A busy couple of months

What can I say, looking back I can't believe it is 6 weeks since my last post.

Sales have taken off really well and I have been kept very busy each evening packing orders and dealing with enquiries. I can't believe I have actually sold out of my highest value item, the 100 piece wooden train set - unfortunately this means some lost sales in the run up to Christmas.

I have also been slightly stymied by Amazon's rules which mean that as a new seller without much of a track record they will not let me sell over the Christmas period - this was frustrating as I had just started to see a few orders coming through from this channel. Still come the new year I will look to continue to develop this channel so that I am in a position next year to sell through the peak Christmas period

I am now working out what to order for my second batch of goods from China - obviously some more of the 100 piece sets and then more on the accessories side of things. My reasoning is that people will get bought sets for Christmas and then hopefully in the new year they will want to expand these sets with additional track and accessories.

In terms of marketing I have mothballed my Google Adwords campaign - although it was driving people to the site these weren't being converted into sales and therefore until I can take action to rectify this (i.e. get more stock) there seems little point in continuing to incur spend - fortunately Google were kind enough to send me a voucher for £30 credit against Adword spend.

Sales via the JKToys.co.uk website are beginning to climb and I put this down to the discount cards which I send out with all of the orders I process via eBay. This still seems to be the most effective channel to market so although the fees are high it appears to be money well spent given the business it is driving.

I have actually stopped listing on eBay until the New Year now, we are moving premises and I don't want to run any risk of not being able to fulfill orders at this critical time - I would not forgive myself if I let somebody down on an important order for a Christmas present.

In the New Year JKToys will be back with avengence selling a wider range of stock and actively pushing to open up new markets.

Merry Christmas everyone and here's to a prosperous New Year!!

Another Sales Channel

Having seen a relatively slow ramp-up of orders via the www.JKToys.co.uk website and a reasonable amount of turnover via eBay I have decided to explore yet other routes to market. This weekend I have made some tentative moves onto the Amazon.co.uk market place which allows anyone to sell via Amazon.

Having read the fees involved I was initially put off -c. 17.5% of final sale value seemed very steep but on further thought and investigation Amazon is effectively providing the service of both eBay and Paypal in one - they provide the route to market and the payment processing - so when you compare the fee to the combined fees of eBay and Paypal it is actually reasonable and certainly allows me to keep my margins at the level I am happy with and still offer market beating prices.

My hope for the medium to long term is still to drive the majority of sales through my website but in the short term I am happy to use other ways to create turnover and at the same time increase awareness of my venture - with everything I sell via either eBay or Amazon I will be sending a money off coupon for the website sohopefully returning customers will go straight to the website to find the best prices available.

Tomorrow I need to produce the 2nd monthly newsletter for JKToys and send it out to the members who have signed up for our mailing list - I am also going to e-mail all those people who have purchased items via eBay to seek their permission to add them to the mailing list - I would really like to build up a good list of potential customers so that I can directly advertise to them at absolutely minimal cost compared to Adwords, eBay, Amazon.

Almost one month in...

So almost one month in and as you can see from the reduced frequency of posts on this site I have been kept busy fulfilling orders and working on the business. I now have the order processing better tuned - although obviously the recent and future threatened postal strikes are not ideal for a new business totally reliant on mail order sales.

I was encouraged by an article in the Telegraph last week in which John Lewis have predicted that wooden train sets will be one of their top ten sellers for this Christmas - part of me thinks that Christmas may be too soon for me to be really at my peak for fulfilling orders, and indeed my stock variety is still lower than I would like. What is encouraging that hopefully all of those train sets given at Christmas will want to be upgraded and that is where JKToys.co.uk comes in.

Happy customers

So into week one and there has been a steady trickle of orders which is encouraging and useful to test the process for fulfilling orders. So far, fingers crossed and touching wood, everything has gone smoothly although I have say the daily trip to the post office is getting to be a bit of a drag - I am going to have to find a better way of fulfilling orders (at the moment I am keen to get a proof of postage for each package so that I can sort out any problems if they occur).

The best part so far from this week is the first bit of unsolicited feedback from a customer - I received an e-mail from one of my first customers as below:

" Hi, I just wanted to say how happy I was with the items I ordered from you (junction pack and wooden straights), and also the delivery was really fast. I didn't expect to receive them until next week! I'll definitely pass the recommendation onto my friends, and return when I need new bits for my boys wooden track collection."

The best part of this e-mail is the promise of word of mouth advertising - as far as I am concerned this is by far the best type of press any business, especially a new one, can get. Here's hoping that this will lead to plenty of further orders especially in the run up to Christmas.

