Power Up Case Profile: Balancing Service and Product with Eljo

Having an idea for an online retail business is important, but having plenty of experience in the game already is even more helpful, as Co-Founders of appliances and daily deals site Eljo.com.au, Elliot Ramler and Jonathon Green found out.

Green admits to being “mildly” addicted to the internet since he was in his mid-teens. Being brought up in a family of business people, it was only natural that he developed a keen interest in online businesses. He decided to dabble in selling fashion accessories on eBay at age 18, before approaching his good friend (Ramler) with an idea for a full-featured offering at the age of 23.

“Elliot and I both quit our jobs in early 2009 to focus on the business while also completing our degrees,” says Green. “By June 2009 we had finished university, had a business up and running and the rest is history, really.”

Prior to founding Eljo.com.au, Ramler held a job as Commercial Sales Manager for online furniture retailer Milan Direct, which saw him working directly with arguably two of Australia’s best, young online entrepreneurs, Dean Ramler and Ruslan Kogan.

Green, on the other hand, worked part-time at online marketing firm Exa in Melbourne while he was still at Monash University completing a Marketing degree.

Service Meets Product at Eljo.com.au

Like many online businesses, Eljo.com.au has a large focus on being streamlined. This ethos means that Ramler and Green try as hard as they can to improve efficiency and reduce costs wherever possible, therefore keeping their product prices as attractive as possible for the online consumer.

“Perhaps slightly different to a lot of online outfits however, we don’t reduce costs to the detriment of our customers’ experience,” Green says. “Things like service and shipping insurance still remain very much a part of our offering. This allows us to offer an ultra-competitive price on everything we sell, while also backing it up with the levels of service that our customers deserve.”

In this sense, Ramler and Green approach online retail as a hybrid between a service- and a product-based industry.

“On the one hand, customers are seeking a particular product at a competitive price,” Green says. “They do this online because they seek convenience. However, this part of the equation is defeated if a business can’t be contacted, or if phone calls get diverted to message banks or overseas call centres.”

For this reason, Eljo.com.au employs a specialist customer service team that is required to be knowledgable in many facets of the company’s business, allowing customers to get their questions answered quickly and easily.

“Many of our competitors hide behind email address, ‘knowledge bases’ and contact forms,” Green says. “Also, a lot of the internet retailers out there seem to think e-consumers desire a well-priced product to the detriment of quality – thus they offer mainly cheap, unbranded alternatives. We like to stock only well-recognised, well-trusted brands in our store.”

Trials and Tribulations

One of the toughest challenges any business venture faces in its early days is securing the adequate funds and resources necessary to breathe life into the concept. In the case of Eljo.com.au, both Ramler and Green had already invested their own personal savings into the project before it had even got off the ground.

“The pot didn’t run deep enough to go on buying trips overseas and the like,” Green says. “We had to rely on various web-based sourcing mechanisms to get samples of the products we intended to import. Then we had to bluff our way to securing regional sole distribution rights for those products without any track record of sales history.”

However, Green highlights the fact that money isn’t the only limiting factor when it comes to getting a business online. What many people don’t consider, or take nearly seriously enough, is the amount of time it takes to successfully execute a business strategy.

“We were both juggling university, part-time jobs, an active social life (which comes with being in your early twenties), as well as our new business. In all honesty, the studying aspects probably suffered because of this, but we managed to finish our degrees and we have the pieces of paper to prove it.”

Having pushed through these challenges, Green and Ramler are finding their online store continues to command the bulk of their attention on a day-to-day basis. However, that isn’t to say there aren’t more challenges to face on the horizon.

Green is keenly aware of the effect that the global machine is having on local retail, and he is wary of the pressures that will become more and more evident in the industry, even in local online retail.

“A lot of people would flag the imminent move of major internationals like Amazon into our market,” Green points out. “While that would certainly shake things up, I think an equal concern is the increasing savviness of Asia. It won’t be very long before companies in Asia begin setting up Australian e-commerce outfits. Their capacity to ship in volume means it is often just as cheap for them to deliver something from Guangzhou to Sydney as it is for us to ship from Melbourne to Sydney.”

As globalisation and the internet are transforming society’s ideas of boundaries and borders, so to will the online retail landscape continue to change in the coming years. What is already a competitive and sometimes harsh market will only continue to become the battleground for retail competition.

On the other hand, not all issues arise from outside the business, and as Green points out, they will sometimes even appear from within.

“I’m fairly sure I have a mild case of undiagnosed ADD, or entrepreneur syndrome, as some like to call it. This means I can get extremely distracted by opportunities of all shapes and sizes,” Green says. “The challenge for me is ensuring Eljo.com.au keeps its eye on the prize, remaining focused on our core strengths while constantly seeking improvement in these areas.”

According to Eljo.com.au’s recently published trading figures of the last financial year, the company recorded 200 percent year-on-year growth, to a total of $2,800,000. Green is pleased to say that this growth trend has continued thus far in the current financial year.

Seeking more information on how to get an online retail venture off to a flying start? See our complete A-Z guide, Power Up: The Online Retail Entrepreneur’s Guide.

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