LAND OF
ODDS - The South's Most Unusual
Shop
Beads, Beading Supplies, Books
-- For the Bead and Jewelry Making Artist and Craftsperson
This has been a very difficult year, to say the least. Business continues to grow, but we lurched from one technical crisis to another. So what else is new?
Crash Crash Crash: Storesense to Prostores
The shopping cart system we were using died. The system was called StoreSense. It was 3 years old. The company that developed it had been purchased by E-BAY, and they upgraded the language the e-commerce system was written in -- an object oriented language. They had developed a "translator" program that translated the old code into the new code. But by March of 2006, this translator started to malfunction. The company that now owned StoreSense decided to stop upgrading this translator. And what we began seeing was that parts of the e-commerce system stopped functioning. While they continued to upgrade the new language their now-called ProStores was operating under, the translator could no longer recognize all the changes.
Our technicians warned us in March 2006 that we should consider making a change. We looked at various options, and decided to upgrade to the new ProStores system. It was sufficiently different than the old StoreSense, that we had to start from scratch -- re-doing the product database, re-writing the code for all the forms, and re-designing the .html pages with all new computer code.
We began to develop the new website at the end of March. At the end of April, the catalog stopped functioning. Some days our customers could at least see the price sheets on-line, but could not order on-line. Otherdays, they couldn't see any product information. We learned storesense mark-up language. Painful -- in my lifetime, I've learned Basic, Fortran, Cobal, Perl, Perl V, CGI, C+, html, you-name-it, -- my God, not another language........
I got us up and running again by June 7th. But we had to switch hosts and servers. Our search engine visibility started plummeting. Since we had gone through this before, I had a lot of tricks and strategies built in for bringing back that visibility. But it took to September 2006 to get the volume that we had the previous March.
On line credit card processing issues
As our catalog was crashing, we were told by VISA/MasterCard that we were no longer permitted to process credit cards the way we had been, for our on-line orders. Actually,we had received a letter from them 2 1/2 years earlier, telling us we needed to make various changes. Since making these changes would require major changes in our operations, web-site design and e-commerce strategy, we ignored them, waiting for some sterner ultimatum. In May 2006, we got it.
The major change is that now, when someone places their order on-line, their credit card information gets sent to their bank, rather than to us. This makes the transaction process more awkward, but protects the customer's credit card information from flying all over the internet. The new system severely restricts our ability to adjust invoices for discounts, partial shipments, out-of-stock items, adjust shipping rates, and offer credits for returns.
In the midst of re-writing our entire e-commerce system, I also had to negotiate credit card processing options, and figure out how these on-line processors (credit card gateways) worked. I ended up having to sign on for 3 different credit card processing systems, and cancel 2 of them. The first one worked fine with StoreSense, but not with ProStores. The second one was supposed to work with ProStores, but it didn't. The third one worked, but it was more limited in how I could do the various invoice adjustments we need to do.
We had to change some internal procedures for handling orders. We're left with one awkward situation that is most acute with our wholesale sales. Here the customer gets a 35% discount, but their card is first authorized for the full amount of the order before the discount, and we adjust the invoice with a credit. ProStores cannot easily handle a discount that is contingent on how much the customer spends, when you have more than one category of customer, and you have various contingencies which determine which discount the customer gets. When the final discounts are small, this isn't noticeable. But on large wholesale orders, we tie up a lot of the customers funds for a few days.
On June 7th, ProStores and the credit card processing worked. In mid-June, the credit card processing system -- QuickBooks -- crashed for a couple of days. Nothing we could do about it, but wait.
The new credit card system has more fraud protections installed on it. The billing address and zip code must match; the security code on the card must match. This results in some legitimate credit cards getting declined. I was told that the databases credit card processors use are often not up-to-date. There are delays in updating the database when people change addresses. Some banks do not update the database with customer address changes, even though they update their own internal databases. During this time, TJ Maxx, a national retail chain, had its customer database stolen, with credit card information. For some of these customers, their banks require all 9 digits in the zip code to have an approved match. Prostores doesn't allow for 9-digits, only 5 digits, in their zip code field. Since all credit card information now goes to the customer's bank, if when typing in their credit card information in the on-line form, they should make a typing mistake, it requires some effort and thinking on their part on how to re-submit the order and correct these typos. Some customers, I think, give up and go elsewhere. Banks have to pay fees for all the fraud protections, as these relate to their own customers. Some banks don't. For those customers, their cards get rejected automatically.