Customer Service, what Customer Service?? (Royal Mail - the people's rip off!)

So having made our first sale today was the day to deliver on that order. So having packaged the order up -and included a couple of bits of additional track as a bonus for being our first customer it was off to the post office to send it on its way.

To cut a long story short the postage was £9.58 - much more than I had expected and certainly more than the £4.50 postage charge - what has really annoyed me is that on getting home I checked my receipt and checked the post office website to check their tariffs and what I found wsa that my package had been weighed to 4.004kg and that packages up to 4kg cost £7.06 so that extra 4 grammes cost me £2.52 in postage (and all because I included some extra free track).

What really annoys me is that the lady at the Post Oiffuce counter didn't think it worth while mentioning that if I could take 4g off the package I would save £2.52, and I could easily have removed 4g just by cutting a small piece of cardboard off the outer box. Oh but she did have time to try and persuade me to take out a Post Office credit card - to me this typifies bad customer service - not really thinking about what the customer wants but being completely focussed on what you want to get out of the customer!

Grand Opening!!

Well Grand might be overstating it a bit, but the online shop is now officially open for business -and indeed the first order has been received, not without problems mind. The finely crafted website managed to break the link with Paypal and hence customers weren't able to pay for their orders.

So the first order processed through the JKToys website was actually done over the phone with an invoice to be sent with the package for payment by cheque - not quite the slick online e-commerce transaction I was planning on, but hey a sale is a sale!!

Ready to launch (but don't tell anyone!)

I am finally in a position where I feel confident that the shop will be open for business on the 1st of October. In fact things are going so well now that I am keen to open as soon as possible - I have decided that whilst holding to the official opening date of 1st of October I am going to start spreading the word in advance of this through the use of adwords as well as postings on forums etc.


I am also starting to sell some of the second hand items I have on eBay and with each purchase I send out I will be enclosing some money off vouchers for the website, http://www.jktoys.co.uk/ . Hopefully word will start to spread and the orders will follow!

E-mail marketing

Whilst looking for some general hints and tips on producing HTML emails to send out to people who have expressed an interest in JKToys I came across the following website: http://www.mailchimp.com/

I have signed up for a fre account which allows you to store up to 500 people in a list and send up to 3,000 e-mails as part of a marketing campaign. It appears to have some very useful tools such as helping with the design of an HTML e-mail to be sent out and then tracking how many people open the mail and whether they then click on any of the links which you may have included within the mail.

I have had a quick play and think this could be a very useful tool - all I now need to work out is how to get people to sign up to be on my mailing list. I have added a sign up form to the website (another handy application provided by mailchimp) so hopefully as more people visit the site so the mailing list will grow. I am determined not to be seen as a spammer so it is very important to me that anyone who receives our newsletter must have signed up for it.

To try and get people to sign up to our newsletter I am offering the chance to win a 100 piece BRIO compatible train set which I will be selling at c. £37 and which many others sell for nearer £50. You can sign up at http://www.jktoys.co.uk/ if you are interested.

Taking Product Shots

Now that I have the products I need to get shots suitable for placing on the web to show them off. There appear to be a couple of options on how I go about this:

1. Use a specialist product photo studio - best price I can find is £5 per product which actually seems reasonable when you read what they do - it is 3-4 high resolution shots, post processed if necessary and adjusted for eBay / website thumbnails


2. Invest in the necessary equipment and learn how to take professional looking product shots.

I have decided that sticking with the JKToys low cst ethos option 2 is the best choice for what I want to do. I already have a reasonable digital camera so in order to take half decent product shots it appears that the only other piece of kit I really need is a light tent. These retail from c. £200 but I have found online instructions for a DIY version which will cost c. £50 - details are at:

http://andypiper.wordpress.com/2007/01/06/building-a-light-tent-part-2-assembly/

and there is a handy tutorial on how to take decent shots at:

http://www.shortcourses.com/studio/tabletop/studio.htm

Having built the light tent as per the instructions above I have found it to be a bit on the unstable side - I will therefore be modifying the design to incorporate leg braces for additional sturdiness. I also think I need to invest in some higher wattage lighting as my initial shots as can be currently seen on http://www.j.ktoys.co.uk/ are a little bit noisy I think due to less than ideal lighting.

Anyway will post an update when I get around to modifying the light tent design for anyone interested.

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

It certainly feels like it has been a battle to get to this stage and yet I haven't even tried to sell a single item yet!!


