Archive for category Lessons Learned
New Interns
Posted by Brett in General Entrepreneurship, Start-Up Tips on May 26th, 2010
Last week we said goodbye to our two interns that had worked with us for 6 months and really helped us take some big step forwards.
In addition to all the hard work they put into the company, they also helped me learn and grow as a manager. Specifically, today I am much better prepared to work with all of our future interns that come through the company. To help ensure all parties get as much as possible out of the internship we now have a few established practices.
First, we require that all incoming interns fill out an entry evaluation. This allows them an avenue to communicate their expectations for the position and what they want to get out of it early on. We can use it to temper expectations and catch any potential issues early on.
Second, we are now holding bi-weekly team meetings on Mondays and Fridays. We have always held a weekly meeting with our team, but by increasing the frequency to twice a week I hope to increase the accountability of everyone (including myself) to get as much as possible done during the week. On Mondays we go over the weekly expectations/projects for the week and on Friday we see how everyone did. I like a little pressure to perform and this helps add it. These meetings have also proven to be great times for brainstorming and cross-pollination of ideas.
Third, we are requiring some in-office work hours. This was tough to do in the past as we didn’t have an “official” office. I am a fan of remote work environments, however I think the accountability of required hours will improve performance. On top of this it gives them an opportunity to have each other and myself near by to bounce ideas off of one another. We are requiring that everyone spends about 1/2 their time in the office.
Finally, we have established an official exit review. All the interns were informed up front that they will have an exit review and they were provided a template of what they will be reviewed on. This should again increase accountability. It also provides us another great opportunity to receive feedback on our internship positions, management style, and anything else that is on their mind.
This week we welcomed 3 new interns that will be here for the duration of the summer. Hopefully these new additions to our internship program will really allow them and us to maximize the value of the internship experience. I know we are getting better and better at it every day.
Supply Chain & Control
Posted by Brett in Start-Up Tips on April 28th, 2010
Scrubadoo.com is a drop-ship operation, you can read about our supply chain and how we got our start as a drop-shipment company here. We are trying to differentiate from our competitors based on our service, not an easy thing to do. It becomes even more difficult when you have a limited amount of control over the fulfillment of your orders.
In case anyone is thinking of starting a company with a similar model I thought I would throw a few of the issues you may run into.
-All of your suppliers have different fulfillment periods.
- If someone orders products from two different suppliers it is very likely that the products will arrive at different times. This tends to make the client think we forgot a portion of the order.
- We can’t actively advertise that your product ships out in “x” days since they all ship out in different amounts of time.
-Suppliers have different return periods.
- While we accept returns for 100 days, they only accept returns for 30 days typically, thus anything that is returned to us becomes inventory.
-They all have unique order entry systems.
- This makes it impossible for us to have a standard order entry process, resulting in more time spent on this task.
-We do not always receive tracking numbers.
- If a client calls to see the status of our package sometimes we do not know it.
-You are managing several relationships.
- Just like anything else the relationship is important, especially for the smaller companies. The better you treat your account reps the more they will take care of you.
- If you need some rush work done, you can’t do it yourself, you are depending on another person to come through for you.
-We don’t have the ability to put anything in the box
- All that is shipped with the item is a packing slip, it is not unique and pretty obviously does not come from us.
- We can’t use the shipment to market our products further
There are a lot of issues that arise from a drop-ship model. Unfortunately, it is our only option right now. Inventory costs money, and right now, we have very little.
Dealing with a Major Industry Change
Posted by Brett in General Entrepreneurship, Lessons Learned on April 12th, 2010
There was recently a major shake-up in the Medical Uniform industry which has become the cause of slow delivery, shipping mis-haps, and upset customers. The result; a back-order log of more than 200,000 Dickies Scrub products that need to be shipped, a number that won’t shrink quickly.
