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28
February
2006

Valentine’s Recap

Kathryn and I spent the last few weeks analyzing our Champagne Wishes Valentine’s Day sale and the final numbers are in. We did well, but like every new business we’re struggling with startup issues that eat away at the bottom line. We received wonderful feedback from our online customers and the wholesale customers came back for more, which is very encouraging. In addition to the brownies, we debuted our Lemongrass & Ginger, Earl Grey & Currant, Sesame Spice, Chai Almond and Green Tea cookies at the Wild Lily Tea Room with great success and have had requests from other tea shops for orders. We were also asked to cater a wedding and make corporate gifts, bringing our prouct into new markets.

The Valentine’s Day sale was great to validate our concept, but we still need to improve production. We need to think large scale and tie up all the loose ends that we let slide in order to get the ball rolling. After looking at the “numbers” I realize how important every dollar is when it comes to starting a new business. People often say, “Aw, it’s so cute that you’re starting a bakery,” but when you’re looking at spreadsheets it’s not exactly cute. I have learned that in order to be of value to our customers and the community we must make a profit, otherwise we will be out of business and that doesn’t do anyone any good. The biggest areas of improvement for Amai include:

1) Production

Shipping individual orders is an incredible amount of work. Each package must contain the right number of boxes ordered, be sufficiently padded for transport, include an optional gift card and packing receipt and have the right mailing label on it. All of this is done after a long day of baking and putting the brownies into their decorative packaging. I had great help from loyal Amai supporters, Colleen and Andrew (thank you!), but it was primarily my responsibility and it is too much for one person to handle. A tired mind makes mistakes and burns out quickly. In the future, I need to be more efficient and have more help. That’s where the importance of a profit comes in, and we will soon have enough in our budget to hire a proper staff.

2) Shipping

During our Christmas sales run we used the US Post Office because of their affordable rates, but since they don’t provide sufficient tracking information or an exact delivery date they are not enough of a guarantee for us to use for long distance deliveries. For more control over our Valentine’s Day shipments, I evaluated FedEx, DHL and UPS as alternatives to the post office. Each had good and bad points, but I finally chose UPS since it had the most comprehensive small business tools available online and I could easily access UPS dropoff points in my neighborhood.

This choice brought with it a great crisis of conscious. UPS is not a friend of mine. In the past I have had bad experiences with their service and avoided using them when possible. Their customer service agents have insulted me on the phone, drivers have hung out of the truck door and flipped me off while driving and delivery men have claimed to ring the doorbell for deliveries but never actually did (once they even delivered my package to a house three blocks over.) Even with this in mind, I chose to put my personal experience aside and have faith that their online claims of reliability and good service would be true. It was also convenient, and I needed that when it came down to the wire to get packages out the door.

In the end the packages were delivered as promised, which was the most important thing, but I am still not happy with UPS. For my first shipment I went to the UPS store and filled out the paper form (called a “Way Bill” by UPS) for each package since that is what UPS sent me in their welcome packet. The customer service agent took the packages without saying a word, and I later found out that each package that uses this paper form is charged a $5 processing fee. $5 per package!?! That adds up fast. On a later visit the owner of the UPS store was really helpful and told me how to do everything online to avoid charges. (You can also schedule a driver to come pick-up the packages, but we were in a rush to get them out and didn’t want to pay the extra pick-up fee.) After that incident I started doing everything online, only to get bills in the mail the following week with charges I did not agree with. I called the UPS customer service number to ask questions about the charges, and came away frustrated once again. In one case there was a $10 address correction charge that I did not request, but the UPS agent told me I’d have to call the customer to get more details about the change request before they could help me. Sorry, but there is no way I will bother a customer over a $10 shipping charge.

Another huge lesson learned is that I need a more comprehensive online shopping cart that enables me to calculate exact shipping charges and pass it on directly to customers. The basic PayPal shopping cart requires that you to charge a flat rate for shipping or a set fee based on a range of prices, and neither work well for us. I know there are plenty of options available to calculate exact shipping rates, but when rushing to get ingredients and packaging in place, it was the last thing on my mind. It is now the first, since this cost us most of our profits in the end.

