Ten years ago, after building catholicstore.com into the largest on-line Catholic retail presence and finding myself out of work, I decided to be completely foolish and open my own Catholic e-commerce store. This post is a list of the major errors I made in running the business in no particular order. I hope they help you with your business.
Back in 1999 when I first considered opening a Catholic store in the event that Y2K turned out to be a very expensive joke, my aunt came up with the store name, Aquinas and More. I ended up working at The Catholic Store in Denver for two years instead, before finally launching the business. I learned a lot about programming and e-commerce during that time and thought I could handle running my own company.
Aquinas and More opened on the Feast of St. Therese in 2002 in a 144 square foot office in Black Forest, Colorado. My mom and I and a family friend spent most of our time adding product to the website because we weren't really getting many orders. In fact, the printer would automatically spit out orders as they were placed so we always jumped to the printer whenever we heard it warm up: "Look! We just sold TWO books!" Because of the Iraq War, our sales of military / St. Christopher medals took off and the Fulton Sheen Wartime Prayerbook became our hottest selling item. We sold several hundred.
After one year in our tiny space, the new owner of our office complex decided to turn it into a day spa and we were asked to leave. Fortunately, a Catholic Realtor happened in to our store and asked if we had considered opening a retail store in Colorado Springs.
Mistake #1: Opening a retail store.
We found a nice location on one of the main roads in town in between two of the largest Catholic churches in town.
We hired a store designer that we found in the Catholic Marketing trade journal. Barney Paradise had designed a gorgeous store for Gloria Deo in Nebraska and he did a stellar job on our store. Our product mix was about 60% books and media, 20% jewelry and the remainder gifts and church supplies.
Our customers loved the store and we regularly received compliments about it. There was only one problem. In nine years the store never broke even. No matter what we did - bulletin ads, sponsoring local events, faithful shopper club, parish book fairs - nothing got our local sales over a plateau far below break even.
We shut the retail store at the end of 2012 but I really should have closed it five years earlier.
In hind sight we should never have opened the retail location. The retail store was a romantic dream that I had that I thought could be supported by a city of a half million. It proved to be a distraction from our web business and the costs far exceeded the return.
Mistake #2: Growing our selection faster than we grew our on-hand inventory.
Having the largest selection doesn't mean anything if you can't fulfill really fast. Amazon set expectations and we never were able to meet them because we spent too much time adding items to the website instead of figuring out how to fulfill orders faster. This resulted in a lower conversion rate because our site calculated shipping times that were longer than people found acceptable and resulted in a lot of time being spent by our customer service department answering questions about shipments that didn't arrive immediately.
Mistake #3: Growing our staff instead of becoming more efficient.
In 2008 we had our best gross sales year - 1.7 million. We also had 12 full-time people on staff and at least three part time at different times of the year. We finished the year in the black by about $2,000. Payroll ate us for breakfast and then came back for seconds. Our fulfillment department had three full time and two part time people and was barely keeping up. After our 2008 Christmas season we reworked our receiving and shipping process and last year did 1.4 million in sales with one full-time, one part-time and occasional help from other employees. Payroll is the easiest budget item to let get out of control and between it and the taxes you pay on it, it can destroy your business.
Mistake #4: Not hiring a dedicated employee to handle church goods sales and expand the business.
In 2007 we launched catholicchurchsupply.com after seeing a lot of sales for church goods on aquinasandmore.com. Sales took off immediately and our church goods sales regularly accounted for 25-30% of our overall sales. In spite of this, we saw church supplies as a nice bonus instead of as a key part of the business. We should have hired someone to handle parish accounts and grow that business as a full time position. Instead, our church goods sales leveled off instead of taking off.
Mistake #5: Taking my eye off the ball to work on a side project.
In 2007 I spent most of the year working on new features for the website, the primary one being a sell-it-yourself market that would tie in to our regular site the way Amazon Z-shops (now the Amazon marketplace) does. the project was about 90% complete when I hit technical know-how wall and couldn't finish the project. The feature never went live and a years worth of time that could have been spent fixing performance issues and bugs was lost.