To keep the details brief: For the last eight years Selecta Corporation has had the rights to manufacture and wholesale Dickies Medical apparel to your favorite retail uniform stores, like scrubadoo.com. As of just a few weeks ago this is no more. Selecta lost the rights to produce anything under the “Dickies Medical” brand. Dickies Scrubs won’t be going away, the rights for these products has been awarded to Strategic Partners Inc., who also produce scrubs under the Cherokee, Baby Phat, Sketchers, and other well known brand names. Strategic Partners will take over full time on the Dickies Medical brand June 1st. Unfortunately Selecta has already had to lay off over 100 employees due to the change, with more to come.
These layoffs, which amount to more than 75% of the account service reps and 50% of the warehouse people, have caused customer service to slow to a crawl (our rep was laid off) making it very difficult to get orders processed and once you do get an order through, shipping times have become extremely slow due to lack of staff.
On top of this there are issues on what inventory Selecta can ship right now as they are trying to lock down a price with SPI for the purchase of everything. This has made matters worse. SO the question became, what do we do, if anything? We have really only taken 2 major steps.
- Turn off all active advertising for Dickies Products
- When a client does purchase product let them know about the issues immediately and give them the opportunity to exchange their order or even get a refund if they can not wait the extra week or two fullfillment will take.
So far that is all we have done. Hopefully we do not need to stop selling the products all together.
Until next time,
-Brett
Advertising
Posted by Brett in E-Commerce, Start-Up Tips on February 24th, 2010
It is difficult to drive traffic to a website.
I realize that this probably isn’t an incredible revelation to anyone out there. However, it is really hard. Especially with what adds up Marketing budget that could be exhausted with one big night on the twon. There are really only so many free avenues to market your product.
We have tried, gift cards, flyers, direct mailing, emailing lists, promotions, addwords, approached nursing groups on Facebook, and more. Turns out that none of these are a magic bullet. I have come to realize that there probably isn’t one.
As you can probably tell, when I started advertising the site I decided to take the approach that I would throw a bunch of cheap darts at the board and see what works. So far we have had very mediocre results. They have gotton us to about 150 unique visitors a day, which isn’t terrible, but it isn’t going to make us.
We are actively trying to come up with new ways to market the company. I am looking for any media outlets that will give me 5-10 minutes, the chance to write a blog post, or a quick write up in a magazine or newspaper (let me know if you have any for us!). It doesn’t matter how big or small. I have also started approaching prominent bloggers in my industry to see if they will help us spread the word about our win free scrubs for life promotion. I hope that some of them will help me out (we need it), I figure we are just asking them to spread the word about a contest that is beneficial to their user base. It’s not like I’m selling crack.
We have also attempted to set up partnerships with hospitals and nursing schools to help market our site. Basically we give them a discount for their students/employees and they spread the word about it, a win win right?
Finally we have approached other web sites that target the same market. The goal is to try and set up partnerships with them such as this one (where our link will be shortly).
Hopefully all of these things will slowly build our base. If any of you have any ideas for me it would be great to hear them as we are always looking for fresh new ideas. There is no bad idea. We are thinking about chalking sidewalks and shoveling our site name into the snow along the major highway…..seriously, so let me know what you think!
Frustrations
Posted by Brett in E-Commerce, Failures and Frustrations, Lessons Learned on February 10th, 2010
So I recently told you how difficult it was to sign with manufacturers so I would actually have product to sell.
Despite this I am almost to the point where I am going to discontinue our relationship with one of our manufacturers. This company has been nothing but difficult to deal with since day 1.
When we first started I wanted to sign them up as our lead supplier for our “scrubraisers” brand. However we needed a price point that was lower than their standard wholesale pricing. I figured since we would be buying in bulk we may be able to get preferential pricing. I knew for their involvement to be feasible we needed to get our pant cost to $9.00 a pair, which was roughly a 25% discount to what they currently offered me. I spoke on the phone with our account rep and he said he had to check with the higher ups. He gave me a call back and said as long as we were hitting certain minimum order sizes they would work with us.
A few weeks later I emailed in our first order and I received an email back from a name I didn’t recognize stating that my rep had left the company. They then told me that they didn’t offer pricing as low as what I had mentioned in my email. I called in to explain the deal we had agreed to between our companies. At this point I started looking for an email chain, which I didn’t have….in fact I didn’t have anything in writing (lesson learned there). Eventually after many phone conversations, it became my word about a conversation I had on the phone with an account rep that was no longer with the company which didn’t end up being enough (mind you Mer, my partner, had actually visited this company personally, met our account rep, and the CEO). After going back and forth I actually got on the phone with the CEO about all of this and he basically questioned my integrity. Which really pissed me off.