Before starting this business I constantly evaluated other people’s products and said things like, “If only they did such and such they would be so much more successful…” While it may be true, I now understand that you can’t have everything go exactly the way you want it the first time around. I’m sure most companies, like Amai, have so many ideas and intentions that are never realized because of a lack of time or resources. All we can do is keep working up towards our end vision. Amai’s goal is to keep improving every step of the way, and we certainly did that between Christmas and Valentine’s Day. Now it’s back to the drawing board to come up with our regular menu, production schedule and packaging. We are currently looking for our own kitchen space and will be hiring staff soon. Now the real challenge begins…



11 COMMENTS SO FAR...

Kristin says on February 28th, 2006 at 7:09 pm:

Well if you only move to CA your other co-partner can help you out!

Jason Truesdell says on February 28th, 2006 at 9:55 pm:

For YuzuMura.com, I found that I mostly prefer FedEx’s online and offline experience to the post office, and FedEx offers me on average better rates. I get overly confused by the bewildering array of rules that I have to follow to make the post office happy, although they have the price/delivery speed for most packages in the 0-2 pound range.

I’ve never paid for the privilege of dropping off packages and the only surprise charges have been when I miscalculated the weight or dimensions (both in my favor and in theirs). I once apparently accidentally set up a daily pickup for ground though I never used it, but when I discovered the charge, FedEx reversed all of them.

Also they give me good volume discounts on Express, especially if you generate the shipping labels online. After a quick call to them I even started getting a deal that beats their automatic 10% online discount by a wide margin, and a small discount on ordinary ground and home delivery stuff.

There are some decent software packages that do automatic shipping calculation, but PayPal isn’t one of them. Mine is built in to my storefront software, and mostly works reasonably well.

I know the stress that comes from filling individual orders, and I’ve made a few mistakes myself when I got rushed. I wish you luck on everything.

Kelli says on March 1st, 2006 at 12:28 am:

Hi Jason–This is very helpful, thank you. The fact that FedEx offers a 10% discount for online printing is reason enough to switch. The reason I put this long story up about shipping is that I assumed there were many other people out there asking these same questions, and it’s great to hear how other people are doing it. Good luck with your business.

Karen says on March 1st, 2006 at 9:47 am:

Hey Kelli, the cookies sound good! Were those similar to the ones you made for Jee around Christmas time?

Let me know if I can help you with the packing and stuff. I’m a sucker for making things look pretty. :-)

jee says on March 1st, 2006 at 12:00 pm:

Kelli, those cookies you made me for Christmas were so cute and delicious that I ended up eating the ones I meant to give away as gifts.

Nahal says on March 2nd, 2006 at 6:45 pm:

wow. its truly a challenge getting started, but i have a lot of faith in you and amai. Amai has my support and love! keep goin’ girl!

Carlos from Italy says on March 3rd, 2006 at 2:50 pm:

Ciao Kelli & Kathryn,

I want to say that your cookies are delicious! There are no other words to describe them. My girlfriend Colleen has bought me 3 boxes of cookies: Chai Alomond, Earl Grey and Currant and my favorites Lemongrass and Ginger.

Everybody in the family ate them!!! I had to hide the boxes from my mother so I can enjoy them next weekend.
Here in Italy we like eating those types of cookies while drinking Prosecco wine as a dessert.

I can’t wait to come back to New York City and get more delicious cookies from you girls.

Molto buono and Good luck!

Kelli says on March 4th, 2006 at 5:40 pm:

Hi Carlos, Karen and Jee — You are official Amai testers! Thank you for your help in proving our cookies and brownies are worthy of the NYC market :) Looks like they’ll be coming to more stores in the area soon…

Laurie says on March 4th, 2006 at 6:48 pm:

I am amazed, but not surprised, at all you have accomplised! As for other thoughts on the subject, refer to Kristin’s comment! Extra help would not be a problem from this supporter. In fact it would be a pleasure…

Mary says on March 5th, 2006 at 12:14 am:

You have accomplished a great deal in a short time. You have already learned that the small details are of big importance to a business, especially one just getting off the ground. I think Amai has a great future and you along with it.

pj says on March 9th, 2006 at 10:43 am:

hello! I’ve been reading about the progress of amai ever since i stumbled on your blog (got here from chubby hubby’s blog). You’ve inspired me to start a food business as well.
[just my two cents worth on the courier services. I've sent through FedEx and DHL before (never tried UPS) and I prefer DHL myself. Here (in the Philippines) they pick up your shipments free of charge--I just call their toll free number, they give me an estimated what time the delivery guy will arrive at my house, and they arrive right on schedule. Their online tracking system is really accurate, and their staff are very friendly and helpful. Then again, I could just be speaking for the DHL here where I live.. Anyway, I hope that helps.]
in any case, i hope amai keeps growing. best of luck!



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