Mint outsources its e-business

Mint outsources its e-business

Everybody wants money, and Web site must deal with runaway demand

By William Jackson

GCN Staff

The Mint makes lots of money. It expects to strike 29 billion coins this year'the kind you carry in your pocket'and sell another $1 billion worth of collectible and investment-quality coins.

The biggest seller right now is quarters'25-cent pieces being minted in special editions for each of the 50 states over a 10-year period.

The Mint's e-commerce Web site, which is expected to generate $125 million in sales this year, gets heavy usage spikes whenever a new state quarter is introduced.

'This program has been more successful than we ever imagined,' said Jackie Fletcher, the Mint's chief information officer. The quarters cost only 5 cents to make, so the Mint pockets 20 cents for each one. Fletcher said the Mint expects to make 6 billion quarters this year, three times the usual annual run.

'People really want to buy them in bulk,' she said. 'We don't sell them by the bag except on the Web.' Bags of 100 and 1,000 Maryland quarters sold out within two hours of their introduction on April 3.

Online sales at began in April of last year and will generate $125 million this year. But the unexpected demand for quarters nearly crippled the electronic-commerce site at one point.

'People couldn't get on,' Fletcher said. 'It took our site to its knees.'

The Mint recently outsourced its Web commerce to Qwest Communications International Inc. of Denver. The site previously was hosted by the UUNet service of MCI WorldCom Inc.

Speed and security

The Mint has 'more bandwidth than you can shake a stick at,' Qwest account manager Bill Hoffman said. It is 'on a par with the leading e-commerce sites in the United States,' and its physical and data security is 'right up there with Fort Knox.'

The Mint implemented an enterprise resource planning system from PeopleSoft Inc. of Pleasanton, Calif., in late 1998 in preparation for online sales. The ERP system consolidated into a single back-office system about 30 standalone applications for finance, manufacturing, sales and distribution.

A mail and catalog system from Smith-Gardner Associates Inc. of Delray Beach, Fla., feeds sales information from the site to the PeopleSoft general ledger software. Mellon Bank processes the credit card purchases.

'The Web site saves us up to $5 on each transaction,' Fletcher said. That's why the Mint offers bags of quarters at their face value of $25 for 100 or $250 for 1,000 with no shipping charge.

'Why would somebody buy a bag of quarters? I'm not sure,' Fletcher said, theorizing that collectors are not content to get them from banks or as change at stores.

Each state quarter is sold in bulk on the Web only at the time of its introduction.

The sharp spikes in demand at those times were more than the UUNet system could handle.

'I think we grew too quickly for UUNet,' Fletcher said. 'We needed a more robust infrastructure.'

'The traditional formula just didn't work,' said James F.X. Payne, Qwest's senior vice president for government markets.

Under the usual e-commerce formula, enough bandwidth must be planned in advance to meet estimated peak demand.

If demand exceeds the prediction, 'that's when systems traditionally crash,' Payne said.

When the Maryland quarter went on sale after Qwest had taken over the site, the Mint's 10-million-coin allotment sold out in two hours, and orders for another 2.8 million were processed.

About $2.7 million worth of orders came in during one hour.

The site is mirrored on about 30 servers at each of two locations in Sterling, Va., and Burbank, Calif.

Traffic is balanced between them, but each is capable of handling the whole load if the other goes down.

Servers connect directly to the Qwest backbone through 12000 series gigabit switch routers from Cisco Systems Inc. of San Jose, Calif., for virtually unlimited bandwidth.

'We tested them through 50 Mbps on both centers,' taking down two-thirds of the infrastructure, Hoffman said, and each center could still handle the traffic.

The Mint servers are set to handle 100 Mbps, but can go up to 1 Gbps if needed, he said. The servers are in a caged area inside secured facilities, Payne said. Data security for transactions is provided by Secure Sockets Layer connections, which encrypt transmissions from most browsers.

Although quarters are the big sellers, the Mint also is pushing the golden dollar, which made its debut in January. Unlike the quarters, the dollar sells at a premium: $35 for a roll of 25, and $2,190 for a bag of 2,000. About a billion coins have been distributed, but few have shown up in circulation.

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