Case Study: MexicanVanilla.com
From early 2004 to May 2007, I have been running MexicanVanilla.com, a niche seller of imported Mexican vanilla. When May 2007 rolled around, I decided the time had come for me to move on to other projects and the domain was returned to its owner. I had been leasing the domain name. In hind site, don’t EVER do that. You invest huge amounts of time promoting it, and when it comes time to move on, you can’t sell you work. Big bummer.
History
When MexicanVanilla.com launched in 2004, it started as a simple site powered by OSCommerce, an open source ecommerce solution. While OSCommerce worked fine, it was extremely hard to customize and not very friendly for the end user. It did however do its job.
The initial marketing focused on PPC advertising with Google and Yahoo. At them time I didn’t know much about SEO, but I still tried to build up inbound links and do various other promotion online.
Overtime we became a recognized authority site by the search engines and started ranking better. As that happened we diminished our PPC spend and let our organic traffic carry us forward.
Rankings and SEO Efforts
Initially there was some link building done. Some of the best links we got were from trading reciprocal links with recipe and cooking related websites. We also did some pages on 3rd party sites that were setup with a friend who was a search engine marketer. All of these techniques were of course considered OK at the time. Now however the search engines frown upon those.
In hind sight, our link building efforts were rather poor. It should have been an aggressive thing across the life of the project. We also never took the time to get the site listed in any directories. We did however try to get listed in DMOZ, to no effect. Damn corrupt, lazy editors. MexicanVanilla.com was number one in its industry, and could never get listed.
The OSCommerce version of the website had a very hard time ranking. It was never able to rank well in Google. Yahoo and MSN however picked up on the site very nicely. As soon as it was ranked high in Yahoo, Yahoo based PPC was stopped.
When the CSS version of the site was launched in February 2007, it had an immediate impact on rankings. It immediately jumped to number 6 on Google, and after a couple weeks number 3 and finally number 1.
With the release of the new site, a revamped and SEO optimized dessert recipe section was added. The recipes were grouped into sections such as Brownies, Cookies, etc. with a list of recipes under each section. Each section was optimized for their terms, such as “Cookie Recipes”. Each recipe was optimized for its phrase “Chocolate Chip Cookie Recipe”, “Vanilla Pudding Recipe” etc. Optimizing this section was an excellent thing. Our Google analytics logs show that the site was getting hundreds long tail keyword hits for recipes on the site.
At the time of releasing the site back to the owner, MexicanVanilla.com is ranked #1 on MSN, #2 on Yahoo and #2 on Google for the term “Mexican Vanilla”.
Traffic Statistics
Overture estimates (2007) that there are ~750 searches per month for the term “Mexican vanilla”. While ranking #1 or #2 across all the search engines, MexicanVanilla.com received 1,300 unique visitors per month. The peak season of November and December brought 2,000-2,500 unique visitors per month.
The Business Model and Operations
The Product:
Reseller of a product, plain and simple. The supplier was a local company. So I would pick up the product locally.
Shipping:
Ah… I love this part.
All shipping was handled by the local UPS store. When I would pick up stock, I would drop it off with Robert at the UPS Store. Robert and crew received an email copy of all orders. They would then package and ship the order. When they had the tracking number they emailed that to the client for me.
Package shipped. Customer has tracking number, which, makes you look very professional. Order has been handled. On a side note: if you don’t get the customer a tracking number, they will email you non-stop about the status of their order. Get them a tracking number so they don’t harass you!
Ya have to love that. Hands off order fulfillment. Perfect for an internet business. All 100% without my help. Let the pros do what they are good at so you can do the same. I am a developer, so I could focus on building and coding. The UPS Store are shipping pros, and they did a great job with order fulfillment.
Support:
I handled all the support issues. I hated it. So many questions. No one seemed to ever read the FAQ on the site. Most responses are copy paste from the FAQ. Other questions where answered as quickly as possible. But I have to admit, I hate handling support. It is a distraction from what I consider important (aka: coding) work.
