Selling baby items online can be very lucrative, as Trevor Ginn found out. The managing director and founder of London-based Hello Baby (www.hellobabydirect.co.uk), an online retail business peddling baby wares, has seen sales for his company go up 20% over the past few months.
Hello Baby retails baby products on their own website, as well as eBay and Amazon Marketplace, in an Internet-only sales strategy that has helped keep costs low. “A multi-channel online strategy enables us to reach the maximum number of online customers” said Ginn. “We all have a preferred place where we like to buy online. Many business just sell on a website, or just on eBay, but we think that this is a terrible mistake. Companies need to be flexible and go where the customers are.”
Ginn worked as an e-commerce consultant before he started Hello Baby. With e-commerce growing at a steady pace, his clients were doing well – which disturbed him. “I felt that I knew much more about online marketing they did. So I decided to put my money where my mouth was and launch my own online business.”
Ginn researched into may different retail sectors before settling on the nursery industry. “I had a number of different criteria for choosing a sector, for example, it had to be something I knew about, be non-seasonal and have the opportunity for good margins,” he explains. “I had also recently had my first daughter and the amount of money which all new parents seem to spend on stuff was also an inspiration!”
Hello Baby focuses on building an attractive, user-friendly website and carrying a great range of products at attractive prices. As people cannot touch the products they are browsing, the site believes this is essential for customers to have as much information as possible before making a purchase. “We put a lot of effort into having compelling product descriptions and photos,” says Ginn. But building and managing a robust product catalogue, Ginn admits, is the company’s main challenge. “A retailing website involves the creation of a huge amount of content, and prices constantly change. Keeping on top of this is very time consuming.” His team also faced a steep learning curve trying to get up to speed with the products and the competitive landscape. “No one in the company had a background in the nursery industry!” Ginn reveals, unabashedly.
Its effective customer service and delivery – only one percent of their orders experience any kind of problem – means good repeat business. Perhaps because of that, Hello Baby has grown their business steadily – at around 10 percent per month – since their launch, and currently sells £40,000 worth of goods every month. Its iPhone app alone has garnered some 20,000 downloads.
Hello Baby is self-funded, and keep their startup costs low by choosing very cheap office space and dropshipping a large proportion of their stock. However, they are looking to expand their operations, and “aim to be a major player in the nursery market” with “a compelling offering to customer in the UK and worldwide”.
Growing An Online Business
Ginn shares that Hello Baby’s main strategies for growth are to increase the size of its product catalogue and build more traffic through natural search. More products available, he says, means more opportunities for people to make purchases and allows more content for Google to index and drives natural search traffic. “We believe the natural search is the most cost effective way to market a website and we engage in an active program of content creation and link building.”
Hello Baby has a blog where its team write about their experiences of raising children, as “a resource for new parents”. It also uses the social networks Facebook and MySpace to keep in touch with their customers. “Social networks like Facebook are great fun and a fantastic way of getting to know our customers,” Ginn explains. “They also give us instant feedback about what our customers are thinking.”
However, Ginn admits their forays into the social media front have some way to go. “Social media has only driven very limited traffic to the site although we have built up over 700 followers on Twitter. However, we are putting a lot of effort in this area and expect it to pay dividends in the future.”
Starting Online, and Starting Small
If you’re considering starting an online retail business, Ginn says that budding entrepreneurs need to consider those that have proven business models, and starting small if they have to. “Online retail is great in this regard, as online marketing places like eBay and Amazon give quick access to customers and transactional websites can be set up quickly and cheaply,” he says.
“We started off with about £1000 worth of stock and an eBay store and took it from there.”
Views on Entrepreneurship
Ginn is very candid when discussing why he became an entrepreneur. “I was a pretty poor employee which made the decision to become an entrepreneur easy. I always found it hard to work for other people and consequently did not do a very good job!”
“Having worked for myself now for 2 years I can confirm that being an entrepreneur is very hard work and quite lonely at times,” he says. “However, on the plus side, knowing that you are a master of your own destiny is a great feeling. I think that the secret is to have a clear end goal and maintain focus.”
The two most important lesson Ginn has learnt, he says, is becoming an expert in your field and being self-reliant. “Most things in business or technology are not that complicated and it is usually possible to do them yourself if you read up on the subject,” says Ginn. “I have saved thousands and achieved better results by becoming knowledgeable in areas such as online marketing, usability and application development.”
“Depending on contractors to do everything is very expensive,” he adds.