Unfortunately, I couldn’t afford to drop them as a supplier as they were pretty much my only option at the time. They also have a fairly unique product that we have since done fairly well selling.
The problems didn’t stop there. The supplier specializes in “collegiate logo” scrub apparel, has 16 base colors and really only 4 cuts that they sell. Which is VERY minimal compared to the large companies. When adding their scrubs to our site we needed some info from them, such as what colors come in what sizes and what schools do they offer. Turns out that no one in the company has an exhaustive list of either of these things. I asked for this list over 6 months ago and still haven’t received anything that is even close to what we need (I have been promised it many times, most recently I have been told we will get it in February….we will see). It has turned selling these products into a trial and error game.
Unfortunately it doesn’t end there.
A few weeks ago we sold a set of “Army, Black Knights” scrubs and when I sent the order in I was told they had just terminated carrying that product (we weren’t told).
One of our first customers from OCTOBER, just recently reached out to me and said they never received the Stanford scrubs they ordered. I contacted my new account rep and sure enough the package had been returned to them because it was lacking an Apt #….It was returned over 4 Months ago and they failed to contact me so I could alleviate the problem and reach out to my customer to let them know about the issue.
Two weeks ago we had a client order a UGa scrubs and wanted the rush delivered. I called my rep and asked if we could do it (we paid the rush shipping charges etc) he said no problem. 5 Days later I get a call from the client and they have yet to arrive. I called my rep and he found the scrubs sitting in a “ready to ship” pile that they had been in for 5 days. They promised to rush them out that day. 4 days later I get another call from the client, and the scrubs he received didn’t have the logo on them, they were just blank scrubs.
The list goes on. I would guess that 1/2 of the orders I have taken for this company have been mis-managed in some way. This makes us look really bad.
I don’t know where my breaking point is with them, but I think I am close. It is a lot of trouble to sign a manufacturer and then get their scrubs available for sale on scrubadoo.com. Which makes it very difficult for me to cut the ties.
I haven’t done anything yet, but we may be close.
Adding Manufacturers
Posted by Brett in E-Commerce, Lessons Learned on December 6th, 2009
It has almost been a full year since we first ventured out to start scrubadoo.com. Looking back on how we have gotten this far, one step that stands out as perhaps the most important was initiating our relationships with major manufacturers.
We originally planned on carrying only Softscrubs brand scrubs but quickly realized that this would significantly limit our target market. In order to be a major player in our industry we need to sign up the big boys, Cherokee, Landau, and Dickies. Early on I thought that this would be one of the easiest tasks, looking back on it, it was one of the most pivotal. The first time I contacted Cherokee I was pretty much laughed at. Dickies and Landau were not much better. It was your classic Catch 22, I couldn’t get any uniform suppliers to sign with me until I had other uniform companies to use as a reference. Once you broke into the circle it seemed like it would be easy to sign everyone up, but breaking into the circle as an online provider is extremely difficult.
I was finally able to sign up Gelscrubs, a much smaller company in the uniform universe. My references: a screen printing shop in Charlottesville that I had done about $200 worth of business with, a buddy of mine who had done some pro-bono legal work for me, and my friend Frank who I was starting Conrohl.com with (another one of my ventures). They were willing to give us a chance early on, but we weren’t really doing any business with them, making it difficult to use Gelscrubs as a reference.
As we improved our site and a few sales I again decided to attempt to contact the big boys. However, if it wasn’t for a bit of luck I don’t know if we would have a signed anyone up. That luck? In the next entry I’ll let you know how we signed our first big one.
-Brett
Marketing Strategy: Facebook & Google
Posted by Brett in E-Commerce, General Entrepreneurship, Lessons Learned on October 27th, 2009
We have been live for just about a month now and have been working on the execution and improvement of our marketing plan along the way. Like many other entrepreneurial ventures we have a very limited marketing budget so we built our plan around the assets that we do have; man hours (both mine and interns), a decent understanding of social networking, and a relatively decent network.
