Lessons Learned: Baking Site Says No to Shark Tank

A variety of the most successful online retailers sell products that solve problems.

Daniel Rensing, who grew up in Levittown, N.Y., created a intelligent product that attracted media attention within 10 days of its launch.

When the Rensings relocated to Rockledge, Fla. in 2003, Daniel began a diploma in computer graphic and design at Keiser University, in Melbourne, Fla..

He also bought a small vinyl plotter to create little stickers for classmates, the biggest vendors being car stickers based on customers‘ tattoos.

Rensing expanded his company to provide large format digital printing for local and national businesses. Eleven years later, he conducts DG Printing and Design.

In mid-2009, Rensing designed for his wife Stephanie, who is an accomplished baker, the Cheat Sheet Apron. It had cooking manuals — conversions and steps — printed upside-down on the apron for the cook to read easily. Friends clamored for one; Rensing decided to record the apron on Etsy.

Within 10 days, the editor of the Food Network Magazine, who had seen the apron on Etsy, called Rensing.

“We were featured among the top 10 must haves in the kitchen in the magazine’s 2009 vacation issue,” Rensing said.

Rensing began The Smart Baker on Etsy but quickly”outgrew its limited platform.” He set up a simple website, TheSmartBaker.com, in 2010 using RapidWeaver, a drag-and-drop internet platform, but found orders difficult to manage and his developer increasingly expensive as he charged per update, and for certain attributes. This prompted his switch, in 2012, to Bigcommerce, the hosted platform.

Fast forward to 2015, The Smart Baker has four main product lines: aprons, parchment paper, cupcake towers, and cake pop stands. Rensing sells them on his own website, along with Amazon, OpenSky.com, and Zulily. His Etsy shop still exists, but he’s renamed it AllCustomGifts.

Rensing’s company keeps growing, from gross earnings of $3,000 in 2009, $65,000 in 2010, and doubling to $140,000 in 2011. The appearance on investor-pitching TV show, Shark Tank, on March 2, 2012, motivated earnings to grow to $500,000 annually, and by 2014, The Smart Baker grossed just under $2 million.

Shopping Carts; Order Management

Rensing’s move in Feb. 2012 to Bigcommerce was motivated by his desire for a new shopping cart platform that will enable him include new products, have real time shipping quotes and order confirmation emails, and provide coupons and special offers.

“Bigcommerce had these, and excellent testimonials from their customers and ecommerce comparison sites,” Rensing said.

Rensing pays $24.95 per month to the initial standard plan (currently renamed Silver); new customers pay $29.95 per month.

“We can make edits, process refunds, include notes for customers or for workers, enter tracking information and much more to take care of the particulars of any arrangement,” Rensing said.

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Web Design

Rensing undertook his own web design, and learned Cascading Style Sheets code to design his site with Bigcommerce.

“Just like a brick-and-mortar store, we would love to lure people’through the doors’,” Rensing said.

“We provide them with a clean and easy way to browse our store and keep them browsing our’shelves’ so that they leave through the checkout counter

TheSmartBaker.com

Credit Card Payments

Rensing believes the best credit card payment processing offers competitive prices and provides additional value to the merchant and the customer.

After he moved to Bigcommerce, Rensing transferred all credit card processing to PayPal, in March 2013.

“PayPal reduced our processing costs — our new rate is 2.2 percent with no monthly fees — and our customers feel confident to enter their payment information,” said Rensing.

“PayPal has an easy-to-use backend system, easily integrates with Bigcommerce, and has a fantastic customer support system.”

Hosting

The Smart Baker was hosted on GoDaddy before changing to Bigcommerce.

Then came his appearance on Shark Tank. Worried that Bigcommerce’s servers could fail to take care of a massive traffic spike or process the orders, Rensing contacted Bigcommerce and gave its own technical support team about two days’ notice before the series aired.

Happily, The Smart Baker site remained live, conducted easily, processed orders flawlessly, allowing the Rensings to capitalize on that TV exposure.

Employees

Rensing now has two part-time employees using step-by-step procedures for the company’s various processes.

“These [procedures] let me train any employees,” Rensing said.

In 2010, he hired a part-time employee to handle order fulfillment, so Rensing could concentrate on running the company.

“Now that we have an office and warehouse at Rockledge [Florida], both part-timers operate our laser machines, and palletize orders,” Rensing said.

Search Engine Optimization

Rensing believes pay-per-click advertising has become less effective as the ecommerce industry grows.

“We have climbed from about $8,000 per month to $2,000 per month and receive an average of $1.65 return for every dollar,” Rensing said.

He pays a freelance SEO consultant (from oDesk) $500 per month to create and distribute content, and implement on-site keywords.

