Archive for January, 2007

Flag Kit recently appeared in the Proudly SA Magazine. Guy, the PSA Inspector puts our company to the test…

The success of the Bug Zapper has been most due to the great word-of-mouth/viral potential that the product carries. Your friends see you using it on your weekend camping trip and they want to know where you got the totally cool gizmo and you point to the web address situated where all can see at the top of the racket.

Recently, our supplier informed us that he had been forced to remove the web address because some of the retail stores that were stocking the product were not happy selling something with our web address on. Fair enough, but still a huge blow to our marketing. We are now investigating web address labels which we will then have to manually stick on each racket - a mission, but well worth the effort.

A web address on your product can make all the difference to your marketing - it's so incredibly simple and can be so effective.

Today we packaged and posted our 500th Bug Zapper order. We've sold 1,660 rackets since October 2005, so we average about 3 rackets per order. There were a few seconds of wild celebrations on reaching this momentous milestone*, then back to work.

*Well, it was actually all a bit of an anti-climax, because we only realised once we reached order 501.

Big Bad Brad has been helping us fulfill our Flag Kit and Bug Zapper orders over the past two months before he starts Varsity in February. Today he's been extremey busy!

Would be nice to say that these are the kind of volumes we do on a daily basis, but the truth is, our new stock arrived yesterday and we are a little behind on our orders. To complete an order, each zapper is tested (we prefer finger testing, but not everyone can handle this), boxed, strapped and then finally 'waybilled'. All in a days work for BBB.

(In the background you can see our new 19" LCD flat screen that we picked up today.)

“Google Checkout” is the new kid on the block trying to eat into PayPal’s dominant position in the payment market. Currently they only offer merchants in the US the ability to accept payments, but they accept purchases from a large number of countries, from Albania to Zimbabwe, and some very 3rd world countries like Burkina Faso and Tanzania. No prizes for guessing which country isn’t on the list… South Africa. There must be something very wrong with our banking system and government policies.

Read the full list of countries here.

Last week we received payment for an order that was placed in September 2006 for 3 x 6m ground mounted flag poles. Since then we have decided to not sell flag poles because they’re not the most convenient things to package and deliver, but we had to honour this quote because back then we also didn’t specifiy that quotes were valid for 30 days! Poles are particularly tricky if they’re headed for the middle of the Transkei (which we did last year).

We’re still undecided about whether to put poles back on the site. There is a demand, and customers often want a pole and flags at the same time. If we only offer flags they might go somewhere else for the whole order. We need to decide whether to stay absolutely focused (”country flags to your door in a hurry”), or to keep our range wider and appeal to a bigger market. A wider range will mean modifying the ordering system to allow for different delivery times and charges for different products, which is not ideal.

This week we had an enquiry for Bug Zappers from a customer in Kent, England. We are not trying to sell internationally because it creates too many middle-men (China to Hong Kong, Hong Kong to the SA importer, SA importer to us, us back overseas) plus double customs and lots of delivery charges. But we do appreciate that the Bug Zapper is a special product, and when you want to get your hands on one there aren’t a lot of options. So we quoted a price for 3 rackets (they fit nicely in one box), and the customer accepted.

Then we got some quotes for international shipping. Notice how this part happened after we had already quoted the customer? Yip, we’re not that bright.

A box of 3 rackets weighs 1.15kg and the dimensions are 53cm x 24cm x 4cm. That’s about the size of 2 small Debonairs boxes end to end, and not much heavier. ACT Logistics quoted around R800 and Berco Express quoted R710 (ex VAT, but apparently you don’t pay VAT on international shipments?). That was way, way higher than we had expected. With a deep breath and a grimace we turned to the South African Post Office.

You might have noticed that the Post Office website is not too shabby. The design is clean and there is a lot of information, although the navigation is not always obvious. We have used the PO Box renewal facility in the past and it was very impressive (read here). On the site we found the rates booklet in PDF which is handy. Their courier cost was very similar (around R700), so clearly that is the minimum rate for a small parcel to an international destination (I wonder how Amazon does it so cheaply in reverse?), but they do offer normal international postage (10 days air freight as opposed to 4 days courier), so we decided to go with that.

This morning Shane and I went to the local Plumstead Post Office with our box of Bug Zappers and the customer’s address. We were greeted by a teller whose mood was closer to a Home Affairs worker than a Vida e Cafe waiter. I guess she knows that we’re only using the Post Office as a last resort, so a cheery disposition is just a waste of energy. She weighed the parcel and quoted R203 for air freight (about R130 for sea freight), plus R6 for insurance.

We tried to pay via credit card, but apparently the Post Office doesn’t accept credit cards. Can you believe that? The second-hand jewelry shop in the tiny centre down the road from us does, but for some reason Post Offices don’t. In an interesting case of irony, the Post Office even calls themselves a bank. They do accept debit cards, but this is not ideal because each transaction costs us a charge from our bank.

We asked if we could open an acccount (not a bank account, a retail account for paying a bill once a month) because we plan on taking lots of small deliveries to the Post Office every day, but that’s not possible either. In my usual hot-headed way I threw out the comment, “I guess this is why PostNet exists”, to which the teller responded curtly, “Have you been to PostNet? They charge double, and use us for postage anyway.” Although she didn’t see it, this was exactly my point. Why has a PostNet branch opened up in just about every South African town (200 according to their website) when they offer the same products as the Post Office, outsource delivery to the Post Office, and charge more than the Post Office? Today I found the answer - PostNet cares, and tries to understand what customers really want. They are usually staffed by the franchisee him/herself, which means there is an element of passion and desire to help, they offer accounts for businesses and they accept credit cards.

The Post Office could technically solve these (and a few other) problems and blow PostNet out of the water. But I wouldn’t count on it.

At Live Alchemy we are trying to keep our systems and staff as flexible and scalable as possible. Part of that strategy involves having orders processed (checking for payment, ordering stock, packaging, giving to courier company) by people working from home. Our first “home processor” is Shane’s dad, who starts in February. We are setting him with a new computer, ADSL line, phone and lots of bubble wrap, while at the same time trying to develop an online system that will keep track of everything so that we can see what’s going on from here. I will post soon about my ideas for system we are developing.

I came across a company in America called LiveOps that specialises in setting up this type of “virtual call centres” for companies. It’s a bit easier over there because of the level of broadband that they have which enables things like routing of phonecalls over the internet, but we can still imitate some of the ideas. Read a bit more about the concept here.