I now know that there are 149 cartons waiting to be picked up from a warehouse near the M25 - time to clear out the garage!!

Garage cleared - all ready to go and collect my goods, just a quick phone call to check their opening times oh and "by the way the goods haven't been cleared for release so you won't be able to pick them up." Yet again my Chinese facilitators have yet again done anything but facilitate!! Having transferred my final dues for shipping, VAT etc. a week ago I was pleasantly surprised when I received the details of my shipment and where I could pick them up from - I guess I should have known then that this was running too smoothly to be believed, how appropriate the title for this post, which I typed a couple of days ago, now seems.

1 month and counting

Well the title says it all - it is now one month until my target opening date of 1st October for JKToys. Apparently my goods are now in the country; after failing to get a response to my e-mails I finally resorted to calling the intermediary company in China to find out what is going on. Re-assuringly I managed to get through to my account manager (although I get the feeling she may be the one account manager!) and she reported that my container had been unloaded at Felixstowe and I should soon be hearing from their logistics partner to discuss delivery.

I have received my heat sealer and the necessary consumables and have to say I am happy witht the end results of the sample items that I have packaged up - I now need to spend a bit of time to develop the process so as to reduce the turn-around time for each order.

Development of the website has been continuing apace - helped by the fact that my e-commerce provider has set up a new forum for bug reporting, feature requests etc. and they are taking all the comments on board and turning things around pretty quickly, so fair play to them - for reference they can be found at http://www.hbecommerce.com/ (if you use them to set up a shop please let them know I sent you!).

The thing I am really missing is the product - I need this to do the necessary photo work and to work out what track layout options I can build and hence market with the track I have ordered. I have sent a request to China for prices of additional items I want to stock (surely it can't take as long for the second order), I am looking to expand the range with some of the more expensive items such as train sheds, turntables etc so as to be able to offer more of a one stop shop for Brio and wooden train set accessories. One of my concerns at the moment is that because I will not have a stock of the full range of items people may go elsewhere, the plan therefore is to expand the range of items stocked as quickly as possible.

Reality Strikes

Blimey, received an e-mail today saying 'my goods are now arriving' please give us delivery details - which has caused me some confusion as my understanding was that they were going to ship the goods to their warehouse and I could then arrange to pick them up from there, so have had to e-mail back for clarification. I hope that the items will have been shipped in a form which means I can load and unload a van by hand - given I don't have access to a forklift truck and I'm pretty sure one wouldn't fit in our garage!

I am also now waiting nervously to see how much I will have to pay for shipping, customs etc. When I first set out on this venture I did receive a quote for the fully landed price but I am intrigued to see if what I actually end up being charged bears any resmblance to this quote (I have added a supplementary order to the shipment so I am expecting it to have changed a bit but not by a massive amount.

Now it is time to really focus on tidying up the JKToys website at http://www.jktoys.co.uk/ , deciding on the pricing strategy and defining the marketing strategy.

In respect to the final of these topics I have now signed up to both Google's Adwords and eBay's Adcommerce schemes - my plan is to use these schemes to drive customers to either the goods I am selling on eBay (my initial sales channel) or the JKToys website. I am intrigued to see how effective these schemes will be - they certainly seem to offer plenty of tracking statistics to show you number of click throughs etc.

I need to work on the definition of the campaigns in both of these tools ready for launch date - I am having to hold myself back from having a go with the tools now - as obviously the site isn't ready and I have nothing to sell (I'm just really keen to see how well these tools work).

WooHoo - progress

My goods are finally on the way to the UK, as I am becoming used to with my Chinese agents they didn't bother to tell me this minor detail I only found out by asking what the current progress was. I think I may have to investigate other agents before placing my next order, or even look into working directly with the factories - a daunting prospect at the moment.

Anyway for now it is full steam ahead with tidying up the website and making sure I have the processes in place to fulfill orders - I need to look into how to package the goods so that they look up to a professional standard; I am thinking a heat sealing machine to bag up groups of items will give a better impression compared to sending out loose items in postal bags, so I think it is time to look on ebay to see what offers there are to be had. Obviously the cost of the packaging will need to be factored into my cost/price model to ensure that I am making an adequate return from each sale to cover all of my costs plus a profit (fingers crossed!!)

Can anything else go wrong???

On the plus side my goods are apparently ready to be exported, once my payment has been received; on the downside between us the bank and I managed to cock-up the transfer so instead of US dollars the payment was made in Hong Kong dollars - if only I could get away with it (a Hong Kong dollar is about 8p compared to 61p for a US dollar!)