One day, because there had been a lot of declined credit cards that week, I decided to remove the fraud controls on the credit card processing system. Three orders came through that day that would have And Should Have been rejected. I reinstalled the fraud controls at the end of the day. There's a lot of fraudulent activity on-line, and we've had more than our fair share.
Email System
I set up a new email system with the ProStores host, as it was set up previously with StoreSense and Inetu. It worked fine for about 3 weeks. Then no emails were coming in.
I called ProStores, and they said the problem was with Bellsouth.net. I called Bellsouth.net, and they said the problem was with ProStores. I called ProStores back, and they gave me some ideas of different set-up strategies to try. They also told me that bellsouth.net (and comcast and aol) block a lot of the emails coming from ProStores. You see, ProStores is owned by Ebay, and Ebay is the :"starting point" or "hub" for emails getting sent to us. Ebay is a major, major source of spam that gets generated through the various companies that auction items on-line, or pretend to in order to spam, spam, spam.
I changed the email-set up. Land of Odds gets 129,000 emails an hour. Because of that, we have 3 spam filters -- 2 on-line, and one on our computers at Land of Odds. These work great, though they reject a lot of legitimate email. Because of SPAM, we don't have much of a choice, except to live with this inefficiency. In the process of re-setting up the email, I had to take off the spam filters, so I could test out whether the new set-up worked. And the floodgates were opened. It took hours and hours to sort through all this.
Automatically Generated Emails
Our order process automatically generates emails for Thank You For Your Order, and Here Is Your Lost Password, and the like. AOL in particular, but several other hosting sites like Earthlink, now block these emails. In the original conception of the order system, we had a logical and controlled closed system. But now, various aspects of this information system breakdown, and customers are no longer fully informed, or no longer nicely organized in our Stimulus-Response system.
Until now, we tried to discourage phone-in orders. The computer system deals with accounting, supplier, inventory, product updating and the like. Phone orders take information out of the computerized system. Also 80% of all order errors result from phone-in orders. But now, we are no longer discouraging this because the automated information systems no longer function -- particularly with the AOL customer.
UPS Shipping
The new Worldship Ver.9.0 required that we get a new computer to handle it.
UPS shipping rates have increased tremendously. We used to use a formula that was based on the idea that an acceptable shipping rate would be one that was up to 25% of the merchandise total. No more. For some rural areas, a 1 pound shipment now is $11.00 in shipping.
Other Things That Have Gone On This Past Year
Yahoo Group For Land of Odds and Our First Dibs Sales
This was the first year that we started running sales on-line. We set up an
opt-in email group under Yahoo. http://groups.yahoo.com/group/landofodds
Rather than email our customers without their permission, we rely on the opt-in
approach under Yahoo. I had done email campaigns in the past, and while very
successful, these also generated lots of complaints by people as "spam". The
Yahoo group has about 700 members as of 3/21/07.
At Be Dazzled, we run sales called "First Dibs". Here we put out merchandise that has just come in at near the wholesale price for 2 days, before we put it out. Our goal is to be able to buy in very large quantities to get incredible prices, and generate enough money from the sale to pay the bill. Then we still have a lot of merchandise to put out, that we normally wouldn't have. This works great in the store. It hasn't caught on very well on-line.
Streaming Video
I wanted to put all the classes that we teach at Be Dazzled (http://www.landofodds.com/beadschool ) online. Here a person could stream it, or download. They could order kits and books if they wanted. We started putting one video together. It's very involved. We have to upgrade the memory in our computers to handle the video-editing software.
Over the year, I've watched as similar video projects have been put on-line. I've scaled back my ideas here, to focus on one video, instead of many. What I've been seeing on-line is that similar craft/beading/jewelry making videos are being given away for free. It could be on YouTube, on a bead web-site, or in beading magazines. The question becomes, If a person can get a how-to video for free, how do you make money from a video operation? Basically people sell kits or something similar in conjunction with the free video.