“Our search engine optimization efforts are to keep our site content clean, use our site, and write our social media pages, which drive sales,” Rensing said.

Shipping

Most order fulfillment is completed in house, but for the inventory sent to Amazon because of its Fulfillment by Amazon service, for products which the Rensings sell on Amazon’s marketplace.

“We package and ship our retail and wholesale orders from our warehouse, which helps us manage our costs and provides the quickest turnaround,” Rensing said.

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Product Sourcing

Originally Rensing made every thing himself. He has many different pieces of equipment at his Florida warehouse to accomplish this, like a CNC machine (for cutting edge products), laser engraver, wide format digital printer, vinyl plotter, heat press, and die cut machine.

But he started urinating production in 2009, before the Food Network Magazine feature.

“Ahead of the Food Network Magazine feature, we place our first apron [outsourced] purchase for $7,500. We spend $50,000 to $80,000 on stock every quarter to meet demand,” Rensing said.

Nearly all The Smart Baker’s 88 goods are made overseas, but the custom cupcake stands and parchment papers, and other personalized products are fabricated in house.

Rensing wanted to get products manufactured locally but as most companies send production overseas, he sourced a factory in Ningbo, China through manufacturer directory Global Resources.

“We flew out to meet up with the production supervisors and workers who would make our products. Since I made everything, it was quite straightforward to describe what we had and how to make it,” Rensing said.

Rensing uses Skype and email to stay in touch with his factory manager about the production process.

Inventory Management

Like most every merchant, he’s experienced too much thing, and insufficient.

“We still do physical counts to confirm inventory, and record these numbers within our Bigcommerce backend. Once our inventory thresholds are satisfied, we add those products to our production lineup,” Rensing said.

Accounting Software

Rensing outsources his QuickBooks accounting to an accountant.

While Rensing understands QuickBooks can integrate with Bigcommerce’s backend,”by using a professional, I know it’s done right and in the fraction of the time.”

Social Media

Rensing believes it is becoming more and more challenging to optimize social networking platforms.

“Facebook, Twitter, and Pinterest are increasingly less effective. We see fewer beliefs, likes, and shares — and less involvement with our fans,” Rensing said.

He currently concentrates on Instagram, FoodGawker.com (a Pinterest-like site ), together with other food and recipe-sharing sites and blogs, that have contributed to some requests.

Expense Control

“If what we spend money on isn’t essential or does not provide a return on investment, I cut it,” Rensing said.

“I also don’t accept the first price for anything. This helps to keep our costs in check.”

Customer Support

Rensing is devoted to getting 100 percent satisfied customers.

“If someone is unhappy, it affects me personally; I literally take customer service to heart,” Rensing said.

For example, in December 2014, The Smart Baker had closed for Christmas. Rensing acquired an urgent Facebook message from a local bakery seeking two collections of cupcake towers for a holiday wedding because the bakery’s rental collections hadn’t been returned.

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“Although we was closed and I was in a different country, within 20 minutes my parents had two cupcake towers ready for the bakery to pick up,” Rensing said.

“The bride and groom won’t ever know how they got their perfect wedding cupcake display.”

Biggest Mistakes

Concerning mistakes, Rensing cites handing over responsibility of The Smart Baker’s advertising and marketing — everything from product photography and media kits to product launches — to another corporation.

“We spent almost $30,000 in a month or two, but they missed deadlines and had poor attention of detail; we’d been unable to complete many projects. It was a poor return on investment,” Rensing said.

To save money, he cut his AdWords spending and other online campaigns.

Furthermore, Rensing regretted being too quick to say”yes” instead of fully consider the consequences when he wasn’t entirely retail-ready when Jo-Ann Fabric and Craft Stores approached The Smart Baker to stock its products. Not having retail openness caused Rensing tremendous stress with the short lead times and sudden additional costs. He had to spend three to five times the price of habitual sea freight — switching to air freight — for his first purchase order stock, to be sure the product was on Jo-Ann Fabric’s shelves in time.

Largest Successes

Rensing believes calculated risks might lead to better outcomes and even bigger rewards.

About Shark Tank, Barbara Corcoran, a panelist-investor on the show, given Rensing $75,000 for a 40 percent share of The Smart Baker, with a 5 percent royalty till her investment was paid back.

Rensing chose not to take the deal since Corcoran wanted him to execute large-scale distribution with Walmart, which he believed would dilute his product and quality.

“However, Jo-Ann Fabrics supported us. They took the opportunity to explain how they work, were quick to communicate and they have been clear with their aims with our products.,” Rensing said.

“We have about 500 [Jo-Ann] stores with our products and are happy to see where we will expand to next.”

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