Tick awareness week

Gareth    Gareth, General Outdoor     Gareth, lyme, tick

I was narked to see on Must be this way that I had missed Tick prevention week. Being a lover of the outdoors, ticks are a nasty risk that we all run when walking in our beloved country but the consequences of getting Lymes disease and the resulting effects are cautionary. So whilst you may have a spring in your step with the weather right now, keep those long trousers on and check the links above for further information about what to do. I have to be honest I had no idea how to remove a tick, and frankly enjoying the outdoors as much as I do, it’s a poor show I have only just read up on how to get rid of the blighters safely.

Banks, Cards and the net…

Gareth    eCommerce    

Well, we’re flying high here over at Webtogs HQ. Business is good and we’re not seeing any signs of the ‘Credit Crunch’, in fact, all we seem to do is grow our business from month to month.

Now, before you switch off and file this in the ‘yet-another-corporate-ego-things-are-great-rubbish’ drawer, I actually have a more sour point to make in my post today.

This one is all about, well…. Banks.

Now, for some background. Like nearly all Internet retailers, we accept both credit and debit cards on our site. It’s a fairly well trodden path this, so I won’t bang on for ages, but the important point here, is we have an ‘Internet Merchant Account’ with our bank. So, our customers come to us each day and checkout orders, the transactional side of this process (credit card numbers, order amount, etc) is then sent to our ‘Internet Merchant Account’, via our partner protx. All good.

‘Internet Merchant Accounts’ exist for one main reason, they process what is known as CNP transactions. This stands for ‘Cardholder Not Present’. To put this into context, if you run a shop, petrol station, resteraunt or any other enterprise where customers are actually present, they enter their PIN and make the transaction. These transactions are obviously more secure as the customer is present and uses their PIN, hence the need for seperate merchant accounts. We, in fact, have 2 accounts, one for our web site and one for our shop.

The perceived risk to the banks, for CNP transactions, is mainly default by the retailer. Now, imagine Dodgy Ltd has an Internet site. They sell widgets. As soon as their customers complete checkout, Dodgy Ltd charge their customers card. They then don’t ship the widgets. They carry on like this for as long as they can, before they go bust. Now, at this point, Dodgy Ltd have a raft of angry customers who complain to their bank. The banks then go to Dodgy Ltd and find there is no company or money left. So the banks fork out. (by the way, I made Dodgy Ltd up, if you have a company called this, please (a) understand my dodgy ltd is entirely fictional and (b) consider a name change!)

Now, if you’re still with me, kudos. The net result of all this, is the banks perceive Internet transactions to be risky. Very risky, as it turns out.

So, what do they do about it? Well, here in lies the rub. They either ‘defer’ the retailers credits by up to a month (meaning the customer pays on day 1, the bank then sit on the cash for 30 days and then credit the retailer 3 days after that) or, more commonly, they require security. The method of calculating the required amount of security (read cash cover), varies between banks, but it tends to be between 2 weeks and one months gross billings.

To illustrate, if you run an e-commerce site and you turn over £100 per month in gross sales, the bank will require you to deposit between £50 and £100 into a separate bank account. This separate bank account cannot be directly accessed by the retailer, and doesn’t appear on the retailers balance sheet*. The final cherry on the cake, is this ‘special account’ pays no interest!

Now, we began life with our bank on 30 day deferred settlement. This was painful in cash flow terms, but we could cope. The business then grew and grew, and it got to the point where we simply couldn’t make it work. After negotiating with our bank, we agreed to post a £10,000.00 bond. This was back in Q2 2008. Happily we moved forwards and continued to grow. One fine day in January, our bank called. They now wanted £100,000.00. Yup, that’s right, One Hundred Thousand Pounds. Why? We were growing too fast and our monthly billings had multiplied by a factor of 20.

Don’t think for a second this is just our bank, it’s not. I’ve spoken with 2 other major high street banks and their attitude is identical. We are currently negotiating with a third, and that’s going well, thankfully.

