Business and Operations
By Laura Aiken
In 10 years of running an online cookie delivery company, Alan Zelcovitch has come across every imaginable problem.
In 10 years of running an online cookie delivery company, Alan Zelcovitch has come across every imaginable problem. Through software development, he has made them all go away.
Zelcovia Cookies is Toronto based and keeps its owner busy year round, with Christmas being the peak season when he brings in a few extra hands. Adding labour, however, isn’t how Zelcovitch says he wanted to solve the challenge of managing increased sales in a growing company that has unique challenges, most pressing of which is a short delivery window for online perishable food sales. Instead, he turned to his computer background and made a big investment that has paid him back in spades.
He first figured out that 50 to 60 per cent of time spent on any given order had nothing to do with baking or packaging. Baking the product was not the largest part. There were many other tasks that took even more time, and that is if nothing went wrong, like a bad credit card. Here is what else took more than half the time.
- Talking with a client on the phone
- Using the terminal to key in the credit card details
- Using QuickBooks to provide an invoice
- Logging into the courier website to type all the details of the order to be picked up
- Calculating what to bake on any given day
- Writing a gift card for the recipient
- Writing an address label for the package itself
- Numerous other miscellaneous tasks
At least 50 per cent of his time on paperwork, and he wanted to eliminate this without adding more labour. He began using Excel to standardize his administration. Step 2 was quite a bit bolder. He spent $30,000 on a customized online ordering system and back end management solution. This was a boon for the business, and he says his paperwork time became three to five minutes per order rather than 15 to 20 minutes per order. There were still hiccups along the way and work to be eliminated. His programmer advised him it would take another $10,000 to make the administrative work go away. However, like a home renovation, it never goes quite how you planned it. By the time Zelvovitch added all the bells and whistles to it, like the ability for clients to add their own logo or photo to the card, he had spent double the original estimate. He says he paid the whole bill in the three weeks at Christmas just by being able to produce more orders because five hours of paperwork a night disappeared. He had the software so finely tuned that, he says, “We disallowed the customers to complain.” By that he means that any error that they make because they didn’t take the time to input proper addressing information is well documented in the order form so that he can go back to them and prove they didn’t do it right and if required charge an additional fee to re-deliver.
The system is simply built to know all the problems of online ordering. It’s also built to help Zelcovitch make more money when demand is high. It is set up so that Zelcovitch can enter a percentage and all products will decrease or increase by that amount, which is great on holidays or if you are having a sale. It can also modify special single-day and specific time frame shipping charges. For example, you could charge on Valentine’s Day when demand is high. These two features work well for sales, but what he says he loves is how much of a boost to the bottom line it can be. On Valentine’s Day, increasing the price of the product and shipping across the site earns him an extra $5,000, he says. And that is only for orders that come in on the 14th. He can adjust prices so customers are rewarded for advance orders, but pay more for rush deliveries. At one time he found himself losing money on deliveries and solved this problem by having the system do customized charges by postal code. He also found that customers often need to specify the time of delivery, so while he includes 9-5, he also allows them to pay more for delivery in a smaller window, such as 9-12.
On the back end, the system communicates directly with the courier and the bank, who are made aware of orders in real time. It recognizes out-of-town shipping and is so smart it doesn’t try to submit those to the local courier. The system prints the shipping label and inscription card with pristine colour laser quality on special perforated paper to make adding it to the basket lightning fast. It is so smart it is impossible for Zelcovitch to accidently deliver an order a week early if he accidently file it incorrectly. When the order is delivered, it lets the sender know it has arrived by e-mail (and even lets them know who signed) within two minutes of delivery, he says. It takes five seconds per order for the software to produce a label, card and courier slip for each address. The system also invoices the client and deposits money directly into the company account.
The system incorporates other, more subtle, sales-generating tactics for Zelcovia. It automatically e-mails senders of a birthday or anniversary gift a coupon 51 weeks later asking if the client would like to reorder. It automatically e-mails senders a survey two days after delivery, then e-mails coupons and a Facebook link if the customer rated their services well. It also has a built-in loyalty program that automatically enrolls everyone by using their e-mail address.
The software addresses client communication needs. Zelcovia can leave a special message on a specified date, which is useful if there is poor weather and extra time is needed for deliveries. For example, during the holidays when someone selects a certain date and knows his orders are nearing capacity, he can have a message pop up that says “We are getting close to capacity, may we suggest Thursday to order if that is not an issue for you?” He can also put up an order block that helps manage workflow. He can prevent people from ordering when he is booked solid by graying out certain times of day, or entire days.
The system is also intelligent about the baking aspect of the business. It calculates Zelcovitch’s bake list, basically telling him what to bake, and it knows how long it takes to bake and cool the cookies, which assists him in time management.
From a user perspective, the order form allows the customer to fill out all the needed details and add their own logo to the inscription card, which is handy for corporate gifting. People can also add a photo to the card instead of a logo and choose to add a balloon.
All in all, Zelcovitch’s customized system has 336 features that help him run his small online business at peak efficiency. Investing in the software has, he says, made the ordering mistakes he was making go away and cut his labour time required for each order by 50 to 60 per cent. It was designed to eliminate an employee and make him more money, which he says it has done successfully.
“I used to not want to spend money, now I will spend whatever it takes to make the problems go away.”