Forum Moderators: buckworks
I thought it might be interesting to share some of the experiences as I venture into this project. Perhaps to see if the advice I give out here actually passes muster. Maybe it'll give you a laugh. For context sake: target market is continental USA. Not shipping to Alaska or Hawaii yet. Here's the first installment of this adventure.
Fri Sep 25, 2009 - Informed the funding has been approved. Up until this time I'd just about given up on the project. The planning has some fuzzy numbers on paper and a ton of concepts but nothing built nor real. Calls to my team to let them know. Much celebration before reality sets in. Press conference on Tuesday.
Thu, Oct 1, 2009 - Meet with grant administrator and go over the paperwork. Receive copies of the paperwork I'll need to fill out on a monthly basis. Stay up late working on a bullet list of items I want to include in the contract with the vendors. Success of this project is measured in jobs saved and created - the vendor's jobs. I think it's imperative to be clear what I expect of them to ensure success.
Fri Oct 2, 2009 - Phone calls with marketing team to discuss what we'll need and can get done before Nov. 23. Print advertising is out the window for this year - deadlines were 3 months ago. Too late even for winter editions of the target market. Decide to focus online. Research the websites of the print media and begin prelim list of possible slots for advertising. Make sure Twitter account is resuscitated and active. Begin to develop idea of code that displays a seal of support for the project - that anyone can download. Pulls image from our site and provides link back to us - for tracking of course. Work estimates for costs between now and end of year.
Sun Oct 4, 2009 - Meet with man soon to be the ecommerce manager and customer service rep. Am told he's taking a job in Texas. Tells me he'll stay till end of year to help get through the crunch. Much appreciated - I feel my heart rate begin to slow.
Meet with server and network engineer (friend) and discuss shipping. Yea, shipping. Shipping as a cost will be included in the price of the products. Formula worked out and vendors are aware of it. Concept is standard drop shipping with a slight twist. Instead of the vendor shipping products out on their account (if they even have one) they'll use ours. All they need to do is fulfill the order and print out the shipping label. 1st problem - all of the order management software we've reviewed has the ability to generate POs for drop shipping but NONE can go the last step and create individual shipping labels for the drop shippers. It's nearly 11pm when we decide StoneEdge might be a good place to start and ask if they can customize to suit.
Mon Oct 5, 2009 - Submit contact email to StoneEdge and request phone call. Call all of the initial 16 vendors personally to let them know we're moving forward and fast.
Get a call back from StoneEdge and am told it's not an option. Ask about customization and am told that they might be able to do it but are booked for the rest of this year. Get name of another outfit that can customize their code. Not happy but understand. Meet with lawyer to give her the list of items I want in the Vendor agreement.
Continue discussion re: shipping with engineer. Brainstorming options. Cart selection is ShopSite for many reasons. I don't have time to deal with spaghetti code and want the peace of mind that comes with a hosted solution. Submit paperwork and estimates on initial funding for the year. Is $35,000 enough for everything? I hope so. Receive rough draft of vendor agreement from lawyer.
Tue Oct 6, 2009 - Meet with ecomm manager. Go over the vendor agreement and begin to draft Terms and Conditions for vendors and customers. Draft vision statement as well.
Meet with design team and get them started on logo development. Hot items for them include logo, business cards, and the seals of support.
Wed Oct 7, 2009 - Don't like the language of the vendor agreement that explains our take from the sale. Fix other areas that I don't like easily but this one doesn't feel right. Revisit concept of additional revenue streams through ancillary services like hosting and website design/development services for vendors.
Thu Oct 8, 2009 - Begin bullet list of hosting services idea. Talk it through with a few vendors and receive positive response. Still working on vendor agreement.
more to come...
[edited by: lorax at 1:31 pm (utc) on Dec. 7, 2009]
We have 14 vendors on board with approx 7 products each. We've intentionally kept those numbers low for the launch even though it is the high point of the buying season. Most of these vendors are already flat out with the season. There will be extra stock on hand after the holiday season. That's when I expect we'll see a large rise in the membership.
Oh and then there are the ancillary services that I've been working on as well. Recurrent revenue is nice to have - even nicer when it comes from multiple sources.
Next up. Link building.
Update. Traffic is about where I expected - low. No sales as yet - which is actually ok given we weren't able to launch the site until late in the game. After some lengthy discussions with peers, I've set 5 goals for the site as it turns 1 year old (let's just say December 1st, 2010).
1) 100 vendors on board
2) 50 jobs saved/created
3) 700 visitors/day
4) 100 solid backlinks
5) and most importantly - $10,000/mo in sales
Reasonable or not? What say you?
The important thing is you have goals. Gives you something to shoot for.
Good luck with it! Launching a new site in this day and age is very difficult.
Sshhhh... don't sound so reasonable. ;) I'm baiting those that would rather analyze the numbers to death than look at the big picture.
2) 50 jobs saved/created
...
5) and most importantly - $10,000/mo in sales
I don't follow the math.
10,000 / month in sales is ok for a 1 man show operating on 30-40% margin.
How would $10K in sales save / create 50 jobs?
At $100 per month, your vendors will loose interest.
If you had a high street store where 700 people walked through the door, would you expect to generate $300 in sales per day?
The jobs aspect is part of the grant that funded this project to begin with. Since this was a grant from the USDA then I need to be sure to save/create jobs. It's measured by letters stating how many jobs saved/created from the businesses within the area covered by the grant administrator.
re: 10K => 50jobs
Good question. It's a swag for the most part.
re: $100/month.
You're right. I should shoot for $100,000? - which is far more than they're earning online now.
I've been moving at such a quick clip that I haven't really had time to reflect and plan the numbers. All kidding aside. I honestly don't know what to expect. The goals are a milestone but they don't reflect the larger picture of what this project is about. The larger goals include the job creation but it's also an experiment in online social networks and steering them to do something they don't seem to do on their own - very well like work together - for the benefit of the group.
These vendors are all spending money and time trying to rebuild the wheel and failing at it most of the time after spending a lot of $ to get there. My thinking is what if I step in and corral them, along with their PR, backlinks, traffic, keyword rankings, etc... and then implement a plan that coordinates all of the websites for a set of common goals? IF we work together - we all benefit.
Vendor A: Annual turnover $300K, now look at 5% of their business moving online in year 1 and perhaps 10% in year 2.
Each vendor's profile will be different. Some will have products that appeal to smaller markets and some might have products that appeal nationwide. Similarly, each vendor's products might have a different cost associated with marketing / PPC etc.
We're working on next lever items now.
