LAND OF
ODDS - Jewelry Design Center
Beads, Jewelry, Gifts,
Collectibles, Music, Posters, Books, Gourmet
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:
The past 14 months have been very difficult indeed, and while the tremendous increase in internet sales have been very exciting, they have caused major disruptions in both the technical, as well as the administrative, underpinnings of our catalog operation. The major events include:
1) From June of 1999, it took 2 months to find a new host, and 3 months to get the catalog up an running again. This involved re-editing every single page to conform to the requirements of the new host.
2) And then the on-line shopping cart crashed again. The volume was too great for the shopping cart program I had personally taught myself to write and implement. Crisis! I signed up for a new shopping cart system. I had to re-edit every single page again to conform to the new shopping cart requirement. That was 15,000 web-pages. I had to install new security features. I had to rewrite old cgi-programs -- many I deleted rather than struggle to rewrite them. Many web-pages were, and still are, "band-aid-ed" together -- they conform to the new shopping cart requirements, but need much page editing.
3) At the same time, at the end of September 1999, we closed our downtown store. We could no longer justify paying $9,000/month rent, when our smaller store Be Dazzled ($750/month rent) was doing well, and the internet seemed so promising.
4) Even with the catalog off-line for most of 5 months, our volume still remained steady at 3-5 orders per day. People could still view most of the catalog. They couldn't maneuver through it very easily, especially during the earlier stages of re-editing -- each time we re-edited. People could not access the on-line shopping cart. People emailed or phoned in their orders.
5) We decided to cut out almost all the non-bead related items. Without the downtown store to move the wide mix of merchandise, it no longer made any sense to continue with these products on-line.
6) We got our shopping cart up and running again in November just before Thanksgiving. Whomp! The orders were significantly more in number, as well as more items per order, than before the previous June. And they didn't stop. During the six weeks running up to Christmas, the order volume increased 4 times from the previous Christmas.
7) Because of the experience during Christmas '98, we knew to put ourselves on "vacation" for the two weeks after Christmas. Most of our suppliers close down, so it's difficult to fill orders, when we most likely don't have the merchandise in stock.
8) But when we returned from our "vacation", the order volume continued as before Christmas. In fact, each week, it continued to inch up.
9) Then whomp again! The catalog crashed once more, again because of the volume. The shopping cart depends on a database of products, with their codes and prices, in order to work. Because we had so many orders, and so many items per order, the shopping cart program we were using could not retain in its memory all the real-time activity at any one moment. We installed a MYSQL database, and re-wrote some computer code so that the shopping cart could use it, so we could solve this problem. Of course, this meant editing the original database of 40,000 products. This took 3 weeks. Then we put the shopping cart back on-line, and a few days later it crashed --- and back and forth - on-line, crash, on-line, crash until the bugs were worked out.
10) By March, the average orders per day were running around 10, with the average number of items ordered per order around 15. The volume has continued to increase during the summer months. In August, the average orders per day were around 14, with the average number of items per order close to 20. We were now having 30-40 orders per day several times each week. It became obvious that we could only satisfactorily handle 9 orders per day. Our turnaround time from receipt of an order to shipping it out had been 3-5 days before Christmas '99; 5-7 days between March and May; and 7-9 days between May and August. Totally unacceptable. To make matters worse, to keep up, we have had to, for the time being, dispense with several good business/marketing practices. We stopped sending an email notification to people when their orders were sent. We stopped adding email addresses to our mailing list. We stopped writing descriptions down on invoice forms; we now primarily write only the code number. We stopped notifying people of backorders, though we believe this activity is important.
11) The shopping cart has continued to malfunction periodically. The next Whomp! came as we began getting many orders that were over 100 items. The cart could not store this amount of information, so back to some techical gerry-rigging.
12) We now get well over 100 emails every day. Some don't get answered for 10-14 days. I try to answer all the ones related to actual orders within 1-3 days, but sometimes it's a challenge. Our internet service provider limits the amount of email storage available to us. For the past 3 months, we've been getting many calls from people saying that they tried to email us, but got an "undeliverable" notice. I kept trying to duplicate what they were doing, without any success -- that is, all my test emails went through fine. It took some detective work, but finally detemined that once our email storage level is full, all additional emails that are sent at that moment, are rejected and returned to sender. We're having to set up a new email system so that we can increase the memory available.
13) This summer, there have been several weeks where we've been absolutely overwhelmed -- paralyzed -- by orders. Where it used to take 20 minutes to print out the day's orders off the internet, sometimes it was taking 1 1/2 hours. Much of the inventory that has come in just sits in boxes -- there's no time to get it out onto shelves. There's little time to reorder things, or to keep on top of what needs to be re-ordered.
14) We hit a certain cash flow and profitability level this summer to where we felt we could add the equivalent of a full time employee. The profit margins on on-line products is very slim, so it takes a lot of volume to generate extra cash. We hired two part-time employees. One worked out, one didn't. We're looking for another part-timer. Nashville's unemployment rate is around 1%. The effective minimum wage is around $10.00/hour, which we can't afford. With new employees have come the inevitable increase in problems such as items missing from orders, totals added incorrectly, wrong items sent and the like.
