October marks three months since we started Ancient&Modern and this is what has happened so far...
Why start an online business?
For me it was because of a sudden redundancy which shouldn't have been a surprise, but was still a shock when it happened. I didn't want to sit around thinking about what to do next so I decided to start a new business that day, and from that moment I was focused on the future and the redundancy was a thing of the past. A great memory I have of this time is my neighbour coming over that first weekend with a bag full of pies left over from his son’s cafe. The pies were a practical gesture that came with the advice to cut back on expenses the day you lose your job rather than waiting till the money runs out…we feasted on nothing but pies that weekend, and accepted quickly that we would adjust to the circumstances. No need for any motivational books or tapes after that.
Deciding on a name for the website?
Deciding on good name for the website is not easy because all the really good ones you can think of are already taken. So cast your mental net a bit wider and try variations, side tracks, back tracks and then check www.godaddy.com to see if its available, and then keep going until you get one you like. The process is actually great fun and I could quite happily have done this for weeks but couldn't afford to procrastinate so went with my favourite after the first day . Eventually I settled on www.ancientandmodern.com.au and I’m still not sure I like it, but I don't dislike it. The ancient and modern came from an idea about furniture having ancient qualities that never change (emotional connection, proportion etc) but modern developments keep things interesting, or something vaguely like that.
What to sell?
In the past when I’ve been making furniture it was always the product that came first and then the requirement to sell it. This time its going to be back-to-front and we’ll build the shop first and then hopefully down the track, we can get back to the making again. Furniture is known as a difficult online proposition because its so tactile and notoriously difficult to transport so we will just try to make it as simple and easy to purchase as we can. We've started with a broad selection of styles mixing both locally made and imported product from makers and factories Ive worked with before and will see what works best for our customers.
Locally made is great because we can put product photos on the website without having to buy stock, and then make to order. But its going to be hard without a showroom to communicate the full story around these bespoke pieces.
Importing directly requires a container order from a factory which costs approx 20k and then a wait of 2 months for it to arrive. If we are lucky the products will already have good photography so we can get them on the website before the container arrives. No middle man this way and great value for the customer, but expensive for us to buy and warehouse.
Imported product bought locally from a wholesaler is another option we try. The end product is more expensive as it has the wholesalers margin, and it wont be exclusive, but there can be a great selection and again, no need to buy stock.
To get the ball rolling I committed to 2 imported containers and just about used up all the redundancy money. No turning back now and I need to get some money coming in, so the next step is getting the website up and trading as soon as possible.
Setting up the website
I kind of knew that whatever ideas I had about the website before we went online would change after we went online, so I didn't want to spend a lot of time and money on website design at this early stage. I just want it to look good, function well, be safe and secure, and be cheap to set up. I decided to try www.shopify.com templates and got a basic website up and running in a few days for free using their trial offer. They had a “help guru” chat function which got me through the tricky parts but overall it wasn't too difficult and providing you start with quality photos the results can look surprisingly good. The most time consuming and important thing was making the photos consistent with the look and feel of the site. I needed to buy a program called Pixelmator which is a cheaper version of Photoshop to do this. Setting up a merchant accounts with the bank isn't necessary as the payments go securely through Shopify for a small fee.
Getting that first customer.
Within a week the website was online and the business plan was: Try to get one customer in the first week, then 2 in the second week, 3 in the third week and then take it from there.
How hard can it be to get 1 customer?
Well the next 7 days tick by pretty quick and we get no sales. Making things worse is that I've told friends and family about the brilliant plan for 1 sale in the first week etc and now they are ringing me up and asking “how many sales”. I can tell the truth or I can lie. I try the truth but it gets me down, so I lie but that feels worse, so its back to the truth. Sometime late in the second week we get our first sale but by then we are already a week behind the schedule. Forget the schedule.
How to get more traffic to the website?
This was always going to be something that we needed to learn as we went along. There are so many types of google advertising methods to get familiar with, then there’s Instagram and Facebook ads, and we are not really expecting any organic search traffic in these early days. Basically we pay for every click, and hope that the cost of the clicks required for a purchase is less than the profit margin on the product. We need a low cost per click or a high conversion rate, but at this stage we have no idea how many clicks it takes to convert into a sale so we just have to watch and learn. We think that people clicking on images are at least happy with the look of the product and so we focus on image based rather than text based ads. We are still learning the ropes but our experience so far has been that Facebook, Instagram and Google Ads all cost about $1.50 per click but if you work on a more targeted audience and a better presented ad, it can get down towards .80c per click. Then its all up to conversion and thats seems to be dependant on how well the landing page relates to the ad that got the click. In the first month we could spend $100 per day on Google/FB/IG ads and get less than 100 visitors per day to the website. Recently we've been able to get that closer to 200 visits per day on the same budget. Conversions are improving but we are not sure exactly why. Our conversion has come down from 1 conversion per 1000 clicks, to something closer to 1 conversion per 100 clicks. Its easy to see what customers are doing on the site but not always easy to know why.
Office, shop, showroom or warehouse?
Almost every online retailer is opening shops and our experience so far suggests we should too. Some customers are happy to click and buy but many want to come and see the product first. If only we had a showroom, but we cant afford one yet and so we make do with a co-working office space and rented 20ft containers by the docks for storage. I’m lucky to have www.kindredstudios.com.au around the corner from my house and storage around the corner. Kindred have a co-working office which is a great space to work from with a cafe downstairs and I’m more than happy to meet customers and suppliers there. Theres a group of coders, festival promoters and designers that work here and it’s kind of like a normal office but without the politics.
The co-working membership is $350 per month and the 2 shipping containers cost $330ea so the basic overheads of the business are approx $1000 per month. Its not very efficient as I often have to go get product from the container then bring it back to the co-working office, and I also I have a bit of a phobia about getting accidentally locked inside a shipping container, so in time I hoping we can afford a showroom and warehouse.
Pop up shop
Without a permanent showroom the popup shop is a workaround solution. We found a shop in Richmond through www.temporium.com.au and set up for the weekend. Our popup was on the same weekend as Kanye’s and while he kind of showed us how its really done, ours was successful on a much smaller scale. It boosted our sales for the week and gave us the opportunity to meet lots of customers face to face. We also boosted our subscriber base by running a door prize competition. The setting up and then packing up all the furniture was a huge task and one of the learnings was to run the popup store for at least 2 weeks next time. Most of the videos you see on the website came from when we had the product set up during the pop up.
Among other unexpected benefits from the popup was development of a better (i think) logo by accidental arrangement of some recycled timber doorstops we made as giveaways.
Sales start to increase
Somehow in our third month, without having any mind blowing revelations or making any huge changes, sales have started to increase significantly. We haven't increased our advertising budget and our traffic is still only 100 or so visitors per day but our conversion is suddenly getting much better. 2 months ago we were getting a sale every week but now its closer to a sale every day. At first we didn't see any sales from our Facebook ads but then something went wrong with our Google ads and they suddenly stopped appearing, so as a back up we had to increase the spend with Facebook and since we have done that the sales have increased. One of the frustrating things with the website is not being certain whats working well and whats not, as the data sets are not really large enough to draw significant conclusions from.
The sales over the last month give us confidence that we could open a store in the future if we find the right location so a lot of thought is going into that project. Meanwhile on the website we think that if we can give customers more clarity about what they are actually buying then our conversions will increase further, so thats a big focus. Expect to see a lot more video on each product, from opening the box to assembling and using the product. The core of the Ancient&Modern business is selling great quality products at the cheapest possible price. We know thats what our customers want so we will stick with that formula until we can think of a better one.
Looking forward to next three months.....