Posted: Wed 11th Oct 2017
Karen Riddick set up her Fair Trade business, Second Nature, after visitors to her bed and breakfast were impressed by the property's furnishings.
Despite being set up in a very rural location, using Amazon has helped Karen sell her products well beyond the shores of the Isle of Islay where the business was born.
How did you come up with the idea for Second Nature and turn that idea into a business?
Second Nature originally started as an off-shoot to the bed and breakfast I had on the Isle of Islay, off the west coast of Scotland.
I have always been a big believer in eco-friendly and Fair Trade products so, when first setting up the accommodation, I selected most of the furnishings on this basis.
Guests often commented on how nice the rooms were so I kept a few spare furnishings for sale. I also started selling surplus items on auction websites.
Over time, this retail side of the business grew and began to produce a regular income. I entered into an agreement with a supplier and began to bring in regular stock deliveries for onward retail.
What start-up challenges did you face and how did you overcome them?
As a developing e-commerce business, we faced some specific challenges relating to our island location.
It was expensive for us to receive stock onto Islay and the weather meant that stock was best kept inside the house.
Poor phone reception and patchy internet also caused problems and occasionally resulted in delay to our service.
More importantly, there was a complete absence of courier services with whom to send out our orders.
All of our products had to be sent by post which was expensive. We were also unable to offer any express postage options and this reduced our competitiveness.
We addressed this by being 'excellent' in all other aspects of our operation. We offered a direct, personal service to customers and dealt with everyone directly and separately.
We tried to manage expectation by giving upfront information about our location. Hence, buyers were aware of the slower service before they made a purchase.
It is likely that we lost a few sales and took reduced profit margins but we made sure that the business was still viable.
The main challenges were the ones that we all face; having enough capital to get things off the ground plus learning the trade!
Although I knew a lot about my products, I was not an expert in computer based operations, internet matters or e-commerce.
I had to develop these skills alongside other aspects of being self-employed e.g. accounting, awareness of relevant legislation, marketing and presentation.
This was easier than I expected and I found plenty of support from online forums and local business groups. I also got some practice by selling at fairs and house parties.
In terms of working capital, I am firmly of the view that having a second job alongside your fledgling business is a great way to fund those early days!
In addition to the bed and breakfast I also had a separate full-time job but I still managed to grow my e-commerce site. Once it was fully up to speed, I was able to give up my other employment.
How have you managed your business as it has grown?
The business has grown steadily over the last seven years. During that time we have moved back to Dumfries to be closer to family.
Moving location gave us the opportunity to think about what we needed in order to develop the business. Although we moved to another rural location, being back on the mainland gave us access to contract courier services and to external storage rental.
From there, we expanded onto multiple selling platforms, opened a shop premises, employed two staff and rented large storage units.
Our new storage enabled us to start buying stock in bulk and it encouraged us to travel overseas and import our own products. All of this resulted in in creased sales.
We first started using Amazon because we wanted the credibility that comes with being on Amazon Marketplace.
Unlike others, Amazon requires a more professional approach and it attracts buyers who expect a great experience. We liked the idea of having a structured selling format and a customer focused approach.
Our expansion onto Amazon and other selling platforms resulted in a steady increase in orders. Eventually it was more than we could handle ourselves.
We began to use Fulfillment by Amazon as a means of securing additional storage and to access their pick and pack service. This was a milestone in our business; the ability to grow sales without needing to rent extra space or employ extra staff.
The principles and the success of FBA encouraged us to find a third-party fulfillment centre to handle the remainder of our stock and orders. This has freed up our time to concentrate on other aspects of the business and to spend time with family.
Today, we have no premises and we work from home. We have more free time even though the company is busier than ever.
We are excited about using Amazon to develop a wholesale aspect to our business and to expand further into Europe and the USA.
What are your tips for making the most of selling products on Amazon and maximising sales?
Aim to give your buyers good value products and great customer service. Product reviews and seller feedback can make or break your business so treat every order like it counts!
Use the Amazon promotion tools if you want to give your products a boost.
Familiarise yourself with Amazon selling policies and stick to them.
Don't sweat it over the small stuff. Amazon is customer focused and there may be times when you, as the seller, lose out on a problem sale.
Be prepared to let things go; your time will usually be better spent concentrating on your next sales.
What are your three top tips for other entrepreneurs building a business in a rural location?
Make sure you have the money and motivation in order to get going. Get a head start by linking your rural venture to an existing business, skill or interest.
Keep on or take on a second job. It provides you with routine, a secure income and a 'work head' while you are moving forward.
Do not regard your location as a disadvantage; often it isn't. A rural location can be an asset. Some costs may be higher but many costs will be lower.
Think about what you want. Consider the lifestyle that your business needs to fit with. Thinking ahead will make sure that you get the balance right and that you know which activities to get help with and which to do yourself.
Which other entrepreneurs inspire you and why?
Wayne Hemingway, founder of Red or Dead. I saw him speak at an event and I loved the 'do or die' way he started his business.
Selling your old clothes to pay the rent is a classic example of necessity being the mother of invention. A reminder that we can all find a starting point.
Josh Littlejohn, founder of Social Bite. A chain of sandwich shops which aims to employ former homeless people and get them into permanent accommodation. A great example of progress being about more than just profits.
Why do you think people should come to the Rural Entrepreneur show?
These days, you don't have to move to 'the city' in order to find fulfilling employment.
Our rural areas can be a great a base for diverse businesses and nobody should be put off starting up just because they live out of town.
The Rural Entrepreneur show is the perfect place to develop your ideas. Who knows where it might lead!
Register for free tickets to the Rural Entrepreneur Show here and make sure you visit the Amazon Academy for practical advice on using e-commerce to enhance your customer experience, boost revenue, improve productivity and increase exports.