How I Started A $100K/Month Corporate & Personal Gift Baskets Company
Hello! Who are you and what business did you start?
Hello Stater Story readers! My name is Dmitriy Peregudov, I am a founder of GiftBasketsOverseas.com, a company offering global gift delivery in 200+ countries Worldwide.
We service two groups of customers: personal and corporate gift senders.
On a personal side: think of family members living overseas looking to send gifts, or parents sending a gift to their child, an exchange student studying abroad. Imagine a couple separated by a long distance constantly needing to send flowers, gifts, and personal messages to keep relationships warm.
Then on a Corporate side, we receive orders for Thank-You gifts to clients or business partners, award gifts to employees or contractors, business apology gifts and year-around birthday/anniversary gifts to employees. Many of our corporate customers have lists with hundreds of recipients in dozens of countries and our platform offers them a one-stop shopping solution for anyone on their list for any budget and occasion.
We offer traditional gift baskets with fruit gourmet, chocolate, wine, champagne, cakes and also have unique gifts such as Vitamin gift baskets, healthy gourmet gifts (gluten-free, hearth friendly, bodybuilder) and more.
Additionally, a Basket Builder tool offers an opportunity to build your own custom basket from a selection of wine, sweets and gourmet options we have available.
Company profits vary greatly based on the season - some months without major holidays we may experience a loss, but the busiest season from November to March brings in most of the company profits that average ~ $100K monthly that can keep us afloat for the rest of the year.
Our company’s purpose is to help people build personal and business relationships Worldwide, one gift at a time and since the launch, we had a pleasure to connect more than 2 million people Internationally in more than 200 countries.
What's your backstory and how did you come up with the idea?
Half of my life ago (23 years ago) I immigrated from Moscow, Russia to the United States with an MS in Engineering and was trying to figure out the best way to leverage the degree for my career in the US. I’ve worked in several tech jobs, mostly focusing on Software development and picked up web programming on the way.
While I enjoyed my tech jobs I felt there are more interesting ways to apply my skills. At the same time I’ve seen my father being miserable after he was laid off from his highly paid Hi-tech job, I simply felt there got to be a better way to make a living.
So a friend of mine from University and I launched our first website, initially a hobby business we named flowers2moscow.com - servicing just our home city of Moscow. The idea came from my own negative experience trying to send flowers back home to my girlfriend and to my parents. Product and service experience were far from perfect, so our first website was born.
I’ve done my MBA at Babson College while continuing working on the business and working full time for a tech company.
Later we have expanded to a wider geography in Eastern Europe, Russia, Ukraine, and countries of the former USSR and created a brand RussianFlora.com responding to a growing demand for long-distance / online dating. Western men from the US, Canada and Europe were meeting women in Russia and needed a way to keep their relationships warm and RussianFlora.com was the answer.
Eventually, my business partner moved on to his other career plans and I bought him out while continually focusing on the gifting business. Meanwhile, a new global website was launched in 2007: giftbasketsoverseas.com with a separate team focused on developing a corporate one-stop shopping solution for a business to send a gift anywhere in 1 to 2 business days.
Until 2009 I was working on the business part-time, around 30 hrs per week, but eventually realized that every hour not spent working on the business is a “shot in a foot” and impedes our growth. Then I finally quit my full-time job, benefits and went all-in, despite being just recently married and with a 1-year-old son.
24/7 Multilingual Customer Care became a standard service and we launched several websites in Spanish, French, Russian, Brazilian Portuguese and Chinese languages.
Learn more about our Founding story in our recent Podcast Episode of LongDistanceShort.
Take us through the process of designing, prototyping, and manufacturing your first product.
We’d like to think of ourselves as a “Service” business, so our product isn’t a basket, but a meaning (connection) that this basket facilitates between a gift sender and a recipient.
The biggest problem out there is: how to make gifting easier, quicker and with a lasting impression?
In response, we’ve designed an in-house tool called GiftyLink, which allows last minute senders to send a gift by email or a text message immediately (while the physical gift is en-route). The tool will also offer an opportunity to swap the gift for another, more appropriate gift or donate gift value to a charity.
Most of our gift product ideas came from our customers. We kept our ears open to their feedback, sent surveys out, had in-depth conversations with our top customers and they basically told us what they wanted us to offer. While some products were difficult to source for delivery globally, we worked country by country and got it done.
We now have a creative catalog team responsible for the design of new products that are added quarterly. We test products to see what works best and keep evolving. Today our catalog has over 5,000 products available for Worldwide delivery in under 2 days.
Learn more in this short video:
Describe the process of launching the business.
Looking back to the early days - we started with a very small budget of $1000 for the hosting and few tools, and $50/monthly thereafter. We mostly bootstrapped our way into growth from 2002 to 2005. This is probably the slowest way to do it, but we took our time and learned as we have grown organically, reinvesting early business profits back into the business.
Our very first customer appeared 2 weeks after the website was launched and we were super-excited. It felt like a green-light to keep going and so we did.
I understand now that if we had more funds to invest or raised some capital in the early days we could have grown faster and be a bigger company today. Yet I’ve also seen some of my entrepreneur friends getting into debt, borrowing from their parents’ retirement accounts and not pivoting quickly enough, eventually finding themselves crashed burned. It all depends on your approach to risk: I was risk-averse and didn’t see myself in-debt at that time.
Admittedly, at the time I didn’t see a bigger picture for this business and if I did: my risk approach could have been different.
Since launch, what has worked to attract and retain customers?