For this post I will give a brief update/rundown on our online advertising plan.
We advertise online through Google and Facebook. At the beginning we used FB only because we were able to find an offer giving a free $100 trial (you can get it here). Unfortunately we flew through the $100 with very few conversions. We ran about 15 different adds and there did not seem to be a lot of rhyme or reason behind which of our adds received impressions. We targeted the same people and bid the same amount for each add and 1 or 2 would get 100,000 impressions while the others would get around 100.
FB was not a total waste and we still do advertise with them. It is very good at targeting specific demographics and we did get some good early visibility for scrubadoo.com. Additionally, people seemed very willing to sign up for our scrubaclub. These new scrubaclub members provide us with email addresses and have displayed obvious interest in our product (both good signs). This has also expanded our marketing list. Overall, I would say the verdict is still out on advertising on FB. Before they become a legitimate advertising option I think that they need to add more transparency to how their advertising system works and tracking systems for the results your advertising dollars provide.
We also launched a rather large Google Adwords campaign (and a small Adsense campaign with this blog, feel free to click a link to the right!). As you would expect words like “scrubs,” “nursing scrubs,” etc are all extremely expensive to advertise on.
Which brings me to an important point that I think a lot of companies ignore. It is extremely important for every company to pay attention to the financial portion of advertising on Google, no one can stay in business losing money. Sure you can get millions of impressions and clicks by being the top bidder, but you need to calculate what the value of a click is for your company. What is your conversion rate? Of those conversions how many will come back and purchase from you again? Will they tell friends? A “B-School” term for the answer to these questions is what is the “life-time value” of each of your customers. No matter what you call it, these are all questions you should ask yourself when determining how much you should bid for words (or spend on any type of marketing). What is great about Google is that you can track all of these things and drill down much further than you can with more traditional marketing options. Moral of this story: use the free information and don’t overspend for your advertising.
Our campaign is still very young so we don’t have enough information to draw any statistically significant conclusions. There are a few things I am sure of though. First, it is much cheaper to get impressions on related websites (through other peoples Adsense accounts) then it is through search terms. Unfortunately, to this point those adds have been less effective for us. It does make sense though, people who click Adsense adds do it more on a whim, while if they search for a term they are closer to a purchase decision.
The second thing that I am sure of is that conversion rate is key. We are far below where I think we should be and we need to get better at it. How do we do this? Great question. I don’t believe our pricing is an issue. We are working on ease of navigation, product selection, and a few other areas that may be the problem. We will see how these changes effect our conversion rate.
Google is a proven advertising entity and every company should leverage the tools that they offer. Even if you just use there free analytics program. It will provide you data that can really help you improve your business. Just one last quick tip. If you are paying for a hosting service they will more than likely offer a coupon for a free $50 or $25 dollars of advertising on Google. We use Blue Host and they offer the free add money and every penny counts!
Until the next installment,
-Brett
Merchant Services Part 2
Posted by Brett in E-Commerce, General Entrepreneurship, Start-Up Tips, Uncategorized on October 15th, 2009
I know this has been a little while coming but I think I am finally at the point where I have a little time to write more frequent posts. Before, I start part 2 of merchant services, I would like to mention that we have added some add’s to the blog so if you see anything you like please feel free to click through and help support the us.
OK, on to merchant services. In my last post on this topic I spoke about the steps it takes to set up an account and what the value chain of the industry looks like. This post is specifically about fees. Everyone who accepts credit cards hast to pay something (even Target and Walmart) but you can do several things to help minimize your costs, even as a start-up. How do I know this? I know because A) I used to sell merchant services and B) I just went through the process of setting them up. Here are a few steps to take to minimize your costs:
- First understand your busienss. Specifially, what will your typical ticket size be Vs. how many tickets a day will you process. This element is key because every merchant processor is going to charge you in two ways; 1st a per swipe transaction and 2nd a % of the total bill. They dont advertise this, but merchant processors are willing to negotiate prices on both of these cost elements (i.e. charge a smaller per swipe for a higher % and vice versa). This is why it is important to know your business. If you do very few swipes but have large ticket sizes you are better off with a low percentage and a higher per swipe charge. If your company does a lot of volume with small ticket sizes then you would want a little higher percentage with a lower per swipe (scrubadoo.com for example). The better the idea of what your transaction size and volume will be the more optimal your fee structure can be.
