Practical Ecommerce

Lessons Learned: Kathy Seigler with Ecommerce Superstores

”Lessons Learned” is a series where we ask ecommerce business owners to share their experiences and advice. For this installment, we interviewed Kathy Seigler, CEO and president of Ecommerce Superstores, a Bowling Green, Ky.-based online retail brand with six niche online shops: CoolComputerBags.com — which was launched in 2007 — and five other specialty retail shops all launched in 2010. They are: BackpacksSuperstore.com, TheLuggageExperts.com, YummiHandbags.com, DiaperBagsOnly.com, and WeKnowWallets.com.

Seigler started her retail business on eBay in 2006. She had no background in ecommerce, having worked previously as a neuropsychologist. After about 6 months of selling on eBay, she identified a marketplace niche for laptop bags and launched CoolComputerBags.com in late 2007. In 2010, CoolComputerBags.com recorded gross revenues of roughly $815,000.

“At the time it was hard to find cool laptop bags even online,” said Seigler. And early on Seigler realized that laptop bags were a good ecommerce business to be in because of low shipping costs, stating, “Laptop bags are good shipping products because they are fairly lightweight and won’t break during shipping.”

Siegler decided to expand the business in 2010 by launching the five other niche sites.

Kathy Seigler

Kathy Seigler

“Because our new sites are still not ranking [in search engines], we do not yet have steady revenue stream from them yet,” says Seigler. “But we expect them to generate at least the same as CoolComputerBags.com if they can obtain a top three ranking on Google search,” Seigler anticipates of her newly expanded brand.

Running Multiple Shops

“When it comes to running the six shops, Seigler keeps it simple saying, “We already had CoolComputerBags.com built, so we redesigned the theme and applied it to each of the new sites. Because the Magento platform already had ‘multiple store’ functionality we did not have to build each site from scratch. Despite this ‘built in’ feature of Magento, there were still many bugs to work out. The process of building five new sites took about 6 months. And many months have followed working out the kinks.

“Each of our now six sites specialize in a single product category,” Seigler says. “And all of the sites share the same navigation, functionality and shopping cart. The sites are also color coded, which differentiates each one, but all with the same template. We are still experimenting with our design and testing to see which converts best.”

Employees and Management

“When I first started, we had zero employees — it was my husband and I for that first year or so. Then, I hired, as our first employee, a local college student for about $10 per hour to help with order fulfillment and customer service.

“We kept growing, and at our peak we employed twelve people total. I had good people who worked well independently, so it was not that difficult. But the more there is to manage, the more things don’t get done properly. It’s like the old adage, ‘If you want to do something right, do it yourself.’ We now only employ three other people with some occasional outsourced support.

“The most important thing in hiring someone is attitude. They must have a positive, can-do attitude. Everything else can be learned. Just look at me, I didn’t know anything about ecommerce. Had I known then what I know now, I may not have gotten into this business because it is tough!”

Store Platform

“When we first launched in 2007, Storefront by LaGuarde (now defunct) configured our first site. It was ugly, but I thought it was the greatest thing ever. We moved to a different platform and rebuilt the site about 12 months later.

“Now our websites run on the Magento Community platform. It is chalk full of bugs because it is an open source platform. The most frustrating aspect of using Magento Community is that there is no support. If there is a problem with the software, you just have to deal with it until they release a patch or newer version, which then costs more money to implement. It costs $1,000 [per year] for hosting and there are no additional costs because Magento is a free platform. But that in-and-of-itself comes with its own cost.”

EcommerceSuperstores.com home page.

EcommerceSuperstores.com home page.

Orders, Inventory and Shipping

“We work with about 60 different suppliers currently and we stock some inventory as well as work with vendors that drop ship. To manage the entire inventory for so many different stores, we have a nice piece of software that allows the vendors to manage inventory themselves. It is a third party extension specifically developed for Magento. For those vendors who choose not to do that, they email us when items are out of stock and our inventory manager is responsible for updating it.

“We have an RSS feed that tells us when we are running low on stock. We only stock the minimum for products that sell through slowly. It’s a very difficult thing to balance, especially during the holidays.