Now, unchecked or irresponsible rapid growth is actually a danger sign. However, to put this into context, at this point (and today, actually), we had NO debt. No overdraft, no loans. We had cash in the bank, quite a bit of it. We were profitable and cash flow positive.

As a result of this, we naturally entered into negotiations with the bank. We explained that, as a result of our business model, there simply wasn’t any default risk to the bank. You see, we don’t ever charge our customers until the goods have been shipped. So unless Royal Mail steal all of our parcels, we’re fairly clear on this one. We also hold 100% of our stock, in our own warehouse (this is actually very rare for an e-retailer).

Several weeks, meetings, phone calls and frustrated rants later, we had got nowhere. The bank simply didn’t understand our business model and couldn’t see that we didn’t present a risk. They consistently argued that whilst our model may be risk free now, we could change it on a whim and start to charge our customers before dispatch, or even fraudulently (thanks for that, by the way!). This simply isn’t the case, it would be horribly expensive to change the many procedures that control our stock management, checkout, billing integration, logistics and end of day procedures. As for fraudulent charging of our customers cards (putting to one side the moral aspects of this), we don’t store our customers card details, so this would be almost impossible.

Anyway, this is on going as I write. We will, no doubt, move banks at some point, but for now, it seems to be put up or get lost. Now, thankfully, we’ve got enough cash to cover this, but I’d hate to think what would happen to a similar business who didn’t. We’re a growing, new economy business. We’re employing new people, providing revenue to all our partners, and generally a nice bunch of people (OK, granted, that’s not an economic positive, but we are, really!). The irony in all this, is that the banks are creating what they fear the most, in issuing punitive demands for cash cover or delaying payment of revenue for long periods of time, they are creating very default risk these policies are designed to prevent. But, i guess, as long as the banks don’t have to pay, it’s all OK.

On a final note, I was chatting with someone (a junior someone to be fair) from one of the major banks about moving our account over and was talking about what we did as a business. After explaining our model and market in some detail, he replied “Is there much call for outdoor gear in Gillingham?”….

*We’re actually looking into this right now, so don’t quote me on that!

Hambledon Hill

Gareth    Gareth, General Outdoor     Gareth, Hambledon Hill, Walk

Amongst the unseasonably nice weather we have been having recently, we have been exploring the Dorset environs a bit more. Dorset isn’t just retirement homes and farms thankfully, we have been pleasantly surprised at how varied the terrain is as well. So, donning our Sunday best, we headed down to Child Okeford and took a stroll up Hambledon Hill in the glorious sunshine.

Hambledon Hill is an Iron Age hill fort which has some fantastic ramparts and dtiches that still survive. It goes back however even further to the Neolithic age, but evidence only survives from the Iron Age. What amazed us while we were up there was just how much earth had been moved. At that time in history and with the tools at their disposal, that must have taken a fair bit of human endeavour and actually walking across the fruits of labour from all that time ago really brings home how much effort it all took.

Ifor had a fab time rolling down the ramparts and ditches, we have recently switched our walking around so that we try and get him out of the child carrier early. He then gets tired quickly and we get a good long walk which is much better than having him run around at the end generally not having had a nap.

It was then a question of strolling amongst the Leylines as the hill also has great spiritual significance to a lot of people – my better half was dodging hippy’s up here over spring solstice. Sunday though, we had it all to ourselves, and the wonder & history of the place gave us a real lift.

Easter Competition

Gareth    Gareth, General Outdoor     competition, Easter, Gareth

Well we have had a twitter competition, so I reckon it’s time for a blog competition!

Pride of place we have here is a brand new North Face Doormat to make you the envy of all your neighbours or to take with you as the ultimate stylish accessory for your tent when welcoming you home after a hard day on the hill. We’ve combined this with a Victorinox Pen knife, Frisbee, Sit Mat and a base layer of your choice to the value of £30 from the site to help your Easter start with a bunny like spring.

What do you have to do to win this selection of goodies? Well all you have to do is to detail your favourite camp food recipe in the comments below. This could be anything from your favourite one pan dish to a rehydrated cordon bleu goodness idea. The winner will be the person who tickle our taste buds the most.

Now where’s my apron……..