- Ignoring their publicly advertised pricing, look for a few processors that you are comfortable working with. Research the company, how they do business, even ask for client references (people you can actually call). Just like every other part of your business do your due dillagence on your merchant provider.
- Once you have identified your top two or three choices for providers contact them and ask them for a quote. Make sure you tell them what you are looking for in pricing (remember you know your business better than they do and they can taylor thier quotes to what you specify i.e. small per item and high %). It is also important to take into account the equipment you will need. If you are an e-commerce site you will need none. But if you have a brick and mortar shop you will need processing equipment. The newest wireless technology can be close to $1,000 for one machine. It is important not to ignore this aspect of pricing. Once you have the quotes in hand you hold the power in the relationship. You have choices and all of the processors want your business.
- Again, ignoring pricing, decide which processor is your top choice. If your top choice also has the best pricing you are done (although it never hurts to tell them you are looking at other companies to see if they will throw in free equipment etc). If they are not the lowest, tell them. They will likely ask for any lower quote in writing. Give it to them. Most companies will at the very least match competing offers, more than likely they will actually beat competing offers.
- Now you have your preferred vendor at the best pricing you could have hoped for.
- Re-visit your account at the very least annually, see if your pricing is still ideal for your company. As you grow don’t be afraid to renegotiate. The bigger you are the more valuable you are to your processor.
That is my breakdown on merchant services pricing. We are currently using Authorize.net as our gateway and BB&T for our processing. If you are in a region where you can use BB&T give them a shot. They are very good at both service and pricing.
-Brett
Live
Posted by Brett in E-Commerce, Entrepreneurship at Darden, General Entrepreneurship, Successes on September 8th, 2009
OK everyone, Just a quick message to let everyone know that scrubadoo.com is officially live! Like always I have been crazy busy getting everything correct and finished. I will start writing regularly again as soon as we get things more stable.
In the meantime tell your friends about the site. You can give anyone the discount code Family&Friends (no spaces) and they will get 10% off their first purchase.
Check the site out and send messages giving me feedback!
-Brett
Cart Systems
Posted by Brett in E-Commerce on August 4th, 2009
I know I haven’t finished the merchant services piece yet, but we have been extremely busy with another aspect of the business that I think is good to talk about (besides we have yet to finish setting up the merchant account).
I want to share a little insight in the online retail cart system, what you use to load your products into and have people check out of etc…, that we are using, X-Cart (XC). XC is a very complex system that has taken us several weeks to begin understanding. We are finally at the point where we are starting to get the hang of it.
On top of the standard XC implementation we are having an outside developer make specific modifications that we think will help differentiate us. I have learned a ton from the process of getting the cart up and running.
First, it is extremely time and labor intensive to load products into the system correctly. We were doing it manually one by one to start and we then figured out a way to upload directly from a csv file. Even with our new bulk upload capability it is still takes a tremendous amount of time filling out the csv to get the initial products onto the site (this is probably the most monotonous job we have yet to encounter).
Second, what makes this even more difficult is the importance of the upload. Everything needs to be perfect or else it will come back to haunt us. If we mislabel products or make any other mistakes we will be hit with returns that can have a huge impact on our bottom line.
Finally, like everything else web based expect it to cost at least twice as much and take twice as long as expected. There are always error messages that the programmers will run into. It is extremely frustrating and a huge pain.
All in all I think XC is a powerful system that will treat us well once we have it figured out. On the flip side they are expensive, have terrible customer service, and are impossible to get a hold of.
On a side note we are only few days away from the official launch which is extremely exciting. Once we launch the site in Alpha I will post it here and ask everyone that reads to go to the site to provide feedback and run through everything to help look for bugs.
-Brett
