Practical Ecommerce

Quick Query: eHobbies CEO Kikkawa Offers Holiday-selling Ideas

There’s no more innovative ecommerce company than eHobbies.com. Founded in 1999, it has grown to become a leader, if not the leader, in its field of hobby and toy retailing. Ken Kikkawa is the CEO of eHobbies.com. He also writes “The (eCommerce) Corner Office” blog at Practical eCommerce. He visited with us about ecommerce merchandising and, in particular, steps to prepare for the holiday ecommerce-selling season.

Practical eCommerce: Ken, you’re an experienced ecommerce merchant. Could you offer two or three ideas for our readers, who are smaller ecommerce merchants, as they prepare for the holiday selling season?

Ken Kikkawa

Ken Kikkawa

Ken Kikkawa: “Sure. I think that sometimes we try to make our businesses a little too complicated. I’d like to say that the business of retail in ecommerce is a commonsense one and that if we offer good value to our customers along with strong customer service, new and updated merchandise offerings, those are the basics that customers are looking for.

“I like to shop. I’m an average customer and I take a look at sites and see what I like about them and also what are things that don’t work out in those certain sites and what’s a turnoff. Putting yourself into your customer shoes and placing test orders on your site gives you that perspective that you wouldn’t normally have. Try to navigate around on your site and shop for things as if your customers would. Take a look at your site and maximize those competitive advantages that you have and then also spend some time fixing the weak spots. I think one of the best and easiest places to look at improving is the checkout process. Make sure that it is intuitive and easy and fast to work with.”

PeC: And you do that with your site, eHobbies.com? You’ll actually log on as a customer?

Kikkawa: “I do. The one thing that I like to do is to place test orders on our site just searching for things. We carry 60,000 products that are toy and hobby related and I’ve got two middle-school-aged kids who are good target customers of ours. So, I like to look around and search for things like science kits and model rocketry and things like that. In addition, I pick up the phone from time to time and talk to customers wherever I can and place orders for them over the phone as well.”

PeC: What are the biggest mistakes you see that merchants make, as they prepare for the holidays?

Kikkawa: “I think one [applies to] online and offline, and that’s big inventory buys or big gambles in inventory. Being overstocked in the wrong products and not being stocked enough in the right ones is tough, especially for businesses that are fashion-oriented. In order to win big, you’ve got to make some big gambles sometimes on inventory.

“Also, I would say for ecommerce merchants, specifically, make sure that your businesses are prepared the scale in every way, [such as] how does your fulfillment process look. It takes so much effort to collect an order from a customer, but have you really looked at your fulfillment process to make sure that everything is working the way that it should because once the holidays hit, they come on pretty fast and pretty hard and you don’t really have time to make corrections in all of those processes once the craziness of the holidays set in place.”

PeC: What percentage of eHobbies’s annual sales comes from holiday selling?

Kikkawa: “Well, we’re hobby and specialty toy retailer and the toy part of our business is pretty seasonal and the hobby part is not as seasonal as the toy part and even though I’d like to de-seasonalize our business as much as I can, the holidays still represent a very large part of it. The fourth quarter is about 40 percent, a little bit more than 40 percent of our total business. So, that’s why it’s so important for us to make sure that everything is firing in all cylinders during the holiday season and just the overall retail escalation during the holidays is pretty similar.”

PeC: What are your thoughts on the current state of ecommerce?

Kikkawa: “I love it and for me, it’s a perfect blend of technology, marketing and merchandising, and all of those things can come together at the same time and there’s also certainly a ton of other aspects to it, customer service and operations and fulfillment and warehousing. But for me, it blends a lot of my personal likes and my background and expertise. I think also it’s a convenient way for customers to shop and to find products that they’re looking for.

“As I said earlier, my site carries about 60,000 products, which you would never be able to physically fit into a toy or hobby store because of the footprint and limited shelf space. So, I think that ecommerce is just a great opportunity for businesses and for entrepreneurs and for merchants of all sizes as well.”

PeC: What do you think ecommerce is going to look like, say, five years from now?

Kikkawa: “I think that one’s really, really tough just because technology and commerce changes so rapidly. It’s almost pointless to put together long-term marketing plan in ecommerce because our focus in the next 18 to 24 or 36 months might be related to concepts or applications that aren’t even discovered yet. [But,] I think ecommerce will continue to see accelerated growth even with the downturn of the economy and when the recession ends, then ecommerce will see an even bigger upturn.”

PeC: Any other thoughts for our readers, who are ecommerce merchants?

Kikkawa: “I think that we all have to make it easy for our customers to do business with us and that doesn’t matter if you’re a large merchant or a small merchant or a seasoned one or just getting started. Make it easy for your customers to do business with you in the way that they want to do business.

“[For example,] we do a lot of business as a supplier to schools, boy scouts, cub scouts, and camps around the country. All of these organizations have budgets to spend on supplies, whether it’s model rocketry or solar-powered models, but each one of these customers is a little bit different. There are some that are going to pre-pay, some that will do business with a purchase order on terms, and others need product recommendations as a guide to help them through products for their students or campers. We used to make it hard for these types of organizations to do business with us, demanding that they would pre-pay or only pay by credit card. The reality of business is that customers will do business with you if they feel comfortable and in the way that they want to do business and if you’re not able to service them, they’re going to move on and find another place to do business or another place to get their supplies. So, I would say just make it easy for your customers to do business with you and they’ll be back and they’ll reward you for it.”

Practical Ecommerce

Practical Ecommerce

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Comment ( 1 )

  1. Kelly September 17, 2009 Reply

    Hi Ken – I’m pretty much on the same page as you with respect to customer experience testing and in general your common sense approach to business. I decided to check out your site and wow do you have a great line up of products. As a Canadian, I tried your "international checkout" option and I see you’re using a 3rd party payment processing and (I think) fulfillment firm. I’m wondering however, why shipping is often more than 100% (nearly 150% in this case) of the cost of the product … before duty and taxes? As a Canadian online shopper, I can confirm that while we pay a bit more for cross border delivery, this is extreme. How are you finding international orders?