I was hoping that we could make money from selling the videos, but I've had to re-think this idea. We'll see how our efforts evolve.
More gemstones; gemstones - the new glass
Our core business has always been glass beads. As currency exchange rates have become very lopsided NOT in the favor of the US dollar, the price of glass beads has skyrocketed. Most gemstone beads come from China and India, and these countries have held down the exchange rates, so that there's little fluctuation. So the prices of gemstones have moved much closer to the prices of European glass beads.
There have been many strides in technology which allows companies to create beads from a wider variety of raw materials, some 100% natural gemstones, but many not. The market has allowed many more non-natural "gemstones" created from glass to be labeled as "gemstone". People are much more willing to buy gemstones based on their "look", rather than buying just one or two specific gemstones, like "amethyst" or "lapis".
All these trends have made the gemstone market function much more like the glass market. With these trends, we've put a lot more emphasis on raising the gemstone profile in our operations. We've redesigned the gemstone pages on-line so that they are more user-friendly, and can accommodate more variety in this market. We began adding many more images, though we have a long way to go in this regard.
Price Increases
For 3 years now, the prices of anything from Europe, have been increasing about 25-30% each year, because of the exchange rates. For the past year, the price of gold, silver, nickel, copper and other metals have been skyrocketing. Maintaining 30,000 products on-line and about 100,000 products in the store is difficult enough. Raising all the prices, then raising them again and again -- Nightmare. In the store, the biggest issue is that each product has a label, and this label has to be re-done. It took 1 1/2 years, but we re-did virtually all the labels at least once. For sterling products, in particular, some labels have been re-done 3 or 4 times in the past year.
On-line, it's easy to adjust the prices by adjusting the database. I was worried at first that increasing prices, some by 45-50% at a time, would alienate too many customers. It seemed that the internet allowed them to find an alternative at a better price. But this hasn't happened. All businesses seem to have been forced to significantly raise their prices.
Quality Control Issues
Starting in the Fall 2006, I noticed that the products from many of our suppliers were dropping signficantly in quality. When confronted with rapidly increasing costs, manufacturers have two choices. They can either (1) raise their prices, or (2) keep the prices the same and change the production process associated with the product. Many went with option 2, and lower quality was the result in too many cases.
Even the largest manufacturers and distributors have embarked on these changes, often by going to a country with lower costs. But it amazes me that these large companies seem so unaware of quality issues. Inconsistent sizes/widths/hole openings. Thinner walled (thus more easily dentable) beads. Tools that break more easily. Things that are warped. Colors that fade/bleed/rub off. Shoddy packaging. Platings that don't cover the full piece.
We've all been concerned, and I have had to register
my concerns much more often and more forceably than any other time I've been
in business. I guess the cost of all the raw materials has skyrocketed so much,
that more manufacturers are cutting corners, rather than raise their prices
to a level where they can maintain the same quality.
We have had it very good for a long period of time -- a rapidly
expanding selection of beads and findings, and few increases in price. About
3 years ago, the dollar starting losing value against the Euro, and Czech glass
starting increasing about 25-30% a year for 2 or so years. Now these prices have
plateaued again -- except for some slight increases due to the increased shipping
costs. About 1 1/2 years ago, the prices of silver and gold started skyrocketing.
Lately as these stay at high levels, the prices of nickel and copper are also
shooting up. The prices for anything with gold in it -- platings that use gold
for the coloration, gold filled, vermeil, 14KT, red, yellow and pink items --
have increased an average of about 40%. Sterling items have increased between
15% to 80%, and on average about 25-30%. For a lot of sterling pieces, the ratio
of the cost of the raw material relative to the full manufacturing cost of any
particular item varies a lot. Because of the increase in nickel prices, and continued
high gold prices, all the plated findings are increasing at about 25-30% annual
rate. Nickel is in a lot of things, including sterling silver (it's part of the
alloy).