“Our average [shipping] cost-per-parcel is about $9. Drop ship vendors receive email notifications that also include a packing slip and a shipping label. The software does have the ability to be automated, but we manually review each order ourselves before sending them to the vendors for the sake of accuracy and so we can stay on top of our orders and customer’s needs.”

Customer Service

“On the customer service end of things, we have a fantastic lady, DeAnna Roberts, who takes phone calls and replies to emails. I manage live chat myself and I really enjoy it. I’m proud to say that we do not have very many instances where customers are unhappy. In those times when we have messed up royally, we tell the customer we will do whatever it takes to make them happy — then, we do it.

“I’ve gone so far as to send flowers to a customer who we forgot to refund for about 6 months. We also send $5 Starbucks cards and personal notes to customers when we are at fault.”

Marketing and Social Media

“Our marketing strategy varies. We lost a lot of money last year trying pay-per-click (PPC) advertising. We never arrived at a profitable result. We lost about $50,000 in just three months. No wonder Google is a ka-jillion dollar company. I would not advise anyone to attempt PPC unless they have about $100,000 to spend ‘testing’ it. As far as Facebook and Twitter go, we post our email campaigns, special offers and have contests. We also have the ability for customers to share on every product page.

“But to be honest I still haven’t figured out yet how to leverage Facebook and Twitter to increase sales. We are considering an extension that allows us to sell on Facebook directly called ‘Facebook Shopializable.’ And I’m very keen on having an ‘incentive to Like’ functionality.

“I think the genius of social media is if a business comes up with something revolutionary, like Groupon did. That’s something people really want to talk about and it spreads like wildfire. Otherwise, you are a nameless face in a sea of millions on Facebook. The reason I think it’s important, however, is for rankings. It’s no secret that Google has incorporated the Facebook ‘Likes’ into its algorithm, which makes a lot of sense. Word on the street is that ‘Likes’ will eventually replace ‘links.’”

SEO Is Not Rocket Science

“We handle all the SEO in-house mainly because it is so costly for six sites instead of just one. We also realized, ‘Hey, this is not rocket science. It’s just time consuming.’”

CoolComputerBags.com home page.

CoolComputerBags.com home page.

Biggest Mistakes

“Where to begin? My first mistake was not being educated enough about the ecommerce industry as a whole. I didn’t know what I was getting into, but sometimes that’s the best way to start. Experience is the only way to learn.

“My second biggest mistake was trying to grow too fast too soon. Grow gradually and make sure spending is in line with revenue.

“Which brings me to my third biggest mistake: return on investment. Do not do things because they are ‘industry standard.’ Unless you see a measurable return on your investment, whether it is in marketing or staffing or inventory management — make sure it is paying for itself.

“Another big mistake I made was not having a fool-proof methodology for product upload. This is probably the single most costly error you can make in ecommerce. In the past 4 years I’ve made more mistakes than not. But I keep trying and my persistence will hopefully pay off. If not, I’ll write a bestseller about what to do when starting an online business.”

Biggest Successes

“Our biggest success is having a number one ranking in Google for the most relevant terms related to CoolComputerBags.com. I’m also very proud of being selected as one of the ‘Hot 100 Best Retail Websites’ by Internet Retailer.”

Best Advice

“Watch every single penny and be careful not to get sold on the latest thing that is promised to increase sales, traffic or conversion. Also, surround yourself with excellent people who lift you up every day professionally and personally. Life’s too short not to.”

Practical Ecommerce

Practical Ecommerce

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  1. Kim Rossey March 11, 2011 Reply

    Great success story and the future is looking good. Nice that Kathy Seigler knows it takes hard work. No magical in the box solution.

  2. Brian March 14, 2011 Reply

    Very similar situation to what I am doing, so this article really hit home. I’d love to know how much revenue and traffic she was seeing in the first calendar year once she put CoolComputerBags online. I’m hitting the beginning of year 2 and its really picking up and getting exciting.

