Practical Ecommerce

Lessons Learned: Scanpancookware.com Owner Allan Regenbaum

“Lessons Learned” is an occasional series where we ask seasoned ecommerce professionals about their mistakes and successes. For this installment, we’ve asked Allan Regenbaum, owner of Keylan, Inc., a company that sells cookware, coffee machines and fitness products online. Keylan, Inc. is 12 years old and based in Atlanta. It has two employees, Regenbaum and his wife Robyn, with an annual revenue approaching $1 million. It offers about 200 products. Here we give you Regenbaum’s experiences and suggestions.

Alan_Regenbaum

On general advice for ecommerce merchants

People like to speak to other people. Customers yearn to speak to someone with good product knowledge. They are tired of minimum wage, gum-chewing salespeople who have zero product knowledge. Compete in areas where Amazon.com cannot, for example where just being there to explain the product to the client is a unique differentiator. For high-ticket items, I think the web is going to be used more and more to push customers to call human salespeople. The rate of cart abandonment is too high.

On shopping carts

I use Zen Cart and/or Joomla! plus VirtueMart. Our Zen Cart has a lot of customizations for payment methods and shipping. We have added all that we need in the back end to automate our flow of work. We have minimal involvement in handing orders off to vendors. In this regard, being a software engineer has helped tremendously.

On hosting

I use a virtual server at MediaCatch. The hosting company uses virtualization software that creates a somewhat protected environment where much of the behavior of neighbors on the server does not affect our operations. This is what I use, as it allows me to create as many hosting accounts as I like at a reasonable price, in a relatively safe, reliable environment. The downside is that virtualization does not always work well, and often our sites slow down due to neighbors’ behavior.

On marketing strategies

It’s all web-based and targeted mail shots. Thirty percent of business is from organic search listing, 30 percent is from advertising using Google AdWords, 30 percent is from email shot responses and 10 percent is return business. We have worked closely with MagneticOne to develop an AJAX-based coupon system that offers coupons based on multiple aspects of user behavior. I use blogs within the online store. This makes use of an evolved version of WordPress that exists within Zen Cart. We use blogs outside of the site as well as link-building tools.

On search engine optimization

We use SEO Elite to see what’s getting our competitors ranked, and then we try to do likewise. The reality is that despite all SEO work, the only thing that really gets results is by showing good product knowledge and having a lot of meaningful product information on the site. Keep it simple. There are so many SEO ‘experts.’ We have tried a few over the years, but few truly know what influences Google.

On product information

We try to create enough information for the customer to seemingly be able to touch the product. We show where it was made and how it was made. The client gets to know as much about the product as we do. Then they sell it to themselves.

On pay-per-click advertising

Google AdWords, Yahoo! and Microsoft. The latter two are almost trivial compared to Google. Many keyword strategies generate traffic, but it’s traffic from users that do not want what you are selling. I’d say focus on fewer items of higher quality. The goals is not to get traffic, it’s to get converting traffic.

On expense control

Keep cost of order processing as close to zero as possible.

On order management and back-end automation

Zen Cart customization enables single click purchase orders and ship notifications. Use the standard Zen Cart/QuickBooks module to dump order data to QuickBooks. There are some ‘gotchas’ though, so be careful. For example, if you export orders that contain products that QuickBooks does not know about, QuickBoooks creates the products as service items. This wrecks ‘profit and loss,’ as service items are not counted to ‘sales.’

On shipping

All orders are drop shipped. We handle no inventory whatsoever. From time to time we get returns in our home office that are then sold via the website using a clearance rac

On accounting software

QuickBooks. We eventually splashed out and purchased a multi-user version. This software is very, very frustrating. Multi-user – hah! We use it because accountants use it. It claims to be multi-user, but to open a file you have to hunt down the other person that has the file open and ask them to switch to multi-user mode, and even then there are many reconciliation operations you have to do to switch out of this mode. You have to find the person that has the file open so they can close it, so you can open it exclusively. Given QuickBooks’ resources, one would expect better.

