In the first of the Driving Business Online case study series, Ballina-based online hardware store Hardware2U reveals how an excess of stock at Christmas led to it becoming an online business.
As the saying goes, necessity is the mother of invention, an expression that is certainly true for Scott Asbey-Palmer, founder of Ballina-based online Hardware store Hardware2u.
Asbey-Palmer had ordered plenty of stock for his bricks and mortar hardware store in December 2005, expecting a bumper Christmas trading season. But instead of the usual Christmas rush, sales were flat.
Faced with too much stock and bills to pay in January, he struck on the idea of selling the stock on eBay, and became one of the first online stores to start selling hardware on the site.
“The business has grown from there,” Asbey-Palmer said, who closed his bricks and mortar store in 2008 to focus solely on the online store.
Challenges
Asbey-Palmer says the biggest challenge is increased competition in the market.
“When we started, online shopping was in its infancy. We were one of the first to sell garden sheds.”
To stay ahead of the market, he’s constantly diversifying into new product lines and has started developing and engineering his own products.
“You have to evolve quickly or you’ll be left behind,” Asbey-Palmer advises.
Achievements
According to Asbey-Palmer, one of his major achievements has been slashing his overheads as a result of moving the business online.
“We used to pay $120,000 in rent each year, now we pay around $24,000.”
The business sells Australia-wide: “there’s nowhere we haven’t shipped product,” he said, adding that Hardware2u has completed over 20,000 transactions since it opened.
Asbey-Palmer has also shipped orders to Fiji, New Caledonia, Vanuatu and New Zealand, as well as the US, although he focuses on the Australian market because sending bulky items like garden sheds overseas isn’t cost-effective.
Web site, payment processing and marketing
Hardware2u is built on the Joomla system and has used PayPal since it started trading on ebay. Now the business uses PayPal for all its eBay and website sales as well as a variety of other payment processing methods.
“PayPal is simple to use and inspires confidence with our customers. This has opened up a lot of doors for us; and pure website sales now account for about 30 per cent of the business,” Asbey-Palmer said.
Looking to the future, Asbey-Palmer said Hardware2u specialises in a range of products including garden sheds, garages, patio covers and shade sails, with the business to focus “on growing that market online and continuing to develop new ideas, as well developing new kits systems like decks and we’ll continue to engineer our own products to differentiate the business.”
– This case study was produced to support the Driving Business Online program, an initiative developed by PayPal Australia in partnership with Australia Post, Optus, Symantec, MYOB, eBay, Powerfront and The Australian Retailers Association. Driving Business Online has been developed to help small businesses throughout Australia achieve greater success online. The Driving Business Online program consists of an educational roadshow educating businesses across rural and regional New South Wales in addition to the Driving Business Online website.
