Below are answers to questions from our “Building a Successful E-Commerce Business and a Great Legacy During a Crisis” wegginar® on June 3, 2020 with Miranda Isaakidis (pictured far right), founder and CEO, Indulgence Spa Products.
W = wegg®
M = Miranda
W: Did you pivot your e-commerce business during the COVID-19 crisis in terms of marketing or product offering?
M: I did. My focus had previously been on our wholesale market and the ecommerce site was more for information and casual sales. Now we are paying a lot more attention to our social media efforts, following up with previous customers and creating product packages that are more affordable. We also built our shop presence on Facebook Business as an added outlet for our products.
W: What habits should an aspiring entrepreneur adopt during the pandemic?
M: Times of disruption and chaos inevitably bring with them new opportunities to be explored. I would caution though against the trend we have seen in South Africa were people are invested hard earned cash chasing a fast buck in the PPE sector. Some people will win, but many more will lose their investment if they don’t get the timing right. Focus instead on your strengths and passion to find a niche in this new economy.
W: What are some ways we can paint a positive picture for people to buy made to order items online that may take 6-8 weeks to make?
M: Some things in life are just worth waiting for! I think it they can pay a deposit and are not expected to pay 100% upfront, that would help. Then to keep them happy, it would require weekly communication – so they don’t feel forgotten. Create some excitement and anticipation. Look at the model and story I mentioned for www.threadsstyling.com
W: Are you looking at new suppliers as a result of the global pandemic?
M: I have – cost cutting is necessary and not just in the short term. I have looked at all 3rd party service providers and compared prices with other suppliers for our raw materials.
W: How are you keeping your employees safe and enthusiastic?
M: We only started working as a team at the beginning of June and it looks like a space station in our workshop! We split our team and they work on alternate days. We are all very careful with social distancing, wearing masks and sanitizing the workshop at the end of each day.
W: How do you arrive at a customs duty (value-added tax)?
M: Customs Duty is different to a value-added tax (VAT). Each country has its own tariffs they charge and depending on trade agreements they may have , the same product imported for one country may have different duties to another. For example, candles imported from India into the USA are free of duty but the same product from China I believe attracts 108% to help protect the USA candle industry and prevent dumping of products. VAT is a tax imposed on local citizens and both the customs duties and VAT would normally be paid by the importer of your products. Check this link to find the Harmonized Tariff Schedule: https://hts.usitc.gov/. Once you find your product, you will have the universal heading that applies for the product and that will enable you to search what the relevant duties would be in any other country. The duties charged by each country will differ.
W: Will you use Artificial Intelligence (AI) at your company to tag products and how will that benefit your organization?
M: We are not using AI at the moment, but will certainly continue following the development of it. The way AI could help would be that we can show beautiful lifestyle shots on site and the theory is that the photos and items within the shots would be searchable.
W: How did you come up with the $20,000 on your first supplier payment and how did you send that money to the supplier?
M: I negotiated with the supplier in China and bought 1,000 gowns, instead of their usual requirement of 3,000 minimum. They sent me an invoice and we paid a 50% deposit using foreign exchange facilities at our bank. Generally, manufacturers don’t accept credit card payments. To secure our shipment, we released the final payment only on receipt of the Bill of Lading, showing that the goods were on the ship. There is still risk at this stage though because you know they are shipping something but you are not sure of the quality. Our supplier sent us many photos of the products and the actual shipment before it left their factory.
W: Would you be able to do print on demand with the Facebook shops?
M: As far as I know, Facebook shops do not offer sales of anything digital at this stage. It has to be a physical product.
W: Do you have distribution partners in other countries? How are you getting most of your traffic to your website?
M: We don’t have distribution partners in other countries. We get a lot of inquiries from guests at hotels who see our gowns and want to buy them. We make sure that our website appears on all our products, including the labels in our robes. We get leads from Facebook and are now focusing a lot more on Instagram.
W: What are are the most popular items you are selling?
M: We do well with our gowns because we don’t have direct competitors for these particular gowns. Our candles are a great add-on product because our gowns last so long, we needed to find a way to stay in touch with our customers more frequently. We have gained a lot of market share by offering to customize our candles and fragrances for spas but we do have a minimum order requirement to do so. Of course, it’s time consuming, but it differentiates what we offer.
W: What’s the best way to go about pricing your products so you make a profit after all is said and done?
M: Check, check and then check again. You need to include everything into your costing, including boring items like electricity. If you have an accountant, ask them to check as well but they can only advise on the information you provide, so at the end of the day, you need to do the calculations yourself. You also need to do some research on what similar items are selling for, find out what the normal markup is for the industry and reverse engineer the process. If X is the retail price and the store must make Y margin, work out what you need to sell it for and be honest on what your costs are. Its tricky. Stick to your guns to make the margin you want, or determine whether you need to be a little more flexible to achieve the volume you need to make the business viable.