Sramana: So now in addition to your auctions, you are also offering traditional e-commerce on your website?
Nicole Brewer: Yes. We still have our auctions as well.
Sramana: What infrastructure do you use to complete your auctions? Is that still custom software?
Nicole Brewer: We have a partner that we are using. We post a picture along with a price and quantity.
As soon as a customer sees an item that they want, they just post in the comment that they want the item. They provide us with the size and email address. Within minutes, they have an invoice sitting in their email.
They click on that email, open it, and pay for the item. We ship the item out the next morning, or send the item to be monogrammed after which it is shipped out.
Sramana: What happens if a customer does not pay within a certain amount of time?
Nicole Brewer: We have something called second choice invoices. If an item sells out and you were not on the initial winning list, and one of the initial winners decides not to pay their invoice, then the item will be offered to you. It will be available for 48 hours. In that case, we pre-authorize the credit card.
Sramana: It sounds like there is some complexity in the algorithm needed to manage that process.
Amy Laws: I think what was interesting about how we started and what we were doing is that it was a very unique approach. We had to pave our own way. That’s why we built custom software initially. We made some errors but we made some great decisions along the way. That has been a lot of fun.
Sramana: What is an example of a major goof up?
Nicole Brewer: When we initially decided to do private label, we initially were working with just one factory. We quickly realized that took away negotiating power. If there were any floods, labor strikes, or anything like that our business was in one person’s hands. We have since diversified the countries and towns we are in. That has given us greater negotiating power.
Sramana: How have you used Facebook as an advertising channel?
Amy Laws: Facebook has been our primary advertising avenue. We did not advertise for the first year. We did not know what we were doing. Our first 10,000 fans were completely organic. Once we hired someone to do some marketing strategy and consulting, we finally got into a groove with Facebook. We have since started using Google AdWords.
Word of mouth is still extremely powerful. Running a business on social media forces you to take care of your customers in a way that retail has never had to do.