  3. corradoizzo March 15, 2011 Reply

    “We kept growing, and at our peak we employed twelve people total." Your story sounds very familiar. i started out in a living room and ended up with 22 people working for my company with offices in London and Germany. I had no training whatsoever in Company Management and did it mostly all from the gut and wasting a tremendous amount of energy. Only years later when i went back and reviewed my actions i found out by learning from the masters in management that there is a magical line in coordinating employees without additional training.

    That line is at 11 after that you need to master the skill of creating a structure/order or you’ll be suffering the consequences ending up micromanaging and so forth. You can learn this the hard or the easy way but you need to learn it nonetheless. There is a high risk of being inefficient if you do not get the proper training. After many years in advising and running companies it boiled down to the Concept and implementation of what is called "Trust".

    You have a remarkable story and i enjoyed reading this article it is amazing to see an idea grow from nothing to everything i am amazed each time.

  4. John Mac Donald March 15, 2011 Reply

    Hi Kathy,

    I was struck by your comments regarding Social Media, especially as you seem to be ideally suited and pretty social yourself. So I took a quick look at your site and also your Facebook page.

    My main observation is that you are making the wrong use of Facebook in trying to broadcast about your company and products. Please bear in mind Facebook is not primarily an advertising channel but a social network and people will quickly stop reading your page if all you do is show what is already available on your site.

    Instead try using Facebook to engage with people, listen to what others are saying, provide content others want to read.
    In conclusion try to imagine walking into a room full of your friends one evening and then spending the rest of the evening just talking about yourself and your products rather than listening to what those friends have to say and interacting with them. Facebook is pretty much the same. Like SEO not that difficult once you get the intent behind it.

    Congratulations BTW on your great ecom site and best wishes for your future social media.

  5. LivLuna March 15, 2011 Reply

    Thanks for this story- I love the lessons learned interviews- please do more of them!! It is so helpful when you’re starting your own e-commerce site, and are trying to figure out how to avoid mistakes when you don’t yet have the experience of knowing what to avoid.

    I have heard Kathy’s sentiments re PPC from others and am thus loathe to try it and waste money I don’t have. My question for Kathy & others commenting, what do you suggest in terms of advertising, and what should be your ROI on giveaways and contests on social media? For example, if you give away a product of x value, how many new FB likes & Twitter followers is that worth?

    Thanks, and pls check out my store at http://livlunashop.com any advice or thoughts are so appreciated!!!

  6. frank65l March 15, 2011 Reply

    Wishing you the best of luck, as you stated about Magento, i can’t say you picked the best platform, much less headaches and time wasted using a hosted platform.

    There are a few suggestions i can make, like changing the color of your toll free number, very hard to read, search box needs to have the phrase removed or to disappear when imputing text, and test with different browsers, i found a few problems when viewing with FF.

    Keep a going, you have started moving in the right direction, don’t neglect your money making website, the others can grow slowly.

  7. Gary MacDougall March 15, 2011 Reply

    Magento CE (Community Edition) is free. However, with free comes a cost (as Kathy points). The cost is usually ownership and control, which means you will have to find someone (if you can’t do it yourself) to manage the site, do updated and develop features you want. The reason Magento is such a great product, and this was such the right decision for her business, is that its built on a platform that is very flexible so that it can work with the varied degrees of needs that merchants have. Unlike, the hosted shopping carts, which charge you monthly for hosting and licensing their technology, having your own shopping cart and hosting it yourself is really critical so that you can control your own destiny.

    Real e-commerce folks, the folks doing real business need fine granular control so that they can "change on a dime" and not be held hostage by poor hosting, lousy support or worse, a product that is limited to allow you to make any changes you need to make at any given time.

    I think most merchants eventually come to this conclusion when they grow to a certain size and realize, they need to own the whole kingdom to be able to ensure they can control it…

    One thing Kathy touched on was the upload of products and mistakes that she made. I’d like to know if she’s using a back-office inventory system and did it require her to integrate Magento with that system — or is she doing inventory control and product fulfillment out of Magento?

  8. Treasa December 13, 2013 Reply

    This company has obviously made changes since this article and not for the better. coolcomputerbags has no telephone number to get info, and the number listed is out of service. Email response to date zero. So I’ll be buying from other sites as it seems this company has challenges, basic challenges when they don’t supply customer service.