Monthly Archive for October, 2008

Did Ferrit just open a can of worms?

Published on October 21, 2008 in E-commerce and NZ Internet. 3 Comments Tags: , .

I recently noticed that Ferrit are promoting that they are now accepting credit cards from the USA, UK and Australia. This sounds like a cool idea — its a good way to get a few extra sales from ex-pat Kiwi’s etc. More sales = good.

But there is a down side … Ferrit sellers have no protection from credit card fraud. So how’s that going to work?

The NZ Herald posted an article on Sunday about the “huge jump” in credit card fraud in New Zealand. Articles like this represent the tip of the iceberg of the real problem — most online fraud committed in New Zealand is done with a credit cards stolen from overseas.

There’s no doubting that Credit card fraud is a major issue for New Zealand online stores. It’s something we have to be very very vigilant about.

To make life a little more difficult, there’s very little protection against fraud for the local online stores — there’s no Card Security Code and no Address Verification System. Actually, New Zealand online stores are one of the least protected species on the planet!

But the news is even worse for sellers on Ferrit. They don’t even get access to the credit card numbers used on Ferrit. Yet they are 100% responsible for any chargebacks incurred. That’s a risky proposition.

The Ferrit sellers are fully reliant on Ferrit filtering out the fraud (hopefully Ferrit have hired more people to do this). The Ferrit sellers are very much flying blind.

So with Ferrit now accepting credit cards from the USA, UK and Australia, the question has to be asked…

Did Ferrit just open a can of worms for their sellers?

Change or Die…

Published on October 18, 2008 in E-commerce, Mighty Ape and NZ Internet. 0 Comments Tags: , .

The NZ Herald reported this week that indie music retailer Real Groovy has gone into receivership. The article points out that Real Groovy was suffering from increased competition for the sale of new Music from both JB HiFi and The Warehouse. To make matter worse, they compete with Trade Me for second-hand sales, which appears to have been their core business. And lets not forget about those other “bad” words: music and downloads.

From the outside, Real Groovy typifies that many “once-great” specialist stores face increased threats from new technology and fierce overseas competitors. It seems obvious that Real Groovy was getting “hurt” by JB-HiFi, The Warehouse and Trade Me… but what could Real Groovy have changed to solidify its place in the market?

From my experience as an Indie, I’d suggest that we independents need to:

  1. Face up to the brutal facts early.
  2. Change our business model until we find an advantage/gap (ie do things better).
  3. Out-execute the chains to “own” that niche (ie move faster!)
  4. Rinse and repeat (ie keep moving)

Indie stores can have significant advantages over chain stores when it comes to speed. The key thing is the ability to keep finding an advantage/niche to own…

GPstore was a great great example of a store needing to change. When confronting the brutal facts we could see a train wreck in 2-3 years time (from increased competition and the effects of the internet).

We decided it was vital that we broaden our reach and our product range — so that we are not reliant on revenue from games alone. This allows us to remain very competitive in the games market and still have the potential to grow elsewhere. We’re making it very very difficult for the overseas chains to squeeze us out of the market.

It’s change… or die.

Books > Music

Published on October 13, 2008 in E-commerce and Mighty Ape. 0 Comments Tags: , .

Just a couple of weeks after our re-launch, we’re pleased to report that books are emerging as a strong category. The book category has swiftly over-taken the music category and moved into 3rd — games (of course) are number one with DVDs second.

Its interesting to see that we’re selling a wide variety of books, but as we predicted, the science fiction genre is especially strong for us, followed by childrens books.

We’re still novices when it comes to selling books, but we’re learning rapidly. One of the things that has surprised us is the varying “quality” of some books. While most paperbacks are as you would expect, some of the hard backs are *very* cool (in terms of size, page quality, number of colour images etc).

Books such as the recent Robbie Deans book or Footrot Flats: The Long Weekender are exceptional books, but it is very difficult for us to present them well online. In a physical store you can pick them up, feel the weight and instantly appreciate the excellent value they offer.

While apparently “a picture says more than a 1000 words” — online this really isn’t the case. It’s much more difficult online to show how great a product actually is. This is going to be one of our many challenges moving forward.

Speaking of moving forward, we’re very happy to have weathered all the post-launch bugs — we’re now back to working on our boat speed…

Looking back 5 Years

Published on October 3, 2008 in E-commerce and GPstore. 0 Comments Tags: .

Its been just over five years since we launched the first GP Store web site — September 15th 2003.

Archive.org still has a few early shots of the what the site looked like back then.

Over the 5 years since launch we changed pretty much everything… except the header (if we’d been able to come up with a decent design we’d have changed that too).

And I still remember the 2003 launch being very clumsy…

On day one we couldn’t actually ship any orders, or process orders, or even print them actually (as we did back then). Our admin tools were, well… non-existent. Our stock on hand was limited to two cupboards in our garage, we had no stock of DVDs and back then, we manually charged credit cards through an EFTPOS terminal… and cut out address labels from a piece of paper.

Somehow we’ve grown out of the garage to the point where we have 13 staff, a warehouse literally full of stock and now ship hundreds and hundreds of orders every day. We’ve developed our own order processing application and it’s funny to think we now have a staff member who’s full-time job is to… “stock in products” (that’s one job that never made any of our business plans).

Times have changed… but I still believe working from a garage can be over rated!

Building the foundations…

Published on October 2, 2008 in E-commerce and Mighty Ape. 1 Comment Tags: , .

With the recent launch of Mighty Ape, the question our suppliers often ask is… “Where are you going to promote it?”. My response is usually something along the lines of “Well we’re not going to do a Ferrit!”.

Initially, our focus is on getting our web site and our service working for our customers (which actually comes right after us getting our web site working!).

As a family company, we don’t have deep pockets like Telecom, so we know we have to develop a product that works better… preferably way better. We can’t win on advertising spends, but we can win on content, usability, better service, usefulness etc.

Our amibition is to be good enough so that we’re worth talking about. While we wish it was that easy, being worthy of a recommendation to friends is a big ask. But if our customers are 100% satisfied, then heopefully they’ll tell their friends and so on…

Its really about winning one customer at a time. The hard way.

This is the strategy that worked for Trade Me… and its worked for many other highly successful web sites. Actually, when was the last time you saw an ad for Trade Me, Google, You Tube or Facebook?

To execute this strategy, we’ve invested a huge amount of time in getting the web design right (so people find what they want), getting lots of stock on hand (so people get their stuff quickly) and built up a great customer support team (so people get all the help they need).

After only a few days, we’ve had some excellent feedback and data that we can use to improve the site and we’re really looking forward to focusing on getting the foundations right so we can promote the site…

But in the mean time we’ve got a stack of small bugs to fix, quirks to iron and an endless list of improvements to make. Busy busy times!

Web capacity increased

Published on October 1, 2008 in E-commerce and Mighty Ape. 0 Comments Tags: , .

Since the launch of Mighty Ape our web servers have been running hot and we’ve been forced to sit on our hands while we quickly arrange more capacity.

Our current servers have been coping mostly fine, but a traffic spike from a newletter would have resulted in bad performance issues (or worse).

Today we’ve added a nice new web server to our server pool. This means in theory(!) the web servers should now have no problems with any traffic spikes we can throw at them.

What did we call our new server? Bubbles! :)