Young entrepreneur John Hanington launched his surfwear company Walnut Waves 18 months ago, on the verge of an economic slowdown. ‘It was a big risk,’ he admits, ‘but it felt like the perfect time to start my own business. Having recently graduated, finding a job with an assured future was unlikely. This way, I would be in control of my own future.’

Fast forward to 2009 and the company is thriving, both the shop in Devon, and the website, which has become the main focus. ‘We don’t feel the need for any more shops, but we’re expanding the website a lot,’ he says. ‘Some 80-90% of our sales are mail order.’

Effective use of time
Like many owners of small businesses that grow very quickly, John found he was spending a huge amount of time on routine tasks, such as posting orders out, and not enough time focusing on strategy and management. ‘It wasn’t so much delivering packages to the Post Office that was the problem but keeping track of all the receipts and paperwork that went with it. Also, we had to hand money over every day, and wait at the counter while someone put all the packages through the till. This could be 30 packages a week or so in winter, and 100-plus in the summer. As you can imagine, I wasn’t popular with those behind me in the queue!’

John visited the Royal Mail website section aimed at small and medium sized businesses and, after completing a short questionnaire about his business, created a tailored growth pack online. This free service provides personalised advice, as well as product and service recommendations. Among the recommendations he received was to move to Royal Mail’s Packetpost™ service.

Now that John distributes his orders using Packetpost^™, the process has become streamlined, with all administration done online. ‘The online order and billing service is a big plus,’ he says. ‘I enter all the weights on the website, then an order is created and a packing slip printed off. I place the packets in a mail sack with the packing slip and seal it with a cable tie. Then all I have to do is hand the sack over to our local sorting office.’

Massive cost savings
Convenience isn’t the only benefit. ‘The biggest advantage of moving to Packetpost^™ has to be the cost savings, which are considerable. Cost was a big problem for us before, as we had to cap our postage charge at £6 in order to remain competitive. This meant we were making a loss on the postage of around 25% of our orders, especially on heavier items'.

‘When we were sending a 2kg parcel over the counter, it would cost around £6.40 to post,’ explains John. ‘Now, with the discounted rates, it costs us £2.38 – our costs have been slashed dramatically. In fact, postage costs have come down so much we’ve started shipping to Europe, and to introduce free postage for UK orders of over £30. Previously customers had to spend £100 for free delivery, and we’ve noticed a big increase in orders since dropping the minimum spend.

‘People are much more aware of postage costs these days, and this has enabled us to stand out from our competitors, many of whom require a £75 minimum spend for free delivery. All this increased business, from the UK and Europe, means that in just the past few months our turnover has doubled against the same period last year.’

Most customers are happy with standard First Class delivery, but because these are holiday oriented products, John has found some demand for Special Delivery™ Next Day. ‘If people have left the purchase until the last minute, they’re happy to pay extra to guarantee delivery before they get on that plane.

‘The most important part of our business is to deliver goods within a defined time scale,’ says John. It’s therefore vital that we have a reliable and cost effective delivery network. Since we opened the Royal Mail Packetpost^™ account, our orders have been delivered very quickly and at massively reduced costs. Customers regularly send excellent feedback and are generally very pleased with our quick delivery.’

For starting an Internet Business

1. Find your target market
   Either aim for a niche that doesn’t already have a market leader, or become the recognised specialist in your niche.
2. Sort your financing
   A loan or overdraft is usually cheaper than selling shares or equity in your business. Or try the Small Firms Loan Guarantee.
3. Spread the word
   Sites such as Google AdWords can be a cost effective way of advertising. Also, you may want to invest in help with SEO (search engine optimisation), to catch potential customers searching on Yahoo or Google.
4. Make it easy to buy
   Create a site that’s easy to navigate, with a fast and easy sales process, and fulfil every order as fast as you can. Security should be a priority.
5. Be realistic
   Don’t give up your day job too soon – it will take time for your internet venture to grow.

• For ideas on how to find new customers, keep delighting existing ones and save time and money, create a tailored growth pack for your business at www.royalmail.com/growth 
• Within the UK, Royal Mail Packetsort™ is a cost effective way to ship mailings under 2kg. Again, you can earn increased discounts by pre-sorting your mail before handing it over to Royal Mail
• Enjoy guaranteed delivery before 1pm or your money back with Special Delivery™ Next Day
• www.walnutwaves.co.uk