But to run this type of business, handling support quickly and efficiently IS CRITICAL. Customers are always impressed when online businesses reply quickly. It makes you look more professional. In hind sight, I should have setup an instant auto reply to all inquiries. Something professional sounding, telling them that we would reply shortly and to reference the FAQ for common questions.
Guarantee:
We offered a 100% satisfaction guarantee. That is one of those reassuring things that buyers like to see. And it does affect sales. In the 3+ years running the site, we got 2 returns. Yep, just 2. And one of the orders that was returned, wasn’t ours. Huh? A customer bought from 2 sources to try different types of vanilla. He returned the one he didn’t like. He didn’t like the competitors, but returned it to us on accident. LOL. Just one of those things…
The other customer return was a miraculous rejection. Interestingly, he became unsatisfied with his order several hours BEFORE it was delivered (according to the UPS delivery time). He was nice enough to open the product before sending it back though… jerk. “I really didn’t like the vanilla…” I see… glad you tried it (the vanilla was at the same level as an unopened bottle). Jerk.
You do run into occasional problems, but they are few and far between. Must customers are very reasonable and just want to get their order in a timely manner.
Shipping Problems:
We did occasionally loose a package. It does and will happen. When you ship regularly and continually it will eventually happen to you. Shipping insurance is for this. It pays for you to ship the product to the customer again. Very nice.
Broken Merchandise:
The UPS store always did an excellent job packing our product for us. Even though we were shipping heavy glass bottles, we never had an order broken while being shipped.
Newsletter:
As a fun experiment, we started a newsletter. Dana, a friend of ours, wrote it. And she did a great job! People loved to get her newsletter. It would discuss recipes and cooking and all those things that guys just don’t understand. Since most of our buyers were women, this added a much more personal touch to our business.
We got up to about 180 newsletter subscribers. We tried to provide them with the best content we could and didn’t spam them with ads and things like that. However, the occasional offer in the newsletter did have an impact on sales.
My Thoughts
The Good
This was a total learning experience for me. Getting a site to the top of the search engines is a very satisfying feeling.
I never really expected this project to make much money. It just wasn’t feasible with shipping costs and the product margins. I learned that you really need to be careful with what you choose to sell online. Low margin, high shipping cost items combine for poor profits. That was fine for learning, but going forward, all projects MUST make money.
The Bad
I learned something important. I HATE doing customer support. There is nothing to ruin your day then responding to customers. I just can’t do it. I am to emotionally attached to the projects I do. I know, its dumb. But true in my case. So, I need to be separated from problems. Other people need to manage them. Period.
My main reason for getting out of this business is very simple. The niche is to small. The site has a 2% conversion rate (pretty good), but while ranking high across all the major search engines, the site only draws 1,300 unique visitors or so a month. That works out to 26 sales a month. Given that profit off most sales is ~ $7, that works out to an amazing $182! Blah. Bottom line, not worth the effort.
And: Never build a project on a domain you don’t own. This is a no brainer. If you don’t own it, you can’t sell it when you are done. That just stinks. Good lesson. Lesson learned.
Conclusions
I’ve been really grateful for what I have learned from running this site. It was a great learning experience. I got to practice search engine optimization, learn about business systems and ecommerce. All good things. Now its time to move on to bigger and better things.
So what did I learn while running MexicanVanilla.com?
- Start with PPC, but SEO and natural search rankings are the way to go!
- If the niche is too small, you won’t make much money, even if you are number 1. Bummer. AKA: Don’t dream to small.
- When it is possible, outsource!!! There are quality people out there who can do a better job than you can. This frees up your time to focus on building the business, not running it.
- Customers like interaction. Lots of it. Send them multiple notifications.
- We got your order.
- Your order has been processed and will ship shortly.
- Your order has shipped, here is your tracking number so you can watch its progress.
- Follow up 2-3 weeks later:
- Did you get your order?
- How was our service?
- What can we do better to serve you?
Posted: January 19, 2008 | Under: Business
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