Lessons Learned: Wholesale Butcher Becomes Prime Retail
Australian Paul Tory studied accounting after leaving high school. But after “two very boring years,” he realized the profession wasn’t for him and decided to try a trade.
He undertook a motor mechanics apprenticeship for five years before his father invited him in 1998 to join the family’s Sydney beachside-based wholesale meat business, Total Meats, which was established in 1979.
The business sold its meat products wholesale to restaurants in the Sydney region. But friends and family were keen to buy their households’ meat from Total Meats, too.
“Our friends and family had started coming directly to our factory although we had — and still have — no formal shop or serving counter for the public to buy their meat,” Tory said.
“Soon people started turning up, asking if they too could buy their meat from us. Then one of our regulars asked if we could deliver to her as she saw our branded vans regularly passing by her house.”
That gave Tory the idea for a retail meat home delivery service. After investigating the idea, he realized that no one else was doing it well. He decided to enter that business, using a website for consumers to place their orders, which his company would then deliver to the Sydney area.
Before he launched that website — called Butcherman — in November 2007, Tory launched Total Meats’ wholesale website — using a company that advertised websites for $400.
“Needless to say, you get what you pay for,” he laughs.
“Our Butcherman website allows us to be retailers without the cost of a setting up a shop. Plus, we use the existing infrastructure from Total Meats, including the factory, fridges, equipment, and vans. We also had butchers, drivers and long-established relationships in the meat industry.”
Tory’s wife, Georgia, helped him build the original Butcherman site. Both are the only original employees who have been involved from the start.
“At the end of our first full year — December 2008 — we had a turnover of $320,000. By the end of 2010 it was $750,000 and this year we are on track to turn over $1,300,000,” Tory said.
“We met three web developers and told each of them our vision. Company number 1 stood out as the most impressive with the best ideas and the most experience in setting up similar businesses. So of course we went with company number 2, the one that was less expensive and ‘almost’ had what we were looking for. We had this attitude of, ‘It is more than good enough’,” Tory said.
“But saving a penny in the beginning costs many dollars down the track! We discovered that our site had many limitations. The diagnostics were very poor and the site was very hard to self-manage. I had to ask our web company for everything. Changing delivery addresses or adding items to the cart couldn’t be done from the backend and our original web developers were very friendly while building the site, but very unhelpful once it was up and running.”
Butcherman currently uses osCommerce, an open source shopping cart. But it’s changing to OpenCart, another open source cart.
“We have since upgraded our site twice and are in the process of a third change [to OpenCart] as shopping carts are an integral and essential part of our business. In hindsight, it would have been better to step it up in the first place rather than having to reinvent it again and again.”
“I work with Digital Finery who I found via Google in 2008 when I was looking for web developers who were geographically nearby who provided personal service. But I am the in-house tech person: I am intimate with the website’s workings and can competently navigate the back end of our site,” Tory said.
Credit Card Payments
Butcherman uses Australian payment system Eway as an intermediary payment gateway.
“Credit card payments are verified instantly without exception and the money is transferred to our account within 24 hours. We do not store any credit card details in the backend of our site. All the information is on the Eway website. It is trusted by customers and it works for us well.”
Tory wasn’t aware of PayPal when he began the Butcherman site.
“Now I have an account with them, but I can honestly say that I haven’t had a single request from a customer to use PayPal, nor a complaint with our current system,” Tory said.
“We use osCommerce, our current shopping cart, to manage orders. Our butchers start work at 3 a.m. — two hours before I arrive — and at the press of a button a daily product list is printed out. This lists every product that needs to be prepared for the day, so that if there were 20 orders with different products, the list would group them to say that there were 10 packets of rump, five packets of mince, and so on.”
“Then we print out individual packing and delivery slips. Only when the daily product list is completely finished do we pack the orders. In this way mistakes are reduced as the daily product list never lies. Like fixing a car, if you put it back together and you have a few bolts left over, you can be sure that you have done something wrong. Having a sophisticated backend of the website makes it all so much easier and reduces the chance for errors.”
“Digital Finery [an Australia-based development and hosting firm] hosts our website.”
“We were fortunate to already have an established staff through our wholesale business. We began with one manager, two butchers and two drivers and our online business has grown to take on an additional butcher and two more drivers.”
When Tory first considered the idea of home-delivered meat, he Googled it.
“Much to my delight there were not many matches to my search. Five years on, with only a modest amount of money spent on search marketing through AdWords and the advice of SEO company The Defectors, we are ranked number one or two on Google in our field. If you Google plumber or dentist, the results go on for pages. It’s a much tougher prospect of making it to number one for them.”
“We started with Google AdWords, but only for as long as it took to organically go up the Google searches. Since then we have tried everything from flyers, radio, television, pay-per-click advertising, bulk buying sites, and social networking. After five years I have concluded that for an online business you need to focus the majority of your advertising online.”
Tory markets his website through the Butcherman email newsletters which go to his 7,000-strong database. He also uses Facebook.
“We have also targeted mother and baby sites as stay-at-home mothers make up a large part of our customers. Press is almost a waste of time unless you are [national Australian furniture chain] Harvey Norman with a full page weekly ad: it simply does not bring a worthwhile response for the money spent.”
“We employed a public relations agency called Men at Work Communications and are spending $3,000 per month which is a cost-effective way to get into the media. As most publications have an online presence, these articles create additional online references and content, which improve our search results and search engine rating. Social media advertising, such as targeted marketing on Facebook, allows you to narrow down your audience (e.g., women aged 35 to 50 who live 10 kilometers from the city and enjoy meat), which makes it low cost and effective.”
“We have a Facebook page and are about to launch Twitter. We have a YouTube clip that also appears on our home page. The Defectors manage these for us and are continually updating our page with recipes, cooking tips and any useful tips, as well as starting competitions, and surveys. We have targeted new customer sales through Facebook — with success.”
“Currently all deliveries are done by our drivers. We have four vans on the road every day and combine our wholesale deliveries with our home deliveries. Looking to the future, I have met with refrigerated courier companies to deliver outside our current zones. Beyond that, franchising could be an option.”
“We use osCommerce’s built-in inventory management. But we are in the process of changing to OpenCart, another open source shopping cart. This will allow us to run our two sites — Total Meats and Butcherman — through the one back end.”
“We use MYOB and have found it adequate in every way.”
“Service is everything. Mistakes happen, people will always have a gripe and things will never run smoothly 100 percent of the time. The way you deal with these problems is what makes the difference. If our delivery drivers are running late, they will always call those effected customers. All emails and missed calls must be answered as quickly as possible. I have received great compliments from customers who were very impressed there was a person on the other end of the phone. I am frustrated by websites that only allow correspondence via email.”
“The biggest mistake was our first. We built our first site without enough vision to the future and underestimated the value of a backend with diagnostics and analysis features, as well as functionality. I often joke that the backend of our site is our most valued and reliable employee.”
“In 2010 we were invited to enter the My Business Awards, which are sponsored by My Business, a Sydney magazine. In only our third year, we won the award for Sydney’s best ebusiness.”