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:
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.
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…