“Lessons Learned” is a series where we ask ecommerce business owners to share their experiences, good and bad. For this installment, we corresponded with Andrew Thomson, co-founder and CEO of Lily’s Florist, an Australia-based site that links consumers in that country with their local florists.
Thomson studied hospitality management and business at TAFE, the college for Technical and Further Education in Australia. He then managed popular bars and nightclubs in the Sydney area. His wife Siobhan studied business at an Australian university, and then worked in marketing jobs for a Sydney-based boat charter company.
In 2006, they purchased a florist shop in Kingscliff, roughly 500 miles ( 800 kilometers) north of Sydney on the north coast of New South Wales in Australia. They intended to turn the shop into an organic store. But the florist had many customers, so they decided to retain that side of the business.
Thomson explains, “We arrived in Kingscliff, not knowing a soul, and not knowing what to do with ourselves. We had a passion for, and were interested in the organic business. We found a store on the main street of Kingscliff, which was a florist, and up for sale. As retail space in Kingscliff was at the time hard to come by, we decided to buy the florist business and convert it in to an organic store. We moved into the store in March 2007. There was some goodwill we purchased with the florist, and there was also an existing yellow pages ad in place so we would take these orders and have a florist who worked from home do the arrangements for us, and we would collect them for her and deliver them ourselves.
“We set up an ecommerce website for the organic store at the end of 2007. This site cost us $7,000. We had access to the content management system and spent countless hours every day and night uploading new products. We had roughly 1,500 products.”
In early 2008, the Thomsons decided to launch a basic “splash” website for Kingscliff Florist. The site cost $300. When they started receiving some orders through this site, they researched the idea of launching additional sites to cover other towns.
Early in 2009, the Thomsons sold the organic store, but retained the organic store website. They build more and more florists sites, and sold the organic site July 2010.
Thomson said, “We soon saw that there was a market to capture online flower orders. So we decided to set up other websites around Australia. We now have over 30 major city-specific websites across Australia plus the parent website, Lilysflorist.com.au, where we have over 200 micro-sites for the smaller towns and suburbs across Australia for customers searching on Google. There over 150 feeder websites that forward potential customers to our national Lily’s website. We have gone from one or two orders a day, making $5,000 in 2006, to turning over close to $2 million in 2012, and have projected turnover of $3.5 million to $4 million by 2013,” Andrew says.
He admits they had no idea about the business of floristry, Internet marketing, web development and search engine optimization. “Everything we know has come from hours and hours of research and trial and error. It was a very steep learning curve. We have learned that no business is an overnight success.”
Andrew Thomson shares his experiences below.
“Our first web design company charged $7,000; the monthly hosting fees were exorbitant and we couldn’t connect the website to social media platforms.
“After countless hours researching on Google for a company that could provide us with an ecommerce site, we found Ashop Commerce, which gave us a 10-day free trial, and with it, we found our solution. We could build a store and have it hosted from $24.95 per month for 50 products, to $249.95 per month for 10,000 products, with 24/7 support, and any upgrades passed on to the merchants for free. The list of features is quite astonishing.
“Most of our customers order online outside business hours, from overseas or from work. Without an Ashop Commerce store, our business would never have grown at the rate it has.”
Credit Card Payments
“Eway [an Australia-based credit card provider] handles our online payments. We can also manually enter credit card details if a customer phones in an order. It has a simple reporting system and excellent online and telephone customer support.
“Originally, we didn’t know to ask for lower bank fees. Most banks charge the highest possible rate (2 to 3 percent) per transaction. But as your turnover increases so does your bargaining power. Now, excluding American Express, we pay 0.8 percent per transaction.
“But for each transaction, your payment gateway provider also takes a cut. Yearly plans give you some transactions for free, and then you can pay as much as 60 cents per transaction. When you start your business you are generally cash-poor and can’t afford the higher premiums. But you should pay for plans that give you the lowest transaction fees. In the long term, this will save you a lot of money.
“We also use PayPal. The transaction fees are higher, but there are no setup or ongoing fees. As one of the world’s most trusted payment methods, PayPal can help your conversion rate if you make it available.”
