Well, that’s 2008 nearly over and done with. And we must say, it’s been one crazy year. This is the first, full calendar year that we have been in operation, with the company first incorporated in April 2007 and the site launching in August 2008. Yes, it does take that long to get a site launched.
So some of the major things that have changed and things we have learnt:
First, we moved to a new storage location to give ourselves more space. Unfortunately, due to personal issues on Alison’s side, she could no longer reliably ship orders on a regular basis, so we went from shipping every day to 2 to 3 times a week. That was obviously unacceptable.
We ended up changing to a logistics center in Delta, BC where we proceeded to ship every single day. It’s been a big help, especially over Christmas. Unfortunately, the cost of doing business with them has been incredibly high. Each order shipped generally costs us about CAD$5. That doesn’t include mistakes and receiving costs, which have finally resulted in us deciding to move out from them.
So as of next year, we will be bringing shipping in-house again, but this time the location is downtown. This will provide us even greater flexibility and allow us to be open longer for customers to pick up orders during weeknights and possibly even weekends. We will definitely be shipping everyday, it’s just a matter of sorting things out now.
We went to two conventions this year and we are likely going to do 4 next year. Well, we might as well increase geometrically. Both Anime Evolution and V-Con were a ton of fun, with the chance to meet some new and old gamers.
Next year, the plan is to be at the previous two, the Stargate Convention in town and the Tumpeter Games Society’s Gaming Convention Salute. Of course, that depends on whether we can get sufficient information from both.
Long time customers might notice the ballooning of our stock – from an initial 230 SKUs to over 800 different SKUs now. That has helped generate more business in many ways, but has brought about a serious problem in space and cash flow. Towards the end of the year, we were really having problems with cash flow as Christmas sales had started much later than we had expected. Something that we learnt for 2009.
In addition, pre-orders have become the bane of our existence. There’s still an internal debate on whether to take pre-orders or not. While there are ways to show a game is in-stock, and it does do so on the site (not as well on the current site admittedly), we have noticed that some customers do not notice these warnings. And thus have expectations for when an order might be received.
Yup, first full year of financial accounts was done. That was a mess, but with the accounts up to date (mostly), we should be able to get this done much easier for next year. And it certainly provided some interesting insights after completing the accounts. Including how tight our margins actually are.
The things we could write about this is miles long. Overall, the slower methods of e-mail marketing and social marketing combined with Search Engine Optimisation have played out better than paid marketing. It’s not say it doesn’t have a place and we are still testing various areas within this, but overall, I would have to say that paid marketing just doesn’t work too well for such a niche product. Perhaps if we were in the US where the market was larger, but with such a focused marketing, it’s hard to get sufficient returns even using Geo-targeting approaches.
As usual, Google continues to be an exception to this. Even then though, the Adwords program is barely making money – and losses in some months. It takes constant pruning and changes to make sure we do not run a loss due to marketing.
Of course the question of lifetime customer value does play in this, but that’s a more difficult aspect to quantify – especially since we are still so young. On pure gut feel, I would say that anything that breaks even on direct calculation is probably worthwhile to continue.
6) Website and IT issues
Yup, we had those too. Changing over to Magento from OSCommerce was a long, long process with the importation of all 800 plus products and thousand plus customer information. And that’s not to include editing, etc. We still have issues – specifically with some previously fixed problems (e-mail notifications and pre-order information to be exact), but we are overall very happy with the software. In the long term, with the new wishlist system and product comparison options, all our customers will also be much happier.
In November, after the switch over and with the increase in visits from customers, our servers finally begin to have problems. More than doubling our total number of visits and a new software that is much more server intensive made it slow and fail at times. So we upgraded our servers as well (another cost!) but one that we believe should hold for a while. Or 6 months. Depending on how we grow. We can’t really complain after all.
7) Customer Service
Perhaps the area that has been our biggest failing point for this year, especially in comparison to last year. Both our growth and personal factors have constantly thrown our response times and ability to properly deal with customers into areas that neither of us have been happy with. We definitely would like to thank our customers who have stayed with us and apologise to everyone who have not been 100% happy with our service!
A lot of this should smooth out for next year. With logistics brought in-house, the chain of responsibility gets much shorter and so we will be able to answer customers faster and get problem orders dealt with easier.
Overall, this year has been one of personal and business growth. It’s been tumultuous for both of us but we are better and stronger and we are hoping to continue growing to serve our customers.
Once again, thank you to all of you.
Tao and Alison