Counselor

Achieving E-Commerce Success

Patience and investment spur growth.

Dave Sarro saw the sea change coming. Just as importantly, he acted in time to benefit from it. Back in 2008, his firm – Promo Direct (asi/300477) – transitioned from a direct mail company to a strictly online seller of ad specialties. Today, the Nevada-based distributor is recognized as one of the industry’s e-commerce leaders, recently named by site TopTenReviews as the best promotional products online store.

“We give customers full product range selection, descriptions, comparison, production times and all the necessary info buyers are looking for,”says Sarro, Promo Direct’s CEO. “In a matter of five minutes a buyer can make an educated decision and place an order from start to finish.”

While Promo Direct has found success, the company’s move to the Web took planning, time and great investment. Things turned out well for Sarro, but could you make a similar jump? Keep reading for Sarro’s advice.

Q: What challenges did you face by moving to the Web?

A: The major challenge was finding the right technology partners to help build a proprietary software environment. Another challenge was accepting it would take us three years to build the technology. Plus, there was the cost of over $1 million. Since we went to market, we’ve spent another seven years expanding our capabilities, and to date, our technology investment is well over $2 million.

Q: Why does Promo Direct receive high marks as an online store?

A: Our high rating is due to many factors: selection, our 110% low-price guarantee, 100% satisfaction guarantee, free artwork, free email proofs, free samples and our high level of customer service. Our website is user-friendly and our live chat and free 24-hour service on over 1,000 products is rated high.

Q: What types of technology have you invested in?

A: Promo Direct has built its own technology platform, so we own it. Our proprietary software platform is Web-based with a fully integrated front-end and back-end. Our front-end is our website and our back-end consists of sales, marketing, customer support, accounting, purchasing and the other areas of our business. Our technology runs on an Oracle database and is written in java script.

Q: How much do you invest in SEO marketing and Web ads?

A: The majority of our online financial investment is in PPC, but we do invest heavily in SEO, SEM and social media. We have an Internet marketing team of 10 people that handle all areas of our online marketing and we’re looking to add additional staff in the next few months. The key has been to hire people with a proven track record of success and for me to work closely with them.

Q: Do you source any differently being an online company?

A: I’d say we don’t source or warehouse any differently than most of the big distributors. However, we most likely work with fewer suppliers. Our suppliers are the backbone of our company so we work in a strategic manner with them. Our goal is to drive higher sales volume to them and in return we receive better pricing, marketing/ inside sales support  and rebates.

Q: What types of products are your best sellers?

A: Our biggest product categories are apparel, drinkware, bags, health and personal care items, technology and writing instruments.

Q: What trends do you see in end-user buying?

A: Clearly, there has been a big shift the past five years with the sales growth of online companies. This is due to the way end-users are electing to buy promotional products, and I see the online sales growth continuing for a very long time. Much of society is moving to mobile technology, so there will be a dramatic shift the next 10 years to mobile purchasing. I can tell you that our mobile platform is exploding right now.

Q: What advice do you have for other companies considering a shift to e-commerce?

A: My biggest advice is to do strict due diligence. There’s a big difference between having a website and being an e-commerce company. Find the right technology partners and be well capitalized financially to make the necessary technology and staffing investments. Also, don’t underestimate how long it will take to become profitable – three to five years is the number today.