Mint site makes money
- By Elana Varon
- Aug 08, 1999
The U.S. Mint is making money.
The agency's online catalog, launched in April, has racked up nearly $7 million from sales of coins and coin jewelry, about 5 percent of its annual income from direct sales. With at least $5 saved in each transaction, every electronic sale means the Mint - which by law is self-supporting and turns any profits over to the Treasury - adds to its bottom line.
"All these products have a profit margin," said Mint director Philip Diehl. "The profit margin is larger when we sell it over the Web than through other market channels." Last year, the agency kicked $562 million into the Treasury's general fund.
The Mint is one of the few federal agencies that sell products to the public via the World Wide Web, including the U.S. Postal Service, which sells stamps and related wares, and several agencies that publish federal documents and databases.
"Basically, we want to be the best in the business in online catalogs, and we certainly want to lead the way in the federal government," said Chuck Payne, chief of the Mint's Electronic Products and Services Division, who designed the catalog. "If you want to sell to the public, you have to be as good as the other [commercial] Web sites."
The graphic catalog (www.usmint.gov/catalog) offers many features of user-friendly commercial retail sites. There are multiple links to descriptions of the Mint's products, a "shopping cart" for building orders and an illustrated guide to using the catalog. The link Is This Safe? leads to an explanation of the site's security features.
Similar to most online retailers, the Mint uses Secure Socket Layer from Netscape Communications Corp. to encrypt customers' credit card information. "The industry standard is SSL, so we wanted to use SSL," Payne said.
In the first half of July, the agency logged 31,912 orders. Weekly sales have grown to $1.2 million, up from $2,000 when the site was launched. The agency has added seven servers to its system to handle the traffic, for a total of nine, but even last week, a visitor encountered a brief bottleneck.
The agency makes more money online than the average catalog retailer, which, according to Catalog Age magazine, earns about 4 percent of its revenue this way. "For most people in the retail market, it's in the single digits," said Ron Parsons, director of public-sector alliances with CommerceNet, a consortium of vendors that is building a pilot system demonstrating interoperability of online federal procurement catalogs.
The Mint may be different from most catalog companies, Parsons said, because "the average person doesn't have a Mint catalog sitting in their basement" with a readily available 800 number.
Diehl said the catalog has generated new business from people drawn to the Mint's home page to learn more about the widely publicized dollar coin and quarters featuring each of the 50 states. "An online catalog for us is really part of building a community for coin collecting," he said. The catalog supplements information about coin history and production and a new page aimed at children.
The Mint is encouraging online sales by waiving shipping and handling charges for electronic orders and sending them more quickly. Some collectors who order by mail have griped about the free shipping and handling, but Internet-savvy patrons are enthusiastic about the service, said William Gibbs, news editor of Coin World, a trade newspaper.
"It's probably the wave of the future," said Steve Bobbitt, a spokesman for the American Numismatics Association, which promotes coin collecting. He noted that several Web sites conduct collectible coin auctions.