We talked to Ostap Bosak, CEO at Marquis Gardens, about indoor gardening tips and this is what he said about it.
First of all, how are you and your family doing in these COVID-19 times?
Ostap Bosak: Unfortunately, I contracted Covid in early December and brought it to my family, and at that time, my daughter had not even turned one month old. Even though we have all recovered quite nicely, it was still quite scary for my very young children and my not so young mother-in-law who lives with us. Even with all the precautions we have been taking daily, we did not manage to stay away from it. That goes a long way to say that the threat is quite real.
Tell us about you, your career, and how you joined Marquis Gardens.
Ostap Bosak: I moved to Canada in 2015 (from Ukraine). I started working for Marquis Gardens as a part-time seasonal employee while taking my post-grad college program. By the time the summer was done and I was to be laid off, I managed to convince the owner of the company that I can be useful in the office.
At first, I started working on the Marquis Gardens’ website. It has been long in plans for the company, but as it was a very small family-run business, they had never had time to get to it. Eventually, when my studies were finished, I started taking on more and more responsibilities which later led to my position as the executive.
Fast forward almost 6 years, Marquis Gardens went from 0 sales online to over 40% of revenue generated strictly online. Since then we have more than tripled in size, including annual results, the value of the company, and the size of the team.
How does Marquis Gardens innovate?
Ostap Bosak: In our sector (Water Features), online adoptions are very lagging. Even now in 2021, a good half of the industry has either very limited or no online representation. We as a company recognized that in 2015, and since then everything we do has an online presence in mind.
Marquis Gardens used to be an old school local retail business. We would exclusively service the Greater Toronto Area. And despite that being the prime market for high-end Water Features, Fountains, and Pond Supplies, there are many underserved customers in North America, especially in more rural communities. As the matter of fact, one of our very first online sales was an expensive Estate Water Fountain for a customer in rural Alberta. In our wildest dreams, we have never expected to sell our most expensive items directly online. We were assuming it will be more of an informational tool.
But if you think about it, if you have a very nice home in Alberta, far from major cities and you would like to finish the look with a large water fountain, where do you go? The two closest suppliers are in Vancouver and Toronto. So the fact that we were the only company (at the time) to offer such fountain online with shipping anywhere in Canada or the United States was enough to make that sale. Since then we have put a lot of effort into growing our online portfolio. We now command 5 websites (different product lines, brands, and targeted audiences) with over 50 thousands of product variations and 7 digit online-only revenues.
How the coronavirus pandemic affects your business and how are you coping?
Ostap Bosak: The vector we took 5 years ago towards online presence has paid off handsomely this year. The majority of our local competition has taken a massive hit when we have all been forced to close our physical locations. As it happened right at the start of our most important part of the season, some garden centers decided not to open this year at all. Our online part of the business was already fully operational which made the transition to the curbside and delivery model as painless as possible. As the result, we have not only maintained a normal level of sales but also picked up extra demand created by people staying at and improving their homes while taking the market share of the competitors who could not react as fast.
Additionally, when most of the United States went into full lockdown, one of our major suppliers in the USA told us, that all of their distribution networks has been effectively halted across most of the states. We knew that the only other company that would sell their products online at the national level is Wayfair. But Wayfair being a giant in the retail, has one weakness – expertise. We live and breathe water features, while the Wayfair sales reps can only communicate the information written in the manual. As our orders range anywhere from a few hundred to tens of thousands of dollars knowledgeable sales support is the key.
We have decided to take on this opportunity as hard as we could. The approach was pretty simple – increase ads spend on this supplier’s products in the USA. We knew that the demand is rising, and the supply is almost non-existent, so we have multiplied our ads budget by 10! At the end of the full lockdown, we have been averaging at about 1200% ROAS.
Another strategy we have employed this year was offering a 25% discount on the second item for all of the oversized items which are very expensive to ship. It is not uncommon for the shipping of small to medium fountains and concrete products to cost more than their retail price. We have included the price for shipping in the price tag, but that has essentially has doubled the price for some items. While the minimum shipping price for the majority of our residential LTL shipments is about $300, the incremental cost of doubling down on the size of the shipment is just about $100. Wich the discounted second item, we can share those savings with our customers. As the result, it has increased both our conversion rate and average order value.
Did you have to make difficult choices and what are the lessons learned?
Ostap Bosak: The hardest part was to temporarily lay off the in-store staff. At that time, when the close down order came in, we did not know if we will be able to maintain our revenue to pay for the retail space and the salaries. This was especially uncertain because we are a seasonal business and 80% of our sales were cramped in the 4-month window between May and August.
At the end of the year, when we had preliminary results of our year, we decided to share that success with our employees by sizably increasing this year’s Christmas Bonus.
What specific tools, software, and management skills are you using to navigate this crisis?
Ostap Bosak: I cannot say we used any new tools this year, mostly because we were unknowingly preparing for this crisis for the last 5 years. Nevertheless, here is our tech stack:
- All Websites – Shopify
- Shipping – Netparcel, Freightcom, EchoShip, and Milestime
- Emails, Calendar, and Administration – Google Business
- Advertising – Google Ads, specifically Smart Shopping Campaigns
Who are your competitors? And how do you plan to stay in the game?
Ostap Bosak: In our small niche market, we are already far ahead of the local competition. The only major fountain reseller is Wayfair. Unfortunately, there is much more competition in the Pond Supplies and Pool Water Features segments.
Nevertheless, our strongest competitive advantage is our service and our expertise (we as a company have been doing it for almost 30 years). So the more crowded the market, the more we try to take on more complex projects, where our knowledge can be the distinguishing factor. We recently started manufacturing our line of concrete products – Gardenstone. We developed a line of exclusive high-end finishes, no one else in the industry has. On top of that, we contracted an overseas factory to manufacture stainless steel pool waterfall equipment by our design, as we have seen increasing demand for larger units, better baffle systems, and frankly better quality materials that were not available on the market.
Your final thoughts?
Ostap Bosak: Despite the pandemic, we live in an amazing time of possibilities. Regardless of the size of the business, technical knowledge of the team of even the industry, pretty much any business can go online and operate on the international level while efficiently compete with online behemoths like Wayfair.
Main website: https://www.marquisgardens.ca/
The USA version: https://marquiswatergardens.com/
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