Fiona Phillips, MD of local online wine merchant, CyberCellar, believes the experience she gained from her time spent on the London, New York and Johannesburg stock exchanges has helped her in starting the business.
"My MBA from the University of Cape Town has also proved invaluable," she adds. Being a wine lover, Phillips noticed that there was a gap in the market for a wine agency; a company that can sell especially Cape wines to other areas.
"Many people from Johannesburg, for example, make the annual great trek down to the Western Cape to stock up on wines. This is fine, however, the issue of space often arises when they go back with their cases of wine."
When Phillips mentioned the idea of starting a wine agency to her brother, he suggested she start the business on the Internet. CyberCellar was launched at the end of 1998. She cites R200 000 as a ballpark figure of what it cost them to get the company up and running.
Phillips is excited about the way business has taken off through just word-of-mouth advertising. "We are pleased to say that we have already had orders from the UK as well as Europe. We hope to break even within the next 12 months and be fully profitable within 24 months."
Small start
"We decided to start small without any fanfare. The reason: What if it really takes off and we don`t have the capacity to handle the orders? We wanted to have the back-office systems and staff in place before we launched any campaign."
She is confident that the time is now ripe for that. CyberCellar`s main target is Gauteng, but she says there are also customers in the Western Cape who don`t want to drive to different wine farms to get wine, so they order online and get it delivered to their door.
Although the focus is currently local, Phillips notes that "it would be silly to ignore the international market".
"We also plan to have a global representation of wines on our site. At the moment we only have SA wines, but within the next two years we plan, through partnerships, to extend the choice to include international wines."
Online purchase patterns
Phillips says that although there are still many sceptics, more and more people are using the Internet for purchasing. "What we find at CyberCellar is that a person will place a small order. Once they`ve received it and are happy with the service, they soon come back for the more expensive reds."
She adds that the only way CyberCellar will be a success is through customer service. "We believe in one-to-one relationship building. Our clients are gods and we cannot spend enough time and effort making sure they are happy."
CyberCellar is busy putting together an extensive database of all its clients, their buying patterns, as well as other information relating to each customer. "We want to be able to let our customers know when there is, for example, a special on a specific type of wine that they enjoy or what wine to purchase when they have a special occasion coming up.
"We will maintain the database ourselves in-house, keeping in very close contact with the wine farms as well. All of this makes use of the original M-Web software designed to integrate entirely with the Internet."
CyberCellar has outsourced its delivery mechanism. The company uses a courier as well as the post office to deliver orders. "The speed with which customers receive the goods depends on how much they are willing to spend on delivery. Overnight is more costly than that of normal snail mail."
She adds that CyberCellar`s prices are very competitive when it comes to traditional liquor stores. "We also provide customers with the advantage of being able to have all the information available at the touch of a button when they want it."
Virtual tasting
Another first for SA, according to Phillips, is a virtual wine tasting session coming up next month. It works as follows: A customer places an order for the selection that will be tasted. It gets delivered to their door and CyberCellar e-mails the details of each tasting.
On the allocated date, the customer logs-on and takes part in the virtual tasting, which features wine experts` comments.
Phillips is optimistic about business prospects at the end of this year. "I believe that last Christmas the online computer stores were very busy with orders. This year the consumer-type sites will also get the business. We are going to have a crazy Christmas."
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