Case Study: SafeandVaultStore.com
SafeandVaultStore.com was one of the first online stores to sell and ship direct to consumers large safes, such as gun and rifle safes, floor safes, and wall safes. The store also sold safes to businesses and large hotel chains. Being a B2C and B2B online store, and the freight requirements for large scale safes made the business a bit more complex than the typical e-commerce store.
SafeandVaultStore.com was one of the first online stores to sell and ship directly to consumers large safes, such as gun and rifle safes, floor safes, and wall safes. The store also sold safes to businesses and large hotel chains.
Being a B2C and B2B online store, and the freight requirements for large-scale safes made the business a bit more complex than the typical e-commerce store. The store was an extension of a 60 year old safe, lock, and security company located in Spokane, Washington, Allied Fire & Security, and had a long time relationship with all the major safe manufacturers in the country. This allowed them to set up a drop-ship model for the majority of their safes.
The store went through many transitions since it started in 2009, including keeping up with changes in Google algorithms, and a major Magento overhaul in 2012 and 2013 at the cost of $65,000. The store did well with 2 employees running operations in the early years and four employees in 2013 to 2015 with slow growth. The business grew to $2.5 million in revenue by the end of 2015, but the margins were low, net profit was low, so the owner, Jay Hunt, decided to hire an experienced e-commerce director, Desiree Bryant Jones, partner consultant of Cloud Potential and now Senior VP of Cloud Potential, in 2014 to take the company to the next level.
The main problems Jones found with the business was heavy development costs to maintain the Magento platform, high shipping costs on the free shipping model, high costs of PPC and SEO providers, and major issues with the mobile version of the site, noting that Google had been making major mobile overhauls to their algorithm.
All of the above cutting severely into the net profit margin of the business as well as inhibiting net sales potential. The website had one 5% banner on it for months and no campaigns to drive additional sales from email or online channels. In addition, selling on marketplaces, such as Amazon and Ebay were cutting on average 12% into the gross profit margin, thereby, reducing the bottom line overall average. The business was projecting under a 2% net profit margin at the most, possibly being in the negative, with the current business decisions and setup.
Jones created a 12 month plan to tackle these issues and phase the company out of contracts with over-priced providers that were not delivering the ROI needed for the business, and bring in high performing teams to revamp the marketing and operations of the business. A brief outline of the project included the following:
- Phase out non-performing providers and bring in high performing Cloud Potential teams for SEO and PPC campaigns.
- Moving development to Cloud Potential partners to reduce IT costs and improve site performance. Revamp content with Cloud Potential writers.
- Website overhaul with unique product descriptions and super optimized meta tags.
- 3-4 campaign rollouts per month on featured product and discounts – working with manufacturers willing to provide cost discounts and promotions.
- Temporary fixes on the mobile version of the site until moving to a new cloud platform.
- Salesforce.com integration to handle B2B quotes and marketing while providing a completely integrated CRM for the company separate from its parent company.
- Reduce Ebay and Amazon product to small safes and only highest margin safes, using Amazon fulfillment to ensure fast delivery, lower freight costs, and optimum reviews.
- And, finally, moving the site to Shopify Plus to ensure the website would not need a major overhaul again in the future and for an optimum mobile device user experience.
2014: Net profit of 3.5%, sales growth to over $4M in revenue
2015: Net profit of 4%, sales growth to $5M in revenue
2016: Net profit of 4.5%, sales growth to $5.8M in revenue
2017: Net profit of 5%, sales growth to $6M in revenue
2018 projections: Net profit of 5.5%, sales growth to $6.5 to $7M in revenue