Practical Ecommerce

Lessons Learned: Making Online Bed Shopping a Dream

When Sara Shikhman was 10 years old, she left communist Ukraine with her parents on a one-way ticket across the Atlantic Ocean, and $5,000 hidden in a set of screwdrivers, to become part of the American Dream.

Sara Shikhman

Sara Shikhman

Unable to speak or read English, her motivated parents helped her to learn the language quickly and soon she excelled at school, outpacing her peers.

Earning a B.A. in Finance from Pace University in New York in 2003, Shikhman was one of the first Pace graduates to earn a law degree from the University of Pennsylvania Law School in 2006.

“I thought that I wanted to be a corporate lawyer, and practiced for six years,” Shikhman said.

Living and working in Manhattan, she simply didn’t have time to shop for furniture for her new apartment, nor did she like being hassled by pushy salespeople in-store.

Around the same time, she was starting to find the world of corporate law too rigid and looked for another opportunity.

Shikhman, her fiancé, and two school friends who owned several brick-and-mortar furniture stores across the Eastern coast, saw an opportunity to use the friends’ existing infrastructure of manufacturers and vendors to sell furniture online.

“The four of us launched our website, BedroomFurnitureDiscounts.com, in 2010 with just $25,000 between us, generating $100,000 in sales our first year,” Shikhman said.

“By the end of 2011, our $3 million in online sales surpassed the sales of all of our partners’ brick-and-mortar stores combined, more than doubling again in 2012 to $8 million.”

Ecommerce Shopping Carts

Shikhman had no experience with online shopping carts and didn’t even know what that term meant at first. But she knew her company had to be highly specific with potential developers to get great results.

The four business partners wrote a 20-page specifications document describing precisely how they wanted their site to look, function, and link together.

Overall, it had to be as easy as possible for customers to use the website and to buy.

“We weren’t looking for a site that was going to win any design awards, nor did we have the budget to afford one. We needed to prove our concept before we ran out of money.”

The shopping cart had to work with one back-end and multiple online storefronts, it had be customized, and be inexpensive.

“Our first web developer suggested the open-source Magento Community Edition platform and this advice turned out to be spot-on as Magento, which was acquired by eBay in 2011, has become the leader in the web store platform arena.”

Shikhman’s other providers, such as LivePerson (which provides live chat and other dynamic user experiences) and TurnTo (which provides social Q & A), integrated seamlessly with Magento, saving her thousands in development costs.

Website Design

BedroomFurnitureDiscounts.com sought bids from five website design companies, awarding the development and design to Massachusetts firm Knectar Design.

“While Knectar wasn’t the cheapest provider and the process took longer than expected, we did receive a quality product for our budget of $20,000. Much of the structure and logic put in place by Knectar still exists today.”

Shikhman said her original site was pretty slow, taking several seconds for anything to happen. Moreover, the company didn’t advertise its phone number nor did it have a live chat function.

“Customers had no way to contact us quickly and by the time we answered via email, customers had already moved on.”

BedroomFurnitureDiscounts.com is currently undertaking a redesign to make its website visuals more attractive and user-friendly.

Credit Card Payments

BedroomFurnitureDiscounts.com’s average order amount is roughly $2,000, which is considered high risk by credit card processing companies who need to safeguard against fraud and chargebacks.

“Our provider, First Data, recently told us that they need to keep $650,000 [of our sales proceeds] in reserve at any time. The money is ours, but we can’t access it and we’re working with First Data now to reduce this reserve.”

BedroomFurnitureDiscounts.com offers a variety of payment methods, including Visa, MasterCard, Discover, American Express, Google Checkout, and it is currently integrating Amazon Payments.

BedroomFurnitureDiscounts.com

BedroomFurnitureDiscounts.com

Order Management

BedroomFurnitureDiscounts.com built its own patent-pending Streamline software about 18 months ago which includes order management, leads management, and vendor relations.

“It’s worked so well that other furniture companies have begun licensing it from us at TryStreamline.com, which has become a second revenue stream for us,” said Shikhman.

The Streamline software integrates with Magento, LivePerson, and Call Tracking Metrics making BedroomFurnitureDiscounts.com’s entire sales and ordering process seamless, organized, and efficient, according to Shikhman.

“It tracks and follows up on phone calls or chat messages, analyzes keywords through LivePerson’s keyword targeting solution to provide a lead for a sales person to follow up on, and our delivery partners can log in to the database to update orders.”

Employees

BedroomFurnitureDiscounts.com began with four partners and has grown to 20 employees in its New York headquarters, and 20 contractors around the world.

Search Engine Optimization and Search Engine Marketing

Shikhman currently spends 5 percent of revenue on Google AdWords and 1 to 2 percent on various other methods of advertising, including SEO and social media.

When the website was originally launched, the partners spent their entire marketing budget of $1,000 on Google AdWords, using generic keywords they thought would bring customers, only to get a grand total of zero sales in return.

“I’ll always remember the one customer we had over the first four months — we were emailing her all the time,” Shikhman said.

