Selling your product via the internet cuts out all the hassle with retailers
Trying to find a job in a rural area can be an uphill battle. So when west Cork resident Genevieve Sheehan lost her job in a local travel company, setting up an online business seemed the obvious solution.
“The company I was working for went into liquidation,” said Sheehan, who lives in the village of Goleen. “I’d worked there for five years so it was a big shock, especially as it happened in 2011, just as the company had survived the worst of the recession.”
As that company’s top sales person, she knew she had the skills required to push Ireland as a holiday destination, but she didn’t have the business nous. “Selling I can do, but anything to do with administration and form filling I can’t,” she said. Sheehan contacted Isabella O’Connor, a former colleague who was also made redundant and who lives in Ballydehob.
In 2012 the duo set up ShamrockVacations.com, selling luxury bespoke tours of Ireland to the American market. The business now has a turnover of €1.5m and employs eight people, all working from home in various parts of west Cork except for one — a Cork woman who lives in Turkey.
This was all made possible by going the online business route. “I worked from home quite a bit in my previous job, so my head was in that space,” she said. “We had two credit cards each with €2,000 limits, plus a €5,000 overdraft from AIB, and that’s what we started with.”
People pay for their holidays in full 90 days in advance, so the business generated revenues as soon as it started making sales. The biggest online challenge was getting a merchant account so they could handle credit card payments.
“If you look at merchant services websites, you’ll see that travel companies are in there with porn sites and online drugs as the three sectors they don’t want to do business with,” said Sheehan. “There was no alternative for us but to sell via PayPal for the first year until we generated a track record.”
Otherwise, growing the virtual business proved a doddle. “We have a US toll-free number, plus Skype, for customers and an integrated phone system so we can transfer calls between our homes as if we were sharing an office,” said Sheehan. “All our computer, CRM and accounts systems are in the cloud so we can share info. The technology now is just incredible.”
The company’s biggest overhead is software fees and the cost of search engine optimisation to ensure that, when people key in terms such as “castle vacations Ireland” or “chauffeur-driven vacations Ireland”, Shamrock Vacations features high in the rankings. “We spend money on Google Adwords and we visit major US trade shows,” she said. There are monthly meetings, “more for social or bonding reasons than anything else”, added Sheehan. The company supplies laptops and phone systems and inspects the home workspace of every new staff member for health and safety reasons.
A small but fast-growing business in a rural location can attract good people — often in similarly remote locations.
“We can go anywhere with this business model, there are no limitations — it’s hugely scalable,” said Sheehan. “We are currently diversifying into the luxury Chinese travel market, just to ensure we’re not completely dependent on the American market.
“I often look at huge office buildings in cities and I wonder, is it really the way to go? With an internet business like ours, you just don’t need it.”
Setting up an online business was the route Derrick Bell took when he was made redundant from his technology sales job in 2008.
“Soon after, my mother asked me to find a pull-along wagon for kids that she could use for an Easter egg hunt. When I couldn’t find one in any shop, I searched online but saw they were only available from the US and for about €270.”
He used the internet to source a manufacturer in China to help him design a prototype.
In January 2013 he received his first container-load of the finished article — 450 wagons, which sell for about €90 each.
His initial plan was to sell through retailers. “When I looked at the figures I realised that I just wasn’t big enough to be able to afford to let retailers take their margin,” he said
Instead he set up Tobywagons.com and sells direct to consumers. “You can create a website for under €100, including name and hosting charges,” said Bell. “You don’t even need to have a website designed professionally; you can just buy a WordPress ‘theme’ from €50 which will get you a suitable-looking website.”
Bell is now on his sixth container-load of Toby Wagons, which he stores at a warehouse in Dublin. He has also extended his range into balance bikes, sleds and aluminium dog cages for car boots.
Setting up a website is cheap and easy; search engine optimisation is harder. Initially Bell trained himself on SEO using YouTube, “ a fantastic resource”. He is now targeting the British market, and plans to spend about €500 a month on Google Adwords.
An online business is always open. “I get an order, send an email to the warehouse and they dispatch stock for me for a monthly fee,” said Bell. “I could run this business from the beach and I don’t have to pay rates.”
There are also supports to help businesses go online. The Online Trading Voucher scheme, piloted by the Dublin City Local Enterprise Office (LEO), is being rolled out across nine LEOs nationwide. These are worth €2,500 to owners, if they are used for ebusiness development.
“The amount of products coming into Ireland via the internet from overseas is colossal,” said Greg Swift, head of Enterprise Dublin City. The voucher aims to enable Irish business to gain a share of that through import substitution.
When Dave McGeady developed Wyldsson, a nutritious food range for sportsmen and -women, selling through health food shops was an obvious route to market. Instead, he kept the business online.
McGeady, a marathon runner who had lost his job in the med tech sector, sought a snack food that was also healthy. Unhappy with what he found, he set about creating his own.
Just under a year since its launch, the business employs two full-time and two part-time staff members. Customers include two of Ireland’s best-known golfers, plus customers ranging from the Leinster and Munster rugby teams to the LA Lakers, an American basketball team. McGeady hopes to turn over €500,000 of snacks online this year.
“If I sell through a health food shop, it takes me 90 days to get paid, which is a huge chunk out of your cash flow when you’re trying to build sales,” said McGeady. “Also, for a small business like mine, retailers are an awful lot of work.
“They expect you to do marketing plus deliver stock and stack it on shelves,” he added. “That’s a lot of hassle for a start-up. The alternative is to supply via a distributor, but then the distributor takes a chunk of margin too, so it’s another layer of complexity.”
Selling online means customer money is in his bank within a week of each transaction, easing cash flow. It also opens up markets that he could not otherwise service as a start-up. Already 30% of sales for Wyldsson are to the UK.
“Even more importantly, by selling direct, I get to develop a direct relationship with my customers,” said McGeady. “Many of my products were developed as a result of customers telling me what they wanted, from raisin-free versions of existing products to different pack sizes. That’s only possible because it’s an online business.”
For more details of the Online Trading Voucher Scheme visit localenterprise.ie