Having checked the paperwork the error is clear to see - in the box for amount and currency it stated the amount and US Dollars but for some reason there is another box for payment currency which was automatically completed with Hong Kong dollars as the payment is going to Hong Kong - why there is a need for both of these boxes I don't know and why they chose to go with HK dollars and not US dollars I also don't know. I have to say though the guys at Natwest were pretty good about it and have agreed to refund the £37 fee for an urgent transfer - I just have to hope that they manage to get the correct amount across to Hong Kong in time for the shipping. Fingers crossed!

Hopefully this time next week my goods will be on the high seas!

Progress (limited, but progress!)

Having been out of the office for a couple of days I got back to some good news - my goods have been delivered to the agent in China and so they are ready to be shipped (only three and a half months after I placed the order!!)

So now my attention has to turn to making sure I can sell the stuff when it arrives. I have been developing the site over the last month or so using a 3rd party hosting solution for e-commerce - again to keep costs to a minimum. I am starting to get a bit frustrated with the e-commerce solution as they appear to have launched the product to market whilst still being in the midst of testing and developing it. I have already provided at least 10 major feature developments that are required and although they are developing these it all takes time and so far they haven't committed to when they will all be fully functioning, which makes it hard to plan when my shop will be fully functioning. Some of the features are cosmetic and frustrating e.g. the ability to add additional pictures for products and some are going to make it harder to process the orders e.g. the Order tracking functionality.

I am working on work-arounds now so that if all of these functions haven't been fixed in time I will still be able to open the shop for orders on 1 October. Fingers crossed though it will all be up and working which will make my life much easier!

Update from China and Free CAD Software

After chasing the guys in China they have now confirmed that they are expecting delivery of my goods on the 10th of July which will mean they are shipped on the 20th. Hopefully I should therefore have them here in the UK by the end of August - so the 1st of October target opening date is still looking realistic.

I have decided that I need to smarten up the track layouts I have on the website so I am invesigating a CAD package - Solid Edge 2D Drafting - as you can probably guess this is a free piece of software, as with the accounting software this is the hook to hopefully get you to upgrade to their commercial 3D package, as I am only loking for 2D drawings this suits me fine and fits the JKToys ethos of minimising costs wherever possible to a tee.

Very slow boat from China!!

Having been on holiday for a week without a single connection to the wired world it appears that the boat from China is even slower than I previously thought. I was expecting to come home, logon and find an e-mail confirming that my first shipment was on its way - instead there was absolutely nothing, not even an e-mail explaining that it hadn't yet been shipped but would be soon!

Given that I am paying an intermediary to take away the hassle of dealing directly with suppliers in China I am becoming very frustrated with the amount of chasing I am having to do - I am wondering whether for my next shipment I just go to the factory directly - the main problem with doing this is sorting out all of the logistics of shipping etc. which is why I didn't do this in the first place. However given the amount of time I am spending chasing the intermediary I feel I might as well invest that time in learning about shipping and organise it myself! Can it be that hard?

Publicity material

Having been bombarded with e-mails from http://www.vistaprint.co.uk/ I finally succumbed to their promises of pretty much anything I wanted for free. I have ordered business cards, postcards and return address labels and somehow the free items ended up costing me about £15 by the time I had uploaded my own images and paid for postage.

My plan is to use the business cards as discount vouchers - I will hand these out to the target audience as well as sending them out with any initial orders for people to either use when they return or to give to their friends - I figure most people who are buying these types of items have friends who have children of similar ages and therefore hopefully word will spread.

I have also had offers from friends to distibute leaflets to their friends once the website is up and running - this has made me wonder whether I need to put a bit more effort into designing a really professional looking flyer (this goes against my ultra low-cost plan for development). I guess if this can be done simply by me spending a bit more time on it as opposed to hiring somebody to do it for me then I can still avoid the cost - something for me to investigate tonight is any free photoshop like art packages that I could use to design my brochure.

Market Research \ Pricing Decisions

So now the goods are soon to be on a boat from China I guess it's time for me to carry out some market research!! OK so maybe that's slightly the wrong order but hey better late than never. I guess actually what I am doing is more 'competitor research' rather than market research - I know the market is there what I need to do is work out the price-points for the various products. As my strategy is to provide the best price available for comparable products I am now spending time researching the price that my competitors to be are currently offering similar products for - this mainly involves searching on the web for these products - what I have noticed so far is that low headline product prices are often matched with higher delivery charges, this is a strategy I want to avoid (a bit like the Ryanair flight for 1p which ends up costing you £50 by the time you check-out).

