In its second-largest acquisition, Amazon buys the company for $970 million.
Homegrown solutions and quick reactions turned around a dire situation at TShirtKing.com.
Twenty-five years ago, Bill Broadbent was creating and selling t-shirts for the likes of Arlo Guthrie and The Band. Today, the 18-person company of which he is president, TShirtKing.com, books millions in annual revenue and is on the way to its goal of becoming the largest international retailer of licensed t-shirts.
It was e-commerce that helped the company scale up-and e-commerce glitches that almost unraveled TShirt-King.com last year when it made a technology switch that was supposed to make operations easier. Instead, sales sank by 70% in one day and stayed there for weeks until the company figured out what had happened and battled its way out of the hole. TShirtKing emerged with sales restored to 20% beyond normal levels, an internally developed shopping cart that would become an award-winner, and a boatload of knowledge that offers an object lesson to any growing e-retailers poised at a similar fork in the road.
Outgrowing its ISP
Broadbent’s company, founded in the late 1970s, had evolved into a wholesale operation that provided licensed t-shirts to retail stores. Intrigued by the new medium of the Internet, the company put up a few t-shirts in a Yahoo store in 1998 and got its first online order the next day. “We got hooked on the idea of being able to put up as many designs as we wanted,” Broadbent says. “In 2000, we decided retail was more fun.” The company shuttered its wholesale business, put up its own web site, and started growing revenues at 30% to 40% per year.
At what it believed were 10,000 to 12,000 unique visitors per day, TShirtKing.com outgrew the capacities of the local ISP it was using and last August moved to a large web hosting company. Immediately, the traffic to TShirtKing.com crashed two servers at the hosting company, and sales plummeted by 70% in one day.
Over the new few days, Broadbent, his webmaster, web developer and the hosting company started piecing things together. It turns out that TShirtKing’s traffic at the time of the switch was closer to 20,000 to 30,000 unique visitors per day, two to three times the volume it believed it was getting. “As soon as we went to the hosting company, our traffic shot through the roof in one day,” Broadbent says. Broadbent and his team now believe that for reasons that remain unclear, the local ISP had capped traffic to TShirtKing, a practice bandwidth providers sometimes use to keep costs low or to address technical limitations. The net effect was that some shoppers trying to reach TShirtKing had never arrived there, so the company didn’t have an accurate read on its traffic or potential traffic until it switched providers. As a result, the hosting company was unprepared for the volume.
And that inability got translated into shopping cart crashes, probably one of the most frustrating problems for shopper and retailer alike, as the one is ready to buy and can’t while the other can literally see customers dropping merchandise and leaving the store.
“The hosting company was using a shopping cart that couldn’t handle the traffic,” says TShirtKing head of technology Josh Bauguss. “There were too many calls to the cart per user and it loaded up the server so much that it stopped responding.”
When initial efforts to work with the hosting company, including a web site redesign and a new shopping cart solution created by Bauguss, failed to turn things around, TShirtKing took its new cart and its businesses elsewhere. “Operating on 30% of our income for three weeks was not great,” says Broadbent. “We had to do something.”
Lease-to-buy a server
TShirtKing.com first considered installing its own server on its premises to host the site, but that proved cost-prohibitive. The company then found a lease-to-buy solution at Host2Own.com. The San Diego-based company operates a fleet of servers and buys bandwidth in bulk, both of which it leases to other companies. TShirt-King pays a monthly lease on the server, plus a monthly fee for bandwidth consumption. In three years, it will own the server it now leases, which it will continue to operate remotely in San Diego. Ownership gives the company the advantage of control over the server and the freedom to make changes, such as installing new software, says webmaster Jeremy Van Bibber.
Settled on the new server, TShirt-King focused on refining its new shopping cart, which Bauguss had created in PHP, an open source scripting language widely used in e-commerce. Early versions of the cart still produced a poor sales-to-visitor ratio. For example, the cart regularly lost products shoppers had placed in it. Bauguss eventually determined that while the cart depended on browser cookies to load up orders, 30% of site visitors had turned off their browser cookies over privacy concerns. The cart now uses PHP-based session management, in which a piece of code tracks each unique visitor’s movements through the site and repopulates the cart attached to the number on each new page the visitor enters.
After three weeks when sales were down by 70%, TShirtKing’s improvements started lifting sales gradually, returning them to normal levels by week six and currently, about 20% beyond what is was just prior to the crash in August, Broadbent says. The cost to the company, besides loss of sales, was in some round-the-clock staff time.
No eureka moment
TShirtKing got something else out of the experience as well. “In the end, we didn’t wind up with just another shopping cart. I think we have a better cart than anything I’ve seen out there,” says Broadbent. So does an industry group called the Safe Shopping Network. The group, which tests the security and reliability of shopping solutions for e-commerce companies that pay for the service, recently gave TShirtKing.com’s shopping cart a perfect score, topping more than 200 online apparel companies including such giants as Eddie Bauer and Lands’ End.