Our marketing mix contains top of the funnel activities such as Display Campaigns, Landing pages for gift senders overseas, Retargeting with Facebook, Google and Adroll. We have seen some success with PPC and Facebook audience campaigns, however, you need to stay laser-focused with your targeting efforts - whatever SEM channel you try.
Video has been a strong performer for us, here is an example of one:
Email Newsletters are an important vehicle to stay connected with our 100s of thousands of loyal customers. We have started experimenting with SMS and IM marketing, this is yet to be proven.
Our sales strategy is primarily focused on Inbound efforts with Hubspot in the center of it, however, we have also recently started to grow with more traditional sales tactics.
Occasionally we publish news-worthy PR, however, it’s a minor part of our marketing plan. Last year we started a Podcast “Long Distance Short”, which gained popularity and is growing its listener base. We feel this is a great way to connect with our customers outside of commerce.
Overall we proudly enjoy an unquestionable loyalty our customers demonstrated over the years: we see many returning customers ordering year-round and every holiday season. This helps us minimize the investment into new customer acquisition and focus on retaining existing customers, meet and often exceed their expectations.
How are you doing today and what does the future look like?
In December 2019 our sales have grown ~19% year over year, resulting in annual sales around 6.5 mln USD. With this, we beefed up our technical infrastructure for continued growth into 2020. We are working on new projects, website migrations and channel partnerships that will enable us to accelerate growth while maintaining a healthy profit margin.
At present, around 50% of our orders come from Corporate Customers and the rest are from personal gifting. The majority of our orders come from direct online and corporate sales through a portfolio of 17 multilingual websites we operate globally. We also work with resellers globally and are proud to service several concierge companies, gift delivery companies, and corporate service agencies who outsource their gifting to us.
We also work with Amazon as one of the resellers, however, it’s not our strongest channel at present.
We plan to continue expanding globally in the following years and continue building a global gifting platform for corporate customers to further improve their gifting experience.
Through starting the business, have you learned anything particularly helpful or advantageous?
During my journey with GiftBasketsOverseas.com I’ve learned a lot: worked several jobs starting from Web Developer, SEO/SEM marketer, onto Customer Service representative, Sales Rep, Project manager, and others. Sometimes I had to combine several jobs in my 50-65 hour weeks.
Most of these are now filled with dedicated professionals who are much better at this than I ever was.
Our team has over 60 full-time members distributed globally. So another learning - managing a remote team and trusting that this model would work on an individual basis and collectively. We all work from home offices in 12 countries (in Europe, US/Canada, Latin America, and Asia), in several time zones and speak 7 languages collectively. Our fulfillment partner networks span over 1200 partners in thousands of cities worldwide.
The formula for success was our investment in team culture early on. A few years ago our management team figured out that our core values revolve around Customer Satisfaction, Project Ownership, Flexibility, Accessibility, Respect, Constant Improvements & Innovation. We hire and fire people based on these and they are at the core of many of our internal processes.
Every year since 2013 our distributed team gets together to the offsite meeting in a new country, so far we visited Russia, Turkey, Tunisia, Georgia, Cyprus, Montenegro, Belarus, the United States, Armenia and we are planning new trips in Europe and Latin America this year. This is an opportunity to put virtual green docs to faces, get to know each other better, study together and have a lot of fun doing.
While our audacious goal is to have our own island (warm regards to Richard Branson) - we are not quite there financially yet. Yet we are getting close to it every day, 1 basket at a time :)
What platform/tools do you use for your business?
On the tech side, we use CloudFlare for DDOS protection, WAF security, and website load speed.
On the Marketing & Sales side we are fully integrated with Hubspot: for both Marketing workflow automation, newsletters and CRM.
Also for SEO & Analytics tools, we recommend the following:
- ScreamingFrog - SEO spider
- SEMrush - SEO Analytics
- MouseFlow - for on-site behavior analysis
For communication suite we use:
- Kall8 for the toll-free and local virtual numbers
- Dialpad for the business phone system
- Skype and Viber as a backup International calling option
- Text Impact and MIGHTYTEXT for SMS services
For customer service & communication our tools of choice are:
- PHP Live Support for live chat
- SurveyMonkey for surveys and data collection
- WorldwideConnect for Call-back service
Considering our team is distributed Worldwide we really benefit from collaboration tools such as:
- Zoom.us and Skype for group video calls
- Asana for project management
- Mural for team collaboration and brainstorming
What have been the most influential books, podcasts, or other resources?
I loved Predictably Irrational by Dan Ariely, it gives great insights on decision making - great for Marketing and understanding consumer behavior.
Never Lose a Customer Again by Joey Coleman became our team bible last year. It helps us stay focused on our mission of building relationships Worldwide, one gift at a time.
Small Is the New Big: and 183 Other Riffs, Rants, and Remarkable Business Ideas - by Seth Godin.
I love our own in-house Podcast: Long Distance Short, International Long Distance Relationships Podcast sharing stories of real people building and maintaining relationships over distance.
Advice for other entrepreneurs who want to get started or are just starting out?
The main advice comes from Seth Godin's book “Small is the New Big”. As a small business with limited resources try to focus on a very niche product/service/market and excel at it. Don’t try to go for a large market or to solve all the World’s problems.
Another piece of advice - find your partners wisely and treat your team very well. Care about people, get to know them well and count on them being with you every step of the way.
Lastly: don’t think that you are the best person in the company to do something you are good at. Instead, do your best to rely on your team and pass your knowledge on. You’ll quickly see them getting not only better, but better than you are :)
Are you looking to hire for certain positions right now?
We are generally hiring into our Customer Service and Order Processing team seasonally around September for the upcoming holiday season. Please check our Careers Site for more details.
More on our culture:
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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