CASE STUDY: Manicmodels.com

Manicmodels.com offers a wide range of model cars, bikes, planes, trains and buses to collectors and enthusiasts throughout the world. The site went live in March and is the brainchild of commercial director Chris Bartram and technical director Richard Murton, who have so far set up and run the site while still in full-time employment elsewhere.

Against expectations, the site is not an extension of the founders' hobbies. The two considered carefully what would make a good web business before hitting on the idea of models. "We decided [using] a number of criteria," said Bartram. "One was that it needed to be easy to ship; we didn't want to get involved in [products] such as foodstuffs, for obvious reasons such as insurance and health and safety."

"It had to be visual so that you could show simple photos of it on the web. People could see what it was and didn't have to hold it. We wanted something along the lines of books but not books because that market was already flooded," he added.

They found collectible models to be a conservative and traditional industry and, most importantly, one that had no web presence in the UK.

The pair each invested £1000 to start things off and decided that Murton would set up the website himself. "We had to look at the most cost-effective solution which was a software package to allow you to set up your own shop. We went for a package called Actinic Catalogue because it seemed to offer everything we needed. On speaking to them, [they] seemed to offer the best support," said Bartram.

Supply for demand
The next stage was persuading suppliers to work with the company. "Because it was a conservative industry it took a while to convince them. [But] once we had done a few phone calls and visits, they said they were willing to back us."

Bartram said that two or three suppliers are still unwilling to work with the company, preferring their established supply chain instead. "We tried to tell them that we are supplying to people who cannot get to the shops. We have had orders from Singapore and South America. People used the same arguments before [with] Amazon. They said nobody would want to buy books like that because they would want to flick though first, but that has been proved wrong. WH Smith, Barnes and Noble - they all have their own websites," said Bartram.

Manicmodels chose US company Rapidsite to host the website from a shortlist of three or four. "We felt these guys gave us the best support. We could have felt high and dry without that backup. They have been very good and have pointed us in the right direction for things like web names," said Bartram.

"We used a graphics designer that I had used at my last company for the front two pages on the site. We wanted some jazzy graphics as the site loads up so he put those together," he added.

The Actinic package did the rest right through to the shopping trolley, said Bartram. "We set up a database, which you can do on an Excel sheet, which sits behind the interface. Images are linked on the Excel sheet, [and] if you click on the images, it asks you if you want to buy and takes you through the whole process. All we had to do was fill in the boxes. There is a lot of clever stuff it can do, but the basics were very easy."

The site went live in March of this year. The founders had planned for a January launch but some debugging needed to be done. "We had been concentrating on getting it right before we went live," said Bartram. "We had it running in beta mode where we had a number of friends entering orders to see if there were any problems with the system."

The intention from the start was that it would become a global business. Bartram had experience of global ecommerce from his previous job, but there were still unpleasant lessons to learn. "[In] certain areas of the world you have to be more careful of credit card fraud, which we have had a few instances of [in] Indonesia. Security is always an issue," said Bartram.

The company has now put systems in place to verify orders over a certain amount of money using the Worldpay service which checks the delivery address with the cardholder's registered address.

Delivery is up to 14 days, though usually much quicker. "People get much better prices from us than they would on the high street; the downside is they have to wait for the product," said Bartram. But he acknowledges that price is not the main motivator for his customers.

"We limited ourselves on what sort of products to do - such as limited editions and Corgis, for example - and they haven't gone as well as we would like. It seems that collectors have already got their favourite places to buy and they are very set in their ways. Price isn't as much an issue for them, but going down to Joe Bloggs' shop and sitting down and talking to him about the latest release is important."

Talking cars
Murton is working on developments to the site, including a chat facility for enthusiasts. "We could just put up a message board but we are working on having a true bulletin board where people can chat. In the future [we] will be looking at adding order tracking facilities," said Bartram.

He is also looking to diversify. "We are now looking at other related products. We have been looking at options of higher value items with agreements to ship directly from the supplier. We would be acting as more of an agent and be their interface on the internet. Maybe we could have done that a little a bit earlier," he said.

Manicmodels has found that more of its business than expected has come from car owners who want a model of their own vehicle. The company signed a deal at the end of July with Rover garages to supply them with miniatures for sale in showrooms.

The site has so far turned over between £10,000 and £12,000 - a far greater sum than expected. The initial finance was used for the software and systems, and the company is now looking to finance the promotion of the site.

"People underestimate the costs of advertising. Now we are looking for funding because promotion is the next stage - we need to let a lot more people know about us," said Bartram. The company is looking for up to £10,000.

Bartram said sources of finance are limited. "Venture capitalists are not interested because this is a boom area. We are looking at banks. We did go through Enterprise Agencies but the people we dealt with didn't understand the concept. We want to grow it organically and not get carried away."