Mistake #6: Not paying someone to fix some chronic technical issues with the website.
Our web site, fulfillment system and point-of-sale system were all written in house by me. This was a curse and a blessing. We could quickly add new features to the system and do things that no one else was doing - imprimatur information, military chaplain registries, real-time stock information - but it also meant that the system was only as good as my coding ability which on a scale of 1-10 probably never got above a 7. For an e-commerce site with thousands of daily visitors, a real coding pro was needed to take care of some of the bigger problems we had that regularly cost us because of wasted time.
Mistake #7: Accounting.
All I'm going to say here is that over a four year period, because of IRS penalties and various other accounting problems we lost about $160,000. Get a good accountant that you would trust with your life because you are basically trusting that person or firm with your business's life.
Mistake #8: Taking partnerships for granted.
A couple of years ago we lost the traffic from a large Catholic site that had been a reliable partner for many years. The site was bought by someone else who changed the layout and dropped the links to our site without contacting us. I hadn't been in regular contact with the site owners even though they sent us quite a bit of business and we sent them pretty good sized checks regularly. If I had, I would have know what was coming and possibly been able to make sure that that agreement stayed in place instead of just vanishing.
Mistake #9: Thinking that I could handle Google's constantly changing search engine requirements internally forever.
For the first seven years of our business Google loved us. We sat at the top of the search results for all kinds of great keywords. Sometimes we would show up ahead of publisher websites! Then in November of 2009 we saw our first drop in year-to-year traffic ever. Up until then our traffic had been growing at about 30% a year. In 2010 our traffic dropped again. At this point, we should have had red-alert signals going off and hired someone outside the company to figure out why this was happening. Instead, I decided that we could fix the problem internally. On February 24, 2011 Google launched a new search engine algorithm called "Panda" and our already diminished search traffic dropped 60% overnight. Unfortunately, we were already experiencing a cash crunch that started in 2008 when our best year turned out to be wasted on payroll so I didn't have the cash to go hire that SEO firm I should have hired a year and a half earlier.
We did a lot of internal cleanup on the website including getting rid of duplicate categories and eliminating about 1/3 of the categories on the site. In late October we saw our traffic jump back up to 2010 levels but we had lost a entire First Communion season and the beginning of the Christmas season.
In April of 2012 Google released another update called "Penguin" and our traffic crashed again. Google also informed us that we had unnatural links to our site so apart from the Penguin penalty we were being manually penalized. When Google says that a site has unnatural links it is because there is a pattern of links that look like they were created to "game" Google. In our entire history as a business we had only ever hired a link building company once. As soon as we saw the tactics they used, we had them take all the links down. After getting the notice from Google about our "unnatural" linking practices we did a hunt for any sites that looked suspicious that linked to us and created a spreadsheet. None of these sites were ones we ever had any dealings with. They were typically just huge lists of links to everything. We sent the spreadsheet to Google explaining this. Several weeks later we received a notice from Google that our penalty had been lifted and our traffic in August of 2012 shot back up 40% over 2011. We thought we may be on a path to recovery but in November our traffic started to fall again and by mid-December was back under our 2011 levels.
Moral of this long story: Google is no longer a place where amateurs can easily succeed. It also doesn't seem to be a place where doing things honestly is the answer. In searching for a company to assist us with our traffic problems I found plenty of places that used all sorts of schemes including creating fake people on-line to promote the business, links to the site from sketchy looking blogs but very few that I would consider grounded in honest practices. Most companies that offer search engine services charge between $2,000 and $5,000 a month which is a lot of money for a small business to sink into making Google like them.
So where are we?
Right now we are looking at several possible outcomes for the business. We are talking to possible investors. We are talking about selling the company and we are running a crowd funding campaign where YOU can help us save Aquinas and More. Will you make a pledge and become an Aquinas Angel?