comes to future e-commerce plans, the individual character of your business will again play a defining role. In the case of PriveCo, no major overhauls or changes to their current e-commerce system are in the works at the moment, because Nardone says he’s happy with the system. “We will continue to use the tools we have to improve our business,” Nardone told XBIZ.

By contrast, Levine reports that CNV is working on “a major upgrade from scratch” of its affiliate program that enables “greater customization of products and content.”

These different orientations toward the market likely stem from the very different identity of each company; born online in the first place, the Internet’s fast pace of development is simply part of the company’s DNA — and this extends down into the physical structure and organization of the company itself.

“Everyone works from home with meetings via Google Hangouts,” Levine said of CNV. “We are truly an Internet-based company with no inventory, nor corporate office.”