In one of our classes, I give a talk about metals and what happens to them over time. I point out that 14KT gold is very soft, and the beads tend to dent. I suggest if using 14KT beads, that they buy heavy-walled or extra-heavy-walled beads, to minimize this problem of denting. When I get to sterling silver, I talk about how sterling softens at body temperature. I used to say that people only had to worry about the integrity of the clasps. I would say that the beads are heavy-walled enough so that you don't have to worry about their quality. This fall, however, I started saying that they should start thinking about sterling silver bead quality issues, as well. Now I see suppliers providing sterling beads made in China or India -- ones that they used to get from Thailand or Israel. One way to keep the cost down on sterling silver beads is to make the walls of the beads thinner. I'm wondering if this is happening already.
This past year, and especially this fall, I have had to confront manufacturers about serious safety issues in how they have changed the way the assemble tools, bad to aweful quality in their platings, design changes in clasps that make them inoperable or too flimsy, too many coloration problems in glass and seedbeads, new gemstone dyes which bleed off where previously this was not a problem, "grading" inflation on the quality of freshwater pearls, more brittle hard wires, "size deflation" in wire gauges where something that was 20-gauge is now really 21- or 22- gauge, and the like.
Traditionally, for the most part, I have tried to stick with higher quality pieces -- things I would use myself in my own jewelry designs. This wasn't a big problem, from a business standpoint, because the prices of these items weren't that much greater than the economy pieces. But in the last couple of years, many of these high quality pieces have become too expensive for my customers. I started, and will continue this strategy over time, to now offer two levels of quality for the various pieces -- economy and high quality, to give my customers more choice price-wise.
This strategy only works, however, if the manufacturers maintain their own quality standards. This isn't necessarily happening.
Adding more "Economy"
I've always sold quality pieces at good value. That's the basis of our business. The prices have been so steep over the past few years, that I have begun carrying what is called "economy" pieces. This has been a big change for me in that I would be carrying items that I would not personally use. I hadn't had to do this before.
The prices on a lot of sterling, gold-filled and 14KT gold items have increased so much, that I don't think people can afford or justify them anymore.
The economy pieces are less durable. The metals are more brittle. If there
is a moving part, it is less functional. But the prices are a lot cheaper.
Supplier Turn-Around and Internet Presence
There are only a couple of our suppliers that have not yet ventured on-line. But even with these new on-line presences, our suppliers are lost in space.
While a few have successfully interpreted their operations onto the internet, most have created unworkable websites. It's clear that none have a clue about how to set up a workable, easy-to-use website, that can function with a large number of products-for-sale.
"Bells and whistles". You can sell a lot of bells and whistles to these companies. And they like Flash, over function. They see their websites as a one-time big effort at design and organization.
"Navigation" is a foreign concept.
"Updating" styles, colors,
prices, product availability and the like -- What's that?
"Interfacing with the retail customer" -- now the "message" is coming from
yet an additional place, one not well understood.
"Search" routines are archaic and cumbersome. You have to use one of their
old paper catalogs to figure out how to search for an item in their on-line
website.
The typical interaction between us and them has become something like this:
-
Use their website to look up prices and styles and minimum quantities
-
Email or fax them an order
- Hope for the best -- hope that everything you
have ordered is in fact, truly available, and at the listed price
Most of our suppliers, at this point, have dropped their paper catalogs partially or entirely.
Be Dazzled Beads vs. Land of Odds
We have always managed both entities as separate businesses. Both have very different cost structures, supply very different markets, and have different kinds of competitive markets to adjust to. Historically, this has been easy to do. Very few local customers saw Land of Odds as a viable option for securing their beads and jewelry findings.
This past year, we've had more and more Be Dazzled customers order on-line, and pick up their orders at Be Dazzled. In fact, we've added a "shipping" option in the Land of Odds checkout process to make it easier for them to do this. They want to get the best price and they don't want to spend a lot of time in the store searching for things.
Overall, the Land of Odds prices are lower, but there are minimum package sizes, and it's more difficult to get any additional discounts. With Land of Odds, there is a bit of delay from the time you place the order to the time it is ready to be picked up. At Be Dazzled, the prices overall are higher, but there are no minimums, it easy to get additional discounts, the customer gets to feel and see the merchandise, and there are staff to provide a lot of assistance.