BedroomFurnitureDiscounts.com originally used Tangence, a marketing firm, for SEO services but ceased working with them due to a lack of transparency. It now conducts SEO in-house. Shikhman now uses Terrakon for keyword optimization services.

A year ago, Shikhman noticed that the marketplace was becoming more competitive, and the company’s conversion rates had plateaued.

“We had maxed out our monthly budget of $25,000 on Google AdWords and knew that we needed to do something more.”

She discovered LivePerson’s “Keyword Lift,” which analyzes her company’s search marketing campaign data and delivers targeted pop-up messages to her customers, providing the greatest potential to boost return on investment.

“The pop-up message is specific to each customer based on what they’ve searched for in the past, and appears at the right time, dramatically increasing conversions.”

In the early days, Shikhman spent an hour every week looking at and learning from her competitors’ websites.

“Sometimes I see new features on their sites that look and feel exactly like ones we have and I’m flattered by the imitation. I often check SpyFu and Compete.”

Shipping

Despite its name, BedroomFurnitureDiscounts.com doesn’t compete on price.

“Our advantage is great service, great shipping partners and quality furniture. We only sell products that we would put into our own home.”

Shikhman said her company cannot ship furniture through FedEx.

“This is not because FedEx is bad, but because furniture isn’t packaged to ship long distances on a truck where there are also refrigerators, stoves, and books. We only ship through companies that specialize in furniture shipping; these companies often end up being the most expensive.”

Typical orders have several cost components: cost of goods sold; freight through a specialty furniture carrier that hand-moves products instead of using forklifts to minimize damages; and a white glove delivery service that receives the order, inspects all items, delivers and assembles the furniture in the customer’s home.

“Our goal is to minimize any damages and maximize customer satisfaction. This is costly, but builds long-term value. This is where we want to differentiate ourselves.”

BedroomFurnitureDiscounts.com keeps its bestsellers in stock, and buys the rest from various vendors once customers make their purchases.

The order fulfillment process can take 4 to 6 weeks from the date of the order until the furniture is in the customer’s home, thanks to the multiple steps and vendors involved.

Social Media

BedroomFurnitureDiscounts.com encourages its customers to share what they’ve purchased upon checkout.

It has over 8,200 followers on Facebook; about a quarter of these interact with the company page daily and provide feedback and advice.

“We also have an active Instagram account where we post inspirational pieces — stuff that you wouldn’t necessarily put in your home but that inspires you to get creative no matter what your budget or style is.”

Shikhman cannot attribute specific sales to Facebook but knows customers check the company’s ratings online and visits the company’s Facebook page as they begin their pre-purchase “due diligence” thanks to the Assisted Conversions report in Google Analytics.

Expense Control and Accounting Software

“Every department prepares budgets for what they want to work on, and we review financials often to avoid spending more than is necessary. We don’t use any automated way to track expense control, but do use the financial ratios that QuickBooks provides.”

Customer Service

Even with the multiple online images, product descriptions and dimensions provided on BedroomFurnitureDiscounts.com’s website, not being able to touch the furniture prior to purchase creates a challenge for many customers.

Before BedroomFurnitureDiscounts.com introduced live chat in early 2011, customers could only contact the company via email, and the delay in response resulted in low satisfaction rates.

BedroomFurnitureDiscounts.com soon added its phone number on the website for sales and customer service, integrated live chat via LivePerson, added a social questions-and-answers feature via TurnTo, and built the Streamline platform for customers to track their orders, vendors to update their orders, and salespeople to manage their leads.

The increase in transparency and availability paid off.

“After about a year, we began seeing more and more repeat customers who became comfortable buying without any further contact or assistance — their prior experience had been so positive that they didn’t have any more questions or hesitation,” said Shikhman.

“We chose LivePerson chat because it offered easy integration, was easy to scale, and required no technical resources. It was so easy to install that our marketing intern installed it and he didn’t know anything about IT. People can log in from wherever they are, which is another benefit.”

Biggest Mistakes

Shikhman said one of her biggest mistakes was thinking she could train anyone to do a great job.

“I learned the hard way: to get top performance, you need to hire top performers. But the truth is you can’t always teach determination and passion.

“We hired the wrong people who simply weren’t performing as we expected. We’ve learned now what makes a good employee, and we’re better at hiring people up to the task. I still take time every week to coach and mentor our employees, which has proven to improve performance and boost morale.”

Biggest Successes

Shikhman is proud of teaching herself, — and then her in-house marketing team — how to get real results from Google AdWords, on which BedroomFurnitureDiscounts.com spends approximately half a million dollars per year.

“Now, you could wake me up in the middle of the night and ask me a question about Google AdWords and my answer will be as good as any agency out there. Optimizing our advertising is a continuous process that I enjoy very much.

“The remarkable results prove that it’s still working. At the same time our marketing team and I are always reading about new features, trying new things, and staying engaged.”


Elizabeth Ball
Elizabeth Ball
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Comment ( 1 )

  1. Mike Darnell March 17, 2013 Reply

    Great story. I’d like to invite Miss Shikhman to consider adopting product video on her website.

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