Online frontier holds profit, pitfalls for small businesses

Bruce and Judy Parks pack up cakes Wednesday, March 7, 2012, in a commercial kitchen used for their online bakery, ChocolateBakery.com in Sacramento, California. Former owners of Tarts' n Truffles, they closed down their bakery five years ago and shifted to an Internet-only operation. (Lezlie Sterling/Sacramento Bee/MCT)
Lezlie Sterling | MCT
Bruce and Judy Parks pack up cakes Wednesday, March 7, 2012, in a commercial kitchen used for their online bakery, ChocolateBakery.com in Sacramento, California. Former owners of Tarts' n Truffles, they closed down their bakery five years ago and shifted to an Internet-only operation. (Lezlie Sterling/Sacramento Bee/MCT)
Posted March 14, 2012, at 9:23 a.m.

SACRAMENTO, Calif. — Bruce and Judy Parks know the sweet spot when it comes to baked goods. For more than 20 years, their Tarts & Truffles bakery and catering company was a popular Sacramento-area fixture, serving everyone from governors to grandmothers.

But by 2003, the couple found it increasingly difficult to manage the challenges of a walk-in business. There were continual staffing, leasing and inventory control headaches, as well as the daily betting on what baked sweet might sell on any given day. Every $25 cake that didn’t go out the door still held $12 in labor and food costs, which essentially “got thrown in the waste can,” said Bruce.

Convinced there was a better way, the couple cooked up a radical idea, at least for a bakery: online-only.

In 2006, the Parkses launched ChocolateBakery.com, which takes daily orders for personalized cakes and other baked goods, then ships them for overnight delivery in all 50 states.

Similarly, their local website takes online orders that are delivered to homes and offices or picked up by customers at some local gourmet stores.

ChocolateBakery’s evolution as an online retailer is a classic recipe for how small businesses can build and boost their customer base. But as the Parkses discovered, it isn’t enough to simply launch a website and let it sit. To succeed, business owners must become schooled in using search engines and social media to attract customers.

“We’ve evolved as technology has evolved,” said Bruce Parks, who handles the online side of the business, while his wife, Judy, a culinary instructor at American River College, handles the recipes and product development. “Without Google, Facebook and FedEx, I couldn’t have a business.”

Shifting the bakery to a Web-based business dramatically cut overhead. ChocolateBakery shares staff and bakery space in south Sacramento with Bella Bru, a local cafe chain. Its personalized cakes, brownies and other desserts are baked only when a customer orders and pays online. They’re shipped frozen — in padded “pillows” filled with dry ice — overnight.

While ChocolateBakery doesn’t release specific sales numbers, Bruce Parks said profits per cake have more than doubled since going online-only.

Along the way, Parks taught himself how to stand out amid the Web’s herd of competitors.

He’s learned to choose keywords that place his website high in Google searches, a practice called “search engine optimization.” He also utilizes the “pay per click” tool, where a business pays Google or another search engine operator every time a customer clicks on its online ad. In addition, a company can pay to have certain key words linked to its ad.

For an online business, mastering the art of selecting keywords is essential. Choosing words that are too generic, “gardening” or “plumbing,” for instance, won’t elevate you high on search engines, amid all the similarly competing companies. Sometimes the slight difference between “delivery” and “delivered” or plural or singular names can make a difference in how customers find you online.

“I wasted a lot of money before I figured that out,” said Parks.

He spends anywhere from $200 to $3,000 a month on Google, depending on how and where ChocolateBakery’s ads appear. Using Google’s analytical tools, whose flood of available data is like “trying to drink out of a fire hose,” Parks said he can pinpoint which search words get used by most people and which ads yield the most Web traffic.

For instance, looking at Google data, he noted that many customers were initially searching for “red velvet cake.” ChocolateBakery didn’t offer a red velvet cake in its online menu, but quickly added it to the lineup.

“The entire process from the time the cake was photographed to going on the site and getting a sale was, maybe 45 minutes,” Parks said. “Bingo, I had business.”

He’s also partnered with other online companies, including Omaha Steaks in Nebraska and a gift company in Calcutta, India, to sell Sacramento-baked cakes from those websites.

ChocolateBakery.com gets orders from about 30 foreign countries for products such as birthday cakes that go to students studying at U.S. colleges.

It hasn’t been a straight upward trajectory, however. In 2008, sales crashed in the recession. “It was like being in a plane hitting an air pocket,” said Parks. “It felt like we were dropping into oblivion.”

Instead of throttling back, Parks said he stepped up everything, including the bakery’s Facebook presence. He spends about $200 a month on Facebook ads, which can be drilled down to target specific audiences, such as New York City women, college-educated, between 25 and 55, who say they like baking.

Parks also works with WildFire Interactive, a Redwood City, Calif., company that creates contests, coupons, quiz games and sweepstakes for Twitter and Facebook. ChocolateBakery has acquired 6,000 fans through its Facebook promotions, such as getting fans to “like” its pages. Those who do are entered into monthly sweepstakes, with giveaways such as a Valentine’s filet mignon dinner and dessert for four.

But do those 6,000 “likes” translate into actual sales? “That’s still a little hard to track,” admits Park. “But just like having a Web page, you have to be there (on Facebook).”

More recently, the Parkses branched into another electronic medium: e-books. In February, they debuted “Valentine’s Desserts,” a recipe book available for iPad, Kindle and Nook readers. It features 10 recipes for chocolate desserts, including step-by-step videos — shot in Sacramento — featuring Judy whipping up raspberry napoleon hearts and chocolate cappuccino cake.

So far, they’ve sold 125 copies. At 99 cents each, the dessert e-book is not so much about making money as about building a brand. Featured on Amazon, iTunes and Barnes & Noble sites, the e-books are another way to add heft to ChocolateBakery’s online presence.

Once a small business is online, there’s a tendency to “fire up and forget,” said Ryan McCann, vice president of digital strategy for Bauer360, a Sacramento-based online marketing firm. “Ongoing maintenance is the biggest hurdle,” especially for owner-operators who are busy running a business. He said small firms need to make regular weekly or monthly adjustments — changing a headline, adding a photo, announcing a sale — that keeps content fresh and ensures that search engines find their site.

For Parks, tending his online business is never-ending. For instance, he uses Google tools, like AdWords, to experiment with which key words produce the best results. The continually morphing nature of Google and Facebook can be overwhelming, he said, but the alternative is economic oblivion.

“Not having a website today is like not having a phone number,” he said. “Even if it’s rudimentary, you need it.”

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