Happy (Online) Holidays! E-commerce puts a jingle in the Kringle.
“I don’t think people are ready for the holidays,” said Alynn Patzer, owner of Sweet Gift Express in Madison, an online custom gift basket company. At the time of this interview, Patzer was not alarmed by a slow first week in December. “The second and third weeks are the busiest,” she said, speaking from nine years of experience, experience that also changed her holiday business plan this year. Rather than offering a full slate of between 25 and 30 different gift baskets this holiday season, Patzer has pared down to just one — her most popular holiday seller. It’s a strategy she believes will work.
Patzer, a production and inventory control specialist who has twice been laid off from her job at Thermo Fisher, has experienced a similar roller-coaster ride with her gift basket business, but like clockwork, holiday orders are beginning to mount. Each year, she plans early for the holiday onslaught, when she usually sells “hundreds” of baskets containing a selection of Wisconsin popcorn, crackers, cheese spread, sausage, jellies, fudges, and the perennial Wisconsin favorite, Cowpies — among other things. “UPS has to empty out their trucks before they come over here,” she laughed.
It takes planning, early ordering, and cash upfront. Luckily, an unnamed benefactor loans her the money, then gets paid back every year after the holidays. “I make a certain amount of baskets early, to get a head start,” she said, adding that timing is critical because some items in the holiday gift basket have shorter shelf lives, and shrink wrap — if left too long — can begin to loosen. The red and green bushel baskets used for the holiday basket assembly come from Texas, and can take a week to arrive, and other items must be picked up or ordered well in advance.
There’s a lot to be made in a short amount of time, she explained. “I try every year to do it on my own, but always end up hiring two or three full-timers to help.” Patzer’s holiday gift baskets sell for $60.95 plus shipping on the Wisconsinmade.com site, and she charges sales tax. “I collect it,” she said. “It’s easier, and the State needs it.”
Patzer attributes her success almost entirely to the Internet, and more specifically to her status on the Wisconsinmade.com website, where her product is featured as a Top Gift Basket. “Most of my business comes through [that site],” she said. “I have my own website, but don’t get a lot off of that.”
Million Dollar Momentum
That’s music to the ears of Linda Remeschatis, founder of Wisconsinmade.com and winner of the Make Mine A Million contest, whose e-commerce company surpassed the million dollar mark last year. With over 250 artisans, manufacturers, and bakers featured on the 11-year-old site, Remeschatis said the holiday season makes up for about 50% of the company’s annual revenue. “Sales are very significant for us,” she said. “We plan ahead, and we all turn into customer service people — answering phones and taking orders. It’s an exciting time of the year for us.”
Wisconsinmade.com has blossomed into a $1.5 million company with eight employees, and Remeschatis sees no reason why the company can’t double its staff and achieve the $5 million mark within three years. “The last five years have been consistent and steady,” she said about the company’s growth, “and that’s phenomenal for any business in this economy.” Nationally, e-commerce sales have shown increases of between 15% and 35% annually, according to Remeschatis, adding that Wisconsinmade.com is “right in there.”
The company first started out offering Wisconsin-made food products, such as Kringle, a perishable item. “[Vendors] get our orders, and some will bake to order and then ship the product.” On the other hand, meat vendors, she explained, often freeze their products (particularly smoked meats) ahead of time, shipping them as the orders come in.
With up to 70% of Wisconsinmade.com orders generated from out of state, Remeschatis knows people are finding the site through search engines, but the company’s success has also benefitted, she believes, from the growth of high-speed Internet, a spike in computer usage, and the convenience-factor offered Web consumers. She also credits the Buy Local campaign as playing a significant role. “In this economy, consumers are anxious to support local businesses to help keep tax dollars in the state,” Remeschatis said.
Down in Monroe, Wis., workers furiously fill holiday orders at Colony Brands, Inc. (formerly known as The Swiss Colony). The hot seller this year, according to company president John Baumann, are the company’s truffle products, holiday cakes, tortes, and yes — fruitcakes. “They are an excellent seller!” Baumann insists, of the oft-stigmatized product. “This is the only time of the year when you’ll be able to buy them.” Meanwhile, the company makes most of the food products it sells, including the aforementioned truffles, cakes and bakery, as well as candy, cheese spreads, and cheese logs. It does not make the cheese or sausage, but scrutinizes all vendor products offered.
While Internet ordering is here to stay, Baumann said they still complement catalog orders. “Twenty years ago, a paper catalog would drive 50% of sales or more through mailed-in orders. Now, [mail-ins] represent about 10% of incoming volume, with the rest divided between 800-number telephone calls and the Internet,” he said.
The transition to Internet ordering was a gradual process at Colony Brands, which added its first internet shopping sites in the late 1990s, when the technology was used more for ordering rather than shopping. These days, catalog sales still drive the business, according to Baumann, but have had relatively little effect on company operations. “[Internet orders] have forced software changes, but not changes to the business itself.”
Colony Brands has locations in 13 different cities and employs about 1,100 full-time employees. At this time of year, the company hires about 6,000 temporary workers to help handle the holiday rush.
“Catalogs still drive an overwhelming percentage of sales,” Baumann said, “but more consumers are coming to us via search engines.” The holiday onslaught typically begins in September, and sales spike by the time Thanksgiving, Black Friday, and Cyber Monday roll around. Colony Brands receives half its food business sales from December 1 through Christmas, concurring with Patzer’s (Sweet Gift Express) comment that consumers seem to be waiting later and later to place orders.
Such Johnny-on-the-spot ordering can cause estimating headaches from a business standpoint.
In fact, Baumann calls the Internet the great equalizer. “The catalog still drives a lot of our business, and consumers are also finding us online without the catalog. But because there are so many more competitors out there now because of the Internet, it’s kind of a push.”
Indeed, a Google search for cheese gifts produced thousands of results — a new fact of business that Baumann said requires constant monitoring.
And that’s good news for fruitcake lovers.
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