Canada: Zelcovia Cookies: How Technology Is Taking A Cookie Business To The Next Level

Alan Zelcovitch knows cookies. In fact, his chocolate chip cookie recipe led to the creation of Zelcovia Cookies, a boutique cookie business that started as a means to help fund flying lessons and now 10 years later is a growing ecommerce site that sells cookiegrams, cookie cakes, cookie baskets, boutiques and gift boxes direct to corporations and individual consumers.

During this same period, Zelcovitch has also been building up an IT consulting business, providing technical support to small businesses. His appreciation for the power of technology to work smarter has helped him enhance efficiency and drive profitability for Zelcovia Cookies. Here he shares how investing in technology and equipment has taken Zelcovia to the next level.

Fuller Landau: Describe your business model for Zelcovia.
Alan Zelcovitch: Zelcovia is an internet based cookie delivery company. Google the terms cookie delivery or cookie grams and we're one of the top listings. We keep overhead very low and have a gross profit margin of 50%.

Fuller Landau: When did revenues begin to take off?
Alan Zelcovitch: When I started spending money on technology. I was just treading water until then. In the first iteration of the website, which cost about $2,500, we could only take orders over the phone. I've since spent about $50,000 on site improvements based on customer feedback. We keep making it easier for the customers to get exactly what they want. Now, the vast majority of orders are placed online, customers can upload their own photos to personalize orders, request delivery times seven days a week at times convenient for their schedules. I work with my programmer to continue to make the site as efficient as possible. For example, if I ship to Winnipeg, the site knows what to charge based on postal code. As soon as someone places an order online, the courier automatically knows. Investing in technology has cut my workload in half and has allowed me to more fully develop the business. That's why I have no problem investing in technology. In fact, last year was our best year in terms of sales  thanks to the new technology.

Fuller Landau: Does your willingness to invest in the business extend to equipment?
Alan Zelcovitch: Yes. When I started 10 years ago to save money I was using ovens that were given to me  but I was missing out on opportunity. For example, those ovens baked about 24 cookies an hour. Today, our ovens bake between 500 and 1,000 cookies an hour or up to 40,000 cookies a day. A small investment in infrastructure goes a long way.

Fuller Landau: What is the biggest lesson you've learned about e-commerce since starting your site?
Alan Zelcovitch: When it comes to the Web, don't delete, just add. I learned this lesson when I changed the categories on my site in order to link them to events (birthdays, weddings, etc). There were no orders for a week. We immediately went back to the original categories and the sales returned. I'm using that lesson now as we prepare to introduce a build your own section with several new flavors. When I introduce it, the original options will remain and I will only delete them if it becomes apparent that the vast majority of customers are choosing the build your own category.

Fuller Landau: What is your key differentiator?
Alan Zelcovitch:  We have  really good product and we pay attention to the details. We put customers' logos on the cards that accompany the cookies. We can deliver an order within 4.5 hours of it being placed. We offer the ability to personalize orders. Our competitors cannot top what we offer because no one else has invested in technology to the extent we have. As a result, we have spent no money on marketing. It's all word of mouth and repeat customers.

Fuller Landau: Where do you go from here?
Alan Zelcovitch: We have two interesting projects in the works: my web developer and I are working on a cloud solution where we can sell the e-commerce system we've created as a service for $150 a month. We will host it and other businesses can in effect lease all the power of my $50,000 website. I'm also looking to create relationships with bakeries across Canada. They will gain access to our site so we can sell our cookies in every major city.  We will feed them the orders, ship the dough in powdered mixes and they will bake and sell them.

Stay tuned.

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