Business Succeeds with Nutritional Supplements

Peter Hitesman was a loan officer for a banking institution in what he would consider his past life. It was a job that required an extreme attention to detail, intense customer service, and often times long hours. But he traded that all in one day for a new life as the owner of his own company, which means that the long hours, intense customer service, and attention to detail are his choosing. Now what goes to the bottom line of his rapidly growing ecommerce business,, belongs to him and not to some stockholder, manager, or CEO.

This Livermore, California web merchant had a passion, which is half the battle in anyone’s league. Hitesman was (and is) a passionate advocate for those interested in premium quality nutriceuticals and nutritional supplements. In his search for such products he found a gaping hole in the market, and has managed to capture $600,000 out of that hole in the first year. Hitesman has the makings of a success story.

Back, not quite 12 months ago, I was personally frustrated in trying to find the products that I wanted and I’m a picky buyer—a picky user of supplements—and the ability to find and buy high quality products in one place and have an easy transaction just didn’t exist. So, having a little background in ecommerce and business, I decided to try and make the business better.

PeC: What was your ecommerce background?

I had written a book on home equity borrowing and started a little website to sell the book. I discovered there is a lot more to ecommerce than just throwing up a site. A lot of people think that if you put up the site “they” will come, and, of course, nothing could be further from the truth.

*PeC: So you took that lesson and set out to change the world of supplement sales online. When did go live? *

The site went live in the third week of February 2005. The concept and planning preceded that, but we went live in February.

PeC: Let’s talk about that pre-launch planning period. Some people make it woefully short; others plan the project to death. What was your strategy?

To be honest mine was woefully short (2 months), but well thought out. The unfortunate thing, sometimes, about ecommerce is that a lot of folks think it is a way to get rich quick—put up a site and the money will roll in and they won’t have to work. Of course that’s not true at all. What I learned was that you have to do so serious thinking. Consider your value proposition in the marketplace. What are you offering that other people are not already offering? How can you do it better, faster, more securely, or for less money? Think through the concept; don’t just have a great idea. Great ideas are a dime a dozen. Once you have thought through those things then it’s time to get the business up and running.

*PeC: In that planning process you obviously thought about the products you wanted to sell. Since it was difficult buying what you wanted retail, was it difficult to line up the products you really believed in? *

That’s a key question. Choosing those products is critical to someone’s business and how they market the business. For me, it was easy; there were a couple of suppliers that I personally had a very high regard for. And what I discovered, in the supplement business, was that on the edge of quality—the very best products in the market—is where I found manufacturers who were not very strong in marketing. The products were superb, but these people are scientists, not marketers. So my first approach was, I use your products, I love your products, they are the best out there, I have a great concept for marketing them and reaching the public, would you be willing to take a chance on me and open up a wholesale account.

PeC: So you approached them more from a position of a potential partner and not as a potential retailer.

I’m convinced that building partnerships with your suppliers is critical for any business that wants to succeed, especially in ecommerce. We have a partnership relationship with all of the suppliers we work with—it is absolutely critical. By having a close partnership with your suppliers you have a greater exchange of information with your suppliers, which, in turn, allows you to pass along greater value to your customers.

PeC: So here you are with a new business, a new line of products and a new website. How did you get people to come (to the website)?

Early on, I knew that natural or organic search results were going to be critical. So I was careful when I shopped for a shopping cart/ecommerce vendor. I wanted the system to be search engine friendly. That was one of the most important things on my list. Furthermore, I knew it would take time to achieve the rankings, because some of my products were especially competitive. So it was obvious that a good pay-per-click campaign would be critical driving business to the site. I started with Google Adwords; I didn’t use any of the others at first. After several months I figured out how to use pay-per-click and not go broke. That is almost a business in and of itself—learning how to use pay-perclick ads so that you get a great return on investment instead of just blowing your entire marketing budget and not having anything to show for it. I think it is critical for any ecommerce businessperson to be well versed in both SEO and pay-per-click strategies.

PeC: Now, you also did other things to create brand awareness—tell us about your license plate frames.

(Chuckle) I had a little fun with my license plate frames. I have chrome frames with black letters that says (at the top) “Anti-Aging and Smart Drugs” and on the bottom “of course www.relentlessimprovement. com” I’m not sure it has produced any customers because it’s hard to track conversions from having a domain on a license plate frame.

PeC: The lesson is that a lot of ecommerce merchants don’t take their brand, which is their domain name, all the way through their media and materials.

Indeed, this would be another area where an ecommerce merchant would be well served to take some time to do a little learning on their own. When we started we cared little about branding the website. At that point the logo was developed as part of the initial website package. I did the business cards myself, nothing fancy. You don’t really need letterhead and paper because, after all, it’s an ecommerce business. With that said, in the past month and a half we completed a professional design project with a, who produced a new website along with a new logo and a brand identity, taking a big company approach. With that we produced a new business card and other materials. Then the branding of the website has been carried over to the new back-end system so that there is continuity throughout the whole shopping experience from homepage through the cart and the checkout.

PeC: So we’re up and running and customers are ordering products, tell us about how you met your fulfillment challenges.

I knew going in that I wanted to do my own fulfillment. I did not want to do drop shipping because fulfillment is part of the customer’s experience. How often do you receive that shipment, open that box and the product is just thrown in and the invoice is crumpled up to one side along with the wrapping paper? The presentation is just not good, it looks like whomever packed it just didn’t care. So I wanted to handle our own fulfillment. We use USPS Priority Mail for everything we ship, so that we have good consistent one to three-day delivery times. Furthermore, when the items are packaged they are packaged carefully with protective material. There is a self-adhesive bubble wrap bag into which the product is placed, which is transparent, and which allows the product to be presented well. In addition, we want our customers to know we really appreciate their business in a way that we didn’t think anybody else did. So when we have orders over $100, we enclose a special custom, hand-signed thank you card, which I sign myself.

PeC: With a company growing as fast as yours is, fulfillment is a huge job. Do you use any order management software to help keep that organized?

That has been my biggest challenge to date. The company has grown crazily, double-digit, top-line growth every single month and that has created a huge challenge in the back-end. There are a lot of solutions out there. The shopping cart we went with initially had a great many advantages, but as the orders continued to pile in there were certain features and functionality we had to have and we needed to be able to tailor the back-end of our system to meet our needs. So with growth comes the need to try different software packages. We did a lot of shopping and a lot of looking around and the product we ended up going with is from Nexternal Solutions. Their system is integrated with our website and the movement from one to the other is seamless. The Nexternal module not only functions as our shopping cart but on the very backend it gives us full order management capability. It interfaces with all the shippers; the payment gateway integrated, including PayPal. The system is user friendly to the merchant who wants to edit his pages and even has little help buttons that allow a pop-up to offer advice on a given function.

PeC: If that was your biggest challenge, were there any surprises in your first year?

Oh sure. But if you are looking at it the right way, if you are an entrepreneur, the surprises are merely your education as it is happening. It is an opportunity to learn and adapt to use those surprises to make what you have to offer to the customers better, easier, smoother faster, and to develop your own abilities as an entrepreneur to grow and manage the business.

Michael A. Cox
Michael A. Cox
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