| Category | Industrial Equipment & Parts |
| Business Type | Online Retail |
| Study Group | Phase 1 |
| Status | Completed |
| Company Name | Ultimate Washer |
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Ultimate Washer, located in South Florida, was an established eTailer specializing in all things related to Pressure Washers. They had a web presence that contained valuable information, which was the primary source of their web traffic from the search engines. With changing Google algorithms and economic circumstances, the Company was seeking an e-commerce strategy to rejuvenate their operation.
While Ultimate Washer had an intimate knowledge and understanding of their niche industry, they lacked the expertise to manage information and set up workflows. This led the Company to accumulate information over the years which could not be used for analytical purposes. It was stored in multiple locations without any structure. In addition, there were no established procedures for carrying out tasks. Staff would do whatever was needed to service their workload.
The Company became successful over the years, with growing revenues, as they enjoyed significant amounts of traffic driven by the search engines. However, as more competition moved into the same space Ultimate Washer’s profitability suffered. When Google changed their algorithms, traffic dried up, thus causing a drop in their order volume.
Ultimate Washer found itself with shrinking revenues and shrinking margins. A new revenue model and new revenue channels were needed, as the Company did not have the budget to run a paid advertising campaign.
A quick study of the Company’s financials indicated that the profit margins built into the pricing model was not healthy enough to service the business and generate profits. Since the past orders primarily came from organic search engine listings, paid advertising never became necessary. This resulted in the company excluding customer acquisition cost from their margin calculations, which was no longer feasible.
In addition, even though the Company generated significant revenues through web sales, they never actually did their own fulfillment. They sold items, which were then drop shipped by their vendors. So, they were not set up to handle the fulfillment of large volumes of orders in-house.
Finally, even though Ultimate Washer used an order management system, it was outdated, lacked functionality and had several flaws in its data structure. This resulted in accumulating unverifiable historical data. For example, they had item records associated with vendor records, but when they looked for the vendor record it would appear to be deleted from the system. In short, an asset of the company, its historical information, was not in good shape.
Our e-commerce strategy was to set limited but clear objectives for Ultimate Washer:
- Learn how to buy the right items at the right price
- Learn how to price for maximum profitability while staying competitive
- Build the processes and the algorithms to create a scalable revenue base.
This strategy was best served by starting an Amazon FBA business. Though Amazon has demanding requirements for systems and data integration, which could be overwhelming for any business, our Amazon expertise and experience removed the learning curve and possible errors.
We created a Systems Strategy that removed the dependency on their existing systems and focused on the integration of essential data with Amazon Infrastructure using our proprietary e-commerce Platform.
We applied our proprietary methodology to analyze historical financial data, with the focus on cost and expense. This led us to improve the margins in the pricing policies.
We then moved onto identifying what products to sell on Amazon that could be sold profitably and competitively, followed by swiftly launching the selling operation by homing in on winning products.
We built a robust pricing algorithm that allowed the company to set the optimum selling price dynamically to jump start revenues.
Our actions ultimately resulted in:
- A new e-commerce strategy and a modified business model re-invented the Company’s revenue model
- Full analysis and implementation of new channel strategy with sustainable growth rate and expanding product lines
- Achieved almost 100% growth in Year 2 with significant order volume and growing revenues.