I have decided a key task for the next week is to build a pricing model which will allocate all the costs associated with supplying the products to an end customer to each product, e.g. splitting the shipping cost across all of the products etc. This will give me the break even point for each product which will be a very useful starting point for deciding the price. I think the price will then be set by combining the profit margin I think is appropriate and by looking at what competitor's are charging.

Costs I definitely need to include are:

1. The cost of the item
2. Shipping
3. Import duty etc.
4. Post and packaging to the customer
5. Any payment commission for online processing (paypal etc.)
6. Website hosting
7. Marketing?
8. Labour?

Labour I am still unsure about, to start with labour will be me hence no external cost but I think I should factor something in for my time in order processing to give a realistic cost of supplying the goods and to future proof the cost models in case I decide to employ somebody to pack etc. in the future.

So that's my key task for the next week anyway, coming up with the prices that will be in place when the site is launched. (I will also be looking at accounting packages as discussed in previous posts and will be posting details of my findings here.)

Slow boat from China

Finally, after several chasing e-mails, and almost 2 months after placing my first order and making a deposit payment for it I have received word from China that my first shipment should be sailing from Ningbo on the 20th of June.

Having had a quick look at the shipping timetables to get an idea of shipping time it looks as though it should arrive in the UK after approximately 28 days - the items then have to be cleared through customs and transported to the warehouse in the UK. I reckon therefore that I should have the stock sometime in August - certainly in plenty of time for my target date of 1st October - if I get confirmation of the shipping and expected arrival date then I may have to consider pulling forward the opening date, after all there's no point in having the stock sitting around. However as previously stated I will only do this if I am happy that we are in a position to satisfactorily fulfill orders with the type of customer service we want to be proud of.

VAT Registration?

Today I have turned my thoughts to the money side of the business - more specifically accounting. I have decided that I want to implement some proper accounting software rather than try and run the business on a variety of spreadsheets.

I came across the following free piece of software from the guys at Sage www.tassoftware.co.uk/free/- I think the plan is that you pay for more complex add-ons such as a payroll system etc. but hopefully I can get by for now on the basic free piece. I will install the software over the coming days and post my findings here to let others know how it has gone.

The other question I am pondering right now is whether I need to register the company for VAT - from a quick look on the Inland Revenue website at http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm I think I can escape without registering for VAT at the moment as I will not be at the threshold of £68k turnover for a while yet. The exact wording is

Supplying goods or services within the UK. If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £68,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. See the section in this guide on calculating your VAT taxable turnover.

So as I see it when I get close to £68k of sales in a year I will have to look at registering for VAT and hence charge VAT to customers and do all of the associated accounting for VAT, but for now I will place this on the list of things to monitor but not do.

Join our mailing list.

I forgot to say that for anybody who is interested in joining our mailing list in advance of our opening please send a mail to sales@jktoys.co.uk and we will keep you informed of our progress and even send a discount code for your first order as a thank you for your support.

Cheers
Jake http://www.jktoys.co.uk/

How do I get noticed?

The aim of JKToys.co.uk is to offer traditional wooden toys at the cheapest possible prices without compromising on quality.

Our first product line is going to comprise of wooden railway sets and associated accessories. As well as offering standard railway sets we are going to provide expansion kits which will allow a variety of interesting layouts to be built - these expansion packs will provide components at much better prices than buyin them individually.

The key question that is currently concerning me is how to spread the word of http://www.jktoys.co.uk/ in a cost effective way; in other words how to market the site. Options I am considering include:

1. Pay per click advertising


2. Setting up as an Amazon retailer


3. Setting up an ebay shop


4. Search engine optimisation - I definitely need to do more research into this area, there are plenty of companies offering the service but will it do what I need?


5. Local paper advertising


6. Niche market specific advertising.

This is something I am going to have to give serious consideration to over the next couple of weeks.

I have decided to set a target date of 1st October for the official opening of our e-commerce store - I think this will help focus the mind on the various tasks and decisions which need to be completed / made in order to hit the ground running with a smooth operation; I am very aware that to delay launching is preferable to launching with dodgy operations as bad press spreads quickly and I expect to only have one chance to impress each customer with our service. Key to minimising the marketing spend as discussed above will be to encourage repeat customers and personal referrals from satisfied customers - therefore customer service and satisfaction are my number one priority as I go through the job of working out the end to end process of order fulfilment. (obviously I'mbeing optimistic and planning for plenty of orders - if we only get 1 order a day I'm pretty confident customer service should be high!!)