When Mala Salakas took to kids’ parties as Patches the Clown in the 80s, little did she know that she was planting the seeds for what would be one of Australia’s biggest retail party supply outlets and one of the country’s most visited online party supply stores.
Mala’s passion for kids’ parties resulted in partnering with her father to open a small party shop in Sans Souci, NSW. It was 1985. The Party People was born.
What was essentially a simple little party store, The Party People made its first steps towards something bigger when Mala decided to sell party products online – in 1998. It become Australia’s first online party store, a business move that would see Mala’s children carry on the business and serve over 1.7 million online visitors a year.
Dean Salakas, one of Mala’s sons, tells Dynamic Business that co-running the family business with his brother was not always the plan.
“My brother Peter and I went to University and perused other careers. We were passionate about the business but we both decided that we wanted to do more than just work in a small party shop. My brother was an exercise physiologist and was offered a franchise opportunity in 2007, while I was offered an executive role at Woolworths during my time as a business analyst there,” Dean says.
“After nearly 25 years of hard work my mum and grandfather decided they wanted to retire and sell the family business. A buyer was lined up, so my brother and I discussed the buyer offer one Friday afternoon, asking ourselves the question, “Could we make this into something big?” We decided that night that we would buy the family business for the buyer’s offer.”
In Dean’s final year of university, he wrote up a thesis focusing on his family’s business. He analysed the business model and made recommendations on how best to capitalize on the growing online market. These pointers would end up becoming a part of the business’ next maneuvers. Before these new strategies were even locked in, The Party People was starting to see the benefits.
“We returned a profit before the project was over, selling advertising to related businesses such as entertainers, jumping castles, etc,” Dean says.
“The first of the two major recommendations I implemented was a national delivery model to replace the existing one. At the time we were charging a flat rate of $60 to W.A. and I changed this so we charged the customer based on the weight of the order. The second, and by far the biggest recommendation I implemented, was Google AdWords. At the time, Google AdWords was just about to launch; Google tells me I was one of their first AdWords customers in Australia.”
The bricks and mortar store continued to run while the business’ online community expanded. The demand was growing, fast. Changing the shipping cost to a flat rate of $9.95 doubled order volumes almost overnight. To cope, Dean and Peter decided to buy the next-door neighbour’s fridge business in order to use his space. It wasn’t enough. Growing at 200 per cent for some time, the brothers also took over the lease of the next tenant’s basement to use as storage space.
“We got to a point where we had 30 employees working in a very small space. We were never concerned with sales, there were always too many to cope with, our biggest issue was capacity. When we had enough staff, we didn’t have enough computers, when we had enough computers, we didn’t have enough space, and so it was a battle to stay on top of the growth. Nevertheless, through that period the store kept running.”
Dean believes that it was “staying ahead of the game” that has continued to drive business success. The Party People was offering in-store pickups before “click and collect” options became a common find and an evolvement of shipping options has always been a priority.
“We continually added more shipping options for customers. For example, we offered ‘express online’ while our competitors were just starting out online offering old shipping methods. I distinctly remember seeing a competitor directly copy and paste our entire shipping page. We didn’t complain because we had moved to a different shipping model and they were still using our old one. The main theme here is that we continually innovated, tested and implemented new strategies as we grew.”
As anyone involved in a family business would know, it is not always smooth sailing. Dean says the biggest issue with taking over the business is the struggle for other family members to let go.
“We would get complaints about our decisions – and we still do to this day, but what’s important is that they respect that the business is ours and we get to make the decisions and, if need be, learn from our own mistakes.”
Dean points out that regardless of the difficulties that can arise with running a family business, there’s nothing like the help of those closest to you.
“We went through some very difficult stages and if it wasn’t for family and friends, we would have crumbled under the work load.”
When asked if retail businesses not online should consider changing their stance, Dean’s answer is clear: “It’s essential.”
“Today, if someone wants to see if they should shop with you they will look you up online and not in the Yellow Pages like in the past. Adding online retail is not much of a stretch. You should be showing your online customers your catalogue, so why not let them buy from it? You don’t have to lead the market, but you can do it profitably and make money from it,” Dean says.
“Many of the big players continually report great market share but no profits. To me, these businesses that have the best websites but make no money are not good businesses. The mum and dad business that is online, making a profit that is good for them and providing for their family, to me, that’s a good business.”