The boundaries between the two businesses are definitely starting to blur a bit. This phenomenon will definitely create some mangement issues going forward.
From time to time, we have decided to relate and share some of our e-commerce experiences with our customers and friends. Doing business on the Internet is a new thing, a wonderful thing and something not quite the same as running a regular store, and not quite the same as operating a mail-order print catalog business. The Internet is very democratic, and we feel our on-line store should mirror some of the aspects of Internet culture. The Internet is very "information-centered" as well, and our store should also be. We want to chronicle our successes, trials and tribulations.
Some of our goals have changed, since we became a primarily-on-line enterprise, and closed our main store.
Our goals for our catalog include:
Some Comparative Statistics
| On April 29, 2003 | On May 3, 2003 | On June 29, 2003 | On Nov 3, 2003 | On Nov 3, 2004 | On 8/17/2005 | On 3/2/2006 | On 3/21/2007 | ||
| # of unique visitors per day | 1950 | 300 | 1250 | 2450 | 3800 | 5000 | 5000 | 6787 | |
| # of active links that come up on Google | 1550 | 40 | 2190 | 3290 | 7900 | 13200 | 53,200 | 18,100 | |
| # of active links that come up on Yahoo | 28,500 | ||||||||
| % of visits that result in orders | .66 | .77 | .77 | .77 | .78 | .78 | 1.42 | 1.30% | |
| average time spend in catalog | 7 minutes | 10 minutes | 28 minutes | 28 minutes | 32 minutes | 32 minutes | 32 minutes | 10 minutes | |
| google ranking on the keyword "beading supplies" | 18 | indeterminate | 8 | 3 | 4 | 3 | 2 | 6 | |
| yahoo ranking on the keyword "beading supplies" | 28 | ||||||||
| google ranking on the keyword "bead supplies" | 8 | 5 | 3 | 7 | |||||
| yahoo ranking on the keyword "bead supplies" | not ranked | ||||||||
| google ranking on the keyword "beads" | not ranked | not ranked | not ranked | not ranked | not ranked | not ranked | 48 | not ranked | |
| yahoo ranking on the keyword "beads" | not ranked | ||||||||
| google ranking on the keyword "clasps" | 4 | 2 | 3 | 4 | |||||
| yahoo ranking on the keyword "clasps" | 14 | ||||||||
| google ranking on the keyword "jewelry findings" | 6 | 4 | 4 | 4 | |||||
| yahoo ranking on the keyword "jewelry findings" | not ranked | ||||||||
| google ranking on the keyword "bead cord" | 4 | ||||||||
| yahoo ranking on the keyword "bead cord" | 6 | ||||||||
| # of sites on google search engine that come up with keyword "beads" (was only 250,000 when we began the catalog in 1996) |
9.2 million | 5.4 million | 48.9 million | 33.9million | |||||
| # of sites on yahoo search engine that come up with keyword "beads" | 36.1 million | ||||||||
| average order amount | $47.50 | no average computed | $67.00 | $71.00 | $75.00 | $75.00 | $55.72 | $67.83 | |
| orders per day | 12 | 0 | 8 | 12 | 12 | 14 | 18 | 18 | |
| average items per order | 15 | 0 | not determined | 10 | 10 | 10 | 10 | 10 | |
proportion of orders by returning customers
|
not collected | not collected | not collected | not collected | 24% | 28% | 33% | 37% | |
| Ranking.com Rank among all beading sites |
8 | 12 | 4 | ||||||
| Ranking.com Rank among all web sites |
283,121 | 361,205 | 60,755 | ||||||
| Trustgauge.com Level of Trust |
4 out of 10 | 6 out of 10 | 7 out of 10 | ||||||
| Linkstoyou.com Links pointing to us |
1,500 | 4,784 | 2,297 | ||||||
| Linkstoyou.com Link Popularity |
47,367 | 69.650 |
Thanks for being there for us and with us,
Warren and James