It wasn’t until her youngest daughter attended pre-school that Melissa Perlman Chelist could help manage the small gift website her husband Barry and his business partner David had created two years earlier, in February 2003.
Trained as a special education teacher, Missouri-based Chelist had never worked in the business world. Initially, she had nothing to do with the company she now runs. Barry Chelist, an M.B.A. graduate who worked in telecommunication sales, and his partner, B.S.-educated David, who worked in the luggage business, bought a business in January 2002 named Hollow Woodworks, which manufactured wooden "name puzzle " stools for children. The pair began to sell the stools online. However, they found it hard to run the factory without being on site. So they sold Hollow Woodworks a year later, keeping the online presence only.
The pair then bought the domain name StorkGifts.com for $25, hiring a young Canadian developer to create a website to sell the personalized stools online, while they kept working full-time.
In February 2005, once her daughter began attending pre-school three mornings a week, Chelist took over customer service, which had been outsourced.
Three years later, Melissa and Barry bought out David, taking over full ownership of StorkGifts. Following her upcoming divorce from Barry this year, Melissa Chelist will be the sole owner of the company.
StorkGifts went from $50,000 in revenue in 2003, to $102,000 in 2004. The revenue at the end of 2011 was $300,000, which Chelist expects to remain steady for 2012.
All of this is done without actually purchasing inventory. StorkGifts operates a drop ship business model, so it has very little inventory.
“Only our personalized books are made in-house,” says Chelist.
StorkGifts has used shopping carts LoudCart and Able Commerce. Volusion, a hosted cart, will be its latest shopping cart system.
Chelist said that each subsequent cart automated more processes, providing easier administrator use and better search engine optimization opportunities. Each time something “broke” on one of the websites or they wanted to add another feature, it cost several hundred dollars or couldn’t be done at all.
“Able Commerce offered many challenges. Any time we wanted to tweak the site, we had to pay for it. By contrast, Volusion gives us an up-to-date website which will remain so due to free software releases and enhancements. Ease of use of shopping carts is vital to the success of an ecommerce site. It is far too easy for a customer to leave our website and go to the next one to order the same or similar product.”
Credit Card Payments
StorkGifts originally captured credit card numbers and expiration dates via its shopping cart but without real-time authorizations, transactions had to be hand-keyed into a credit card terminal in the office.
“In 2004 we hooked up with Authorize.net and a credit card processor to perform real time authorizations, which saved us about an hour every day.”
“We will switch to Clearent, a merchant account provider, which has lower credit card transaction fees than our current 3.5 percent, once our new website goes live. Unfortunately while our costs are lower with point-of-sales transactions, we are an online retailer so we never actually swipe the card, and therefore processing companies charge us higher rates. We also have no cash or check sales, so we incur processing fees on every transaction.”
“Originally, we manually entered orders on our vendors’ wholesale websites [to facilitate drop shipping] or we copied and pasted the order information to send the vendor an email order.”
With each subsequent website, StorkGifts has evolved its design and shopping cart.
“Now we automatically email the order information to the vendor or send the order directly into the vendor's XML order system. This again has saved much valuable time especially as the number of sales has grown.”
Chelist said StorkGifts’ original website allowed customers to enter name letter lengths that didn’t fit within the company's parameters for a personalized item.
“I would have to contact the customer to clarify the order and either upgrade to a different product and manually charge the additional amount or the customer would cancel the order altogether and I would have to refund their money. Now, nothing that doesn’t fit within our parameters can be added to our cart.”