“All our websites are hosted by Ashop as part of the monthly plans they offer, which is one reason they are such an attractive option for new businesses.”
“We hired our first part-time employee in 2007 and first full-timer in 2009. We now have four full-time staff, including two wonderful, trained florists. Their knowledge is invaluable.
During peak times — such as Valentine’s Day and Mother’s Day — our turnover in one day is equivalent to a normal week’s turnover. So we contract more staff during this period to help out.”
Search Engine Optimization
“In my opinion, no SEO company globally knows the ‘secret’ to ranking higher, despite what it says. Most ecommerce software solutions have embedded great SEO rules into the templates they have prebuilt for customers. This should be your first point of call when it comes to SEO.
“Most of our SEO, beyond Ashop Commerce, has been done in-house by several years of trial and error, and by countless hours of research. Google Webmaster Tools is a great way to start.
SEO comes down to good quality, 100 percent original content, having a fluid website, using easy to understand language, knowing your target market, understanding how to apply keywords to your website, choosing a URL for your business that contains keywords — this is super critical — the age of your URL, and the amount of websites linking to yours.”
“We act as a middleman between the customer and the florist. Each florist has its own reliable courier service.”
“We started with MYOB and still use it. Once you are up to speed, it is very easy to use and offers a great reporting system for your business.”
“It was not until we discovered Ashop Commerce — and how it can easily combine with Twitter, Google+, and Facebook — did it develop. More important than new business owners think, social media can be difficult to manage if you have multiple Twitter and Facebook pages. HootSuite lets us manage our social media from one location. It has a small monthly cost, but will save you a vast amount of time logging into and switching between accounts.
“Social media is a must. Just be careful what you say, how you say it, and how often you say it. Less is more.”
“You can’t control your expenses when you don’t know your business. The quickest way to make more money is to reduce your expenses. Since we do not deal directly with the public, we built an office within our home, which keeps costs down. We also buy stationery items in bulk, always fight for a better deal on bank fees, and do as much SEO as we can internally.”
“My wife and I are fully hands on. Rather than a call center, we take orders in-house and employ florists who know the business intimately and can offer their expert advice to customers. Being a high volume business, a fair portion of our employees’ days is dedicated to dealing with customers. We aim to get it right the first time. An extra minute spent now will save you at least 10 minutes down the track.”
“One of the bigger mistakes we made was paying a website design company a huge amount of money for a website that simply didn’t work for us. I only wish we had found Ashop Commerce sooner.
“We have come from humble beginnings, and in the start, we were losing money on most orders. But this has taught us some valuable lessons about the economics of running our own business. Our biggest financial mistake was not properly understanding profit margin. If we received an order for X and it cost us Y – then how much profit are we left with after paying our costs?
“Initially we overcomplicated our website with long product descriptions and copy to maximize keywords. But the site looked messy and was difficult to navigate. Customers want their online shopping experience to be easy and uncomplicated. They don’t want to search pages and pages to find what they are looking for.”
“Seeing the business grow from one or two orders a day to hundreds a week over six years has been very rewarding. When we bought the florist shop we knew nothing about the industry. But it gave us a thorough understanding of how florists operate and we have listened to advice and feedback from our florists, the true experts. We have managed to couple this knowledge with web development knowledge and the outcome has resulted in a wonderful business, which we find both challenging and rewarding every day.
“Another success has been understanding the effective conversion rate, and what it takes to increase it. Increasing your conversion rate can dramatically increase your sales.
We gave all our websites a full makeover in October 2011. With the same traffic, our sales have increased by 30 percent.
“Almost everyone knows someone who has suffered from breast cancer. This cause is close to our hearts. The McGrath Foundation is one of the most respected, credible and well-recognized charities in Australia. We thought that if someone were sending flowers to a person affected with breast cancer, then how wonderful it would be to send them our McGrath flowers — to both brighten their day and support the cause at the same time. Donating money to the foundation has helped them to get even more recognition for their cause, and has helped to drive sales.”