UK:STINKY INK COMES UP SMELLING OF ROSES
UK:STINKY INK COMES UP SMELLING OF ROSES
2005-12-14 at 11:27:00 am #13679
Stinky Ink Comes Up Smelling of Roses
Defrauded, burgled but not beaten (UK)
Most people who are swindled out of £32,000 and have had their stock worth £50,000 stolen in a raid might decide to give up and go back to PAYE employment. But John Sollars is one of life’s optimists and made of sterner stuff. His may be one of the unluckiest online startups ever, but he decided to persevere, putting his experience to good use, and quickly learned how to protect his web business from scamsters. Now with a turnover of £800,000 and projected target of £1.2 million for next year, it would seem he made a good choice.
Back in early 2002, John decided on a life changing move when he was in his late forties. He gave up a well paid salary as a sales director of an independent electronic components company, sold the family caravan, and put all his savings and energy into his own online business – http://www.stinkyink.co.uk. This sells every known make and model of printer cartridge – both recycled and originals.
Emerging after weeks of brainstorming, the domain name was designed to make people smile and be memorable, given that customers may only need to return once a year. He chose printer consumables after having huge difficulty tracking down the right cartridge for his son’s old printer. To power the web shop John picked Actinic software and has upgraded with each new release – “Actinic is the bedrock of my business and will be for the foreseeable future,” he declares
But the road to riches has been stony. Only weeks after launching in June 2002, the fraudsters homed in. Initially the site started getting small orders to different addresses all around the country with larger repeat orders each week. Before he realised his error he was servicing 7-8 orders a day and over six weeks had shipped £32,000-worth of goods that he never saw a penny for. Worse, the local police were uninterested in the crime because under our present system a crime is only judged to have happened at the source of the point of sale, i.e. at the fraudster’s location. As the sales had come from a ring of criminals all over the UK, it was too big a task to file reports at every local police authority and nothing would have happened anyway as the transactions were of low value.
Furthermore, the stolen products had all been paid for on John’s own credit cards as he had no track record with his suppliers and therefore couldn’t open an account with them. In fact he couldn’t even get a business bank account till he’d been trading a while. And because the sales were Cardholder Not Present (CNP), he as the merchant was 100% liable so could get no redress that way (unlike the customer who can get a full refund if he claims the goods did not arrive – another popular fraud tactic).
So on the verge of bankruptcy, John remembers that, “Early in September 2002 I was sitting with my dog in the office at home when the full enormity of what had happened sunk in. I had to make a decision whether to bother going on, or to get out and go back to a ‘proper’ job. But I picked myself up, dusted myself down, resolved not to trust anything or anyone in future and got on with it.”
He fought back by focussing on the business, using email marketing and search engine optimisation to generate extra traffic and within two years (2004) the debts were cleared and Stinky Ink was in profit. He even avoided another fraud scam that fooled his bank manager. A week before Christmas 2002 he had an enquiry from a London company to ship a £12,000 order to Nigeria. The company checked out and a courier turned up with the cheque. But John heard alarm bells and asked his bank to verify the cheque. They thought it looked kosher as the company existed, so it went in for clearing. Meantime John was receiving emails from an increasingly demanding customer but wisely he replied that the cartridges would be sent once the cheque had been processed. On New Year’s Eve he heard that it had bounced……..
Actinic’s software incorporates several features to help protect against fraud. For example, payment methods can be restricted by geographic region, enabling merchants to refuse credit card payments from high-risk areas. And shoppers can be required to accept the site’s terms and conditions before ordering.
When processing web sales, John looks out for:
* Orders for three HP original inkjet cartridges as these are easily sold in the pub or a car boot.
* The customer is using a free email address, often from Yahoo.
* The delivery and card addresses are not even close geographically.
Now he always checks dubious card details with his payment provider (Protx) to see if the address, security code (on the back of the card) and postcode match. If not, he emails to cancel the order and refunds the amount immediately.
The run of misfortune didn’t stop however. In March 2005 the alarmed and barred warehouse he’d just moved to was burgled and his whole stock removed overnight. As a ‘commercial’ incident the police were again not interested despite the value of the products totalling £50,000, and it was fortunate that everything was fully insured.
In comparison, the website built on Actinic Developer (which allows you to create multiple stores from one licence) has always worked smoothly and delivers the orders from all parts of Europe, every day of the year – up to 100 per day in fact with an average value of £60 and a visitor : customer conversion rate at an impressive 8%.
The StinkyInk catalogue holds nearly 800 different lines with about 5,000 options yet cost only £1,250 to set up in 2002. The site, designed by John’s teenage son, has been geared to make it incredibly easy for visitors to find what they need, as quickly as possible. “Customer service is the crux of our business and having ISO9001:2001 we make sure that whenever we can we will implement any customer feedback to improve the site or our processes,” says John.
“Having implemented various Actinic add-ons from Mole End Software to improve our efficiency we are now able to pick, pack and despatch an order in a minute. I want to provide, or exceed the sort of service that I expect when I shop online and believe that we provide an exceptional service, so if an order is hanging around after 24 hours I get really cross.”
As for the next step, John has launched http://www.mega-office.co.uk to appeal to a more corporate audience, and plans several other new sites over the next year.
Finally, John has this to say to anyone thinking of setting up online:
* You have to go for it, but you need patience, commitment and hard work. Running an ecommerce business is the same as any other business, to be successful you have to give it 100% commitment and dedication.
* If it seems to good to be true, then it is and don’t believe all the rubbish about being able to make millions without doing any work – it doesn’t happen in any other business and it certainly doesn’t happen within ecommerce.
* Always value your stock every month and ensure your insurance policy has sufficient cover.