On credit card payments

We use Costco card processing through NOVA. Cheapest around. We use the NOVA viaKLIX application. I modified the Zen Cart viaKLIX application to allow non-real time processing of cards. We found that, once placed, so many orders needed changes that eventually we found it faster to check the order in the backend, then press a button to charge it when correct.

On the competition

It’s been interesting to see the catalog cookware vendors migrate off the printed catalog to the web and also to see how we can compete with these gorillas. The web is a great leveler. I think it’s important to notice that many of our competitors (such as Amazon.com) are broad-based with millions of products and nobody to speak to. We are vertically aligned product specialists. The importance of this cannot be emphasized enough. Customers search broad-based keywords such as ‘cookware’ to get an education. They search ‘Scanpan’ to purchase products. It’s very difficult to take customers who search for ‘cookware’ and get them to purchase ‘Scanpan.’ In each vertical that we operate in, 98 percent of our business comes from the one search term. The biggest issue for me today is the fact that the single largest threat to the small web businessperson is Amazon.com.

On growth and mistakes

It’s hard to say we have made mistakes. Rather than add complexity, we have tried to add more products exactly like the products that work. I wish I had more courage and resources to purchase other companies just like ours.

On general business attitude

It’s a unique privilege to be able to say that we have made money from the web. I’d prefer to keep the business simple and automated and enjoy the lifestyle benefits that come with that.

Practical Ecommerce

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Comments ( 9 )

  1. Legacy User May 13, 2008 Reply

    Great article and I appreciate Allan's openness about his business and the importance of automation. I just wish I had a software engineering background.

    — *Chris – KeywordCreation.com*

  2. Legacy User May 13, 2008 Reply

    Wow! Great article. I also run an internet portal, minus 1 employee, so it's only me, so I can relate to Allan's experiences. Lots of good info to digest here. I wish I was a software engineer that would solve my accounting issues. I would love to integrate QuickBooks, but I am dealthly affraid of that "gotcha glitch". Automating the ordering process would be a dream come true for me.

    Allan, good luck on your continued success!

    — *Louis, TackleToyStore.com*

  3. Legacy User May 13, 2008 Reply

    What a great article! I am about to launch – using Quickbooks and trying to decide between Zen and X-cart. I have a very high end exclusive home sports product and had the feeling the sales will come over the phone while someone looks at the web site. This suggests it try.
    Thanks Allan for your candid and useful insights!

    — *Steve Stuart*

  4. Legacy User May 13, 2008 Reply

    The sales advisory role allows smaller, service oriented retailers to carve out a niche, particularly where configuration or complexity exists. We have found that to be critical to our success.

    — *Robyn – curtaintrax.com*

  5. Legacy User May 13, 2008 Reply

    It's great information.
    As a startup online store runner, I could learn a lot.
    Thanks for sharing your precious experience.

    — *Jeon – JoeDia.com*

  6. Legacy User May 13, 2008 Reply

    Thank you for your input on pay-per-click. I am currently learning the SEO necessary to help my site – launched Jan. 2008. I do not have a background in this so I have had to learn a lot. I'd rather spend the time on product research and development but it is worth it to be self-employed. Your facts and figures are encouraging and inspiring.

    — *Tracy – Founder GoBold.com*

  7. Legacy User May 13, 2008 Reply

    Thanks for the information. I use zencart, but would love to be able to control the "charge" on credit cards. It is a pain to go into authorize.net and reset the charge if changes need to take place. Also, curious as to anyone using a shipping module for freight. This is my biggest headache. Thanks again, I love these real life stories from other entreprenuers…

    — *Dave-u-buyrite.com*

  8. Legacy User May 13, 2008 Reply

    Allan is right on about "people like to speak to people" – that is one thing that the web will never change. Just make sure that your people know the product as he suggests and make sure that they care about your business as much as you do!

    — *Wes customer-e-service.com*

  9. Legacy User May 14, 2008 Reply

    This is an inspiring story and very useful. I particularly liked hearing the breakdown of sales between Google organic, PPC, email, and return business. That sounds like a well-diversified breakdown of customer channels.

    — *Kristen*