Getting an error package ..... does not exist

Hi,
I am trying to learn Java through Sams Teach Yourself Java 6. In the book it asked me to create a directory called
c:\dev\java\org\cadenhead\ecommerce
I have added the c:\dev\java into the CLASSPATH variable in Vista
The program I am trying to compile is in another directory called c:\JavaWrk
I am getting an error when I compile the code, the first error is
GiftShop.java:1: package org.cadenhead does not exist
import org.cadenhead.ecommerce;
^
The rest of the error is because the program is trying to invoke methods that are in the class file located in the package subdirectory.
Here is the program I am trying to compile
import org.cadenhead.ecommerce;
public class GiftShop {
     public static void main(String[] args) {
          Storefront store = new Storefront();
          store.addItem("C01", "MUG", "9.99", "150");
          store.addItem("C02", "LG MUG", "12.99", "82");
          store.addItem("C03", "MOUSEPAD", "10.49", "800");
          store.addItem("C04", "T SHIRT", "16.99", "90");
          store.sort();
          for (int i = 0; i < store.getSize(); i++) {
               Item show = (Item)store.getItem(i);
               System.out.println("\nItem ID:" + show.getId() +
                    "\nName:" + show.getName() +
                    "\nRetail Price: $" + show.getRetail() +
                    "\nPrice: $" + show.getPrice() +
                    "\nQuantity: " + show.getQuantity());
I also tried compiling the file using the command "javac -cp c:\dev\java GiftShop.java" adn still gets the error.
I did not want to leave the chapter without resolving the issue. Any help will be much appreciated.

ok baftos
I tried running the program using "java -cp c:\dev\java GiftShop" and getting an error.
Exception in thread "main" java.lang.NoClassDefFoundError: GiftShop
Caused by: java.lang.ClassNotFoundException: GiftShop
at java.net.URLClassLoader$1.run(Unknown Source)
at java.security.AccessController.doPrivileged(Native Method)
at java.net.URLClassLoader.findClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at sun.misc.Launcher$AppClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClass(Unknown Source)
at java.lang.ClassLoader.loadClassInternal(Unknown Source)
Could not find the main class: GiftShop. Program will exit.
both .java and .class files are in the same directory.
Apologies for all this beginner questions, I only started encountering this errors when I started to learn how to create package.

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