Author: Elizabeth Ball Date Published: March 27, 2012
“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 optimisation. “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.”