15) As our friends put it, this is a transitional time that we'll just have to live with. I'm sure we have many dissatisfied customers who don't get their orders as fast as they'd like, who don't get their emails responded to in a reasonable amount of time, and who aren't kept up to date with their informational needs, such as about backorders. Until we can adapt, we'll just have to accept the fact that we will lose customers.
16) Many thanks to Martha Stewart. You can do all the internet marketing in the world, but if you're lucky to get some free co-marketing from a big player, more power to you. Martha Stewart published a book in Fall of '99, plus had a TV segment, on Cranberry Christmas Wreaths. These were made using Druk beads (plain round beads). She called them "druks", but never mentioned they were plain round beads. In internet searches, Land of Odds came up with one other source for "druks", and we were cheaper. Last fall, we filled over 200 orders for the druks, until all my suppliers ran out of the 10mm size in ruby or light siam. We had to cancel 176 orders. We've had so many orders for these beads this summer, that we'll be lucky to find these beads again this fall to meet demand. Whether we we able to fill the orders or not, this has given us a tremendous visibility boost on the internet.
17) Glass beads are in! There have been several fashion trends over the past year -- all using glass or gemstone beads, but especially glass. Almost all our suppliers have been overwhelmed -- shortages of beads, shortages of employees to process orders -- the whole distribution system has virtually broken down. Because of this, we've had to increase our in-house inventory more than we originally planned, and rely on our distributors less. We are definitely not equipped to handle a turnover of almost $1,000 glass beads every day. Last fall, we set up a small warehouse system to better organize our merchandise. Totally inadequate. This summer we began to set up a larger warehouse system to better organize things.
18) We had had an inventory control system which stopped getting up-dated in June '99 when the shopping cart system first crashed. It hasn't been updated since. During this time, we haven't been able to easily determine if an item is in stock, except based on our own memories. During this summer, our memories have been useless because of the huge daily turnover of beads.
19) We have been unable to raise prices on many items where there has been a price increase. Updating web-pages (and the databases supporting them) takes a long time, and we haven't had that time. The most serious problem was with gemstone beads, and we have managed to update those pages. We were actually losing money on those items.
20) We have been very slow to add new items, or delete discontinued items. Again, no time or energy. These are very time-consuming tasks. Updating web-sites is critical, so this will be getting a lot of attention as we gradually pull all the pieces back into place.
21) We have made major efforts to simplify the navigation on-site. We have added a left column menu-bar, deleted a lot of repetititve information, shortened the pathways between indexing menus and product price and availability tables.
22) There are now on average over 3,000 unique visitors to our site every day.
23) We set up a small site for our sister store - Be Dazzled Beads, and a lampwork bead Gallery for James Alfred Jones.
24) The rate of returns holds steady between 2-3%. The rate of declined credit cards, stolen credit cards or credit cards with bad account numbers is also about 2-3%. Our international orders represent about 5% of the business, and come from every continent.
25) Even thought they represent a small number of transactions, because the volume is up, the number of fraudulent transactions has increased. The use of stolen credit card numbers is especially high among international orders. Because of this, we now hold international orders one week before we even begin to process them.
26) We get many complaints about shipping costs -- especially for small orders. UPS has increased its costs twice in this time period. The Post Office doesn't provide a good alternative, because, as a business, and as a business that wants some level of tracking and insurance, we must use priority mail. The cost ends up about the same as that for UPS. UPS picks up packages at the shop. For US Postal Delivery, someone has to have some free time to go to the Post Office and wait 40minutes to an hour. If we're paying staff to go to the Post Office, it becomes even more impractical.
27) The shopping cart we are using was not designed for use in international orders. We have had to modify it as best as possible, but the section requesting address information from other countries is a bit awkward. There is nothing we can do about this unless we switch shopping cart systems.
28) The volume has begun to hit that "point", whatever it is, that cash flow is no longer a constant problem (I didn't say it wasn't a problem). The volume is also high enough that I am able to predict with some accuracy what items will sell, and with what frequency -- at least for about 20-25% of our product line. This has enabled me to more easily increase and maintain an in-store inventory.
The history of our catalog operations has had some common
themes, not all pleasant:
- we're always overwhelmed.
Running, developing and evolving with this catalog has meant re-inventing the
whole business about every three weeks. Procedures, supplies,
inventory control, billing processes, customer relations, training staff,
updating the catalog technology. Everything has to constantly
get re-invented.
- our level of customer service keeps deteriorating. Most of our energies have been on fixing the technology underlying the catalog. As the volume multiplies geometrically, some technical system keeps going awry.
- people seem to like the catalog and web-site, and their encouragement is very motivating. We think we can continue to provide the content and products they want. We have some great ideas we hope to be able to implement over the next year.
- internet marketing is an activity that must be constant. There are no easy ways to do it, no short-cuts. Our marketing efforts have been very successful.
- because people can so easily and quickly compare prices on the internet, it is difficult to charge a sufficient price to cover all the costs involved. In our case, there is not enough "profit" to make it feasible to reduce any one staff member's individual workload by highering more staff. The catalog takes a lot more effort to achieve the same level of profit than the real store. It makes a lot more money, however, than the real store.
- The Land of Odds web-site is the 29,000th most visited site on the web! How about that! It now places in the top 40 listings under the keyword "beads" in several search engines. There are 300,000 sites that are relevant for the keyword "beads".
Thanks for being there for us and with us,
Warren and James