Husband and wife Stefan and Amber Merlo have had to temporarily close down both of their businesses due to Covid-19 in Auckland. So to earn a living they launched a new online lolly store in the middle of the lockdown. Stefan talks to Rahul Bhattarai about their new venture - the Lolly Drop.
What does your business do?
Lolly Drop is an online lolly shop.
We are only open for four hours every Sunday from 8pm until midnight or earlier if we sell out.
We sell only 500g bags of lollies for $13.99 and every week we have a theme, this month we are doing Halloween-themed lollies.
What was the motivation for starting it?
Amber's beauty salon - Verdo Parnell - and my events business Verdo Events are temporarily closed due to the lockdown, and that has left us with zero income. We have had to close every time we go into a lockdown so we wanted to create something that was "lockdown-proof" and the idea of an online business seemed great.
What's your background?
Although my wife Amber is a beauty therapist, she also did a stint in the corporate world where she was a financial accountant and operations analyst before opening her salon in 2010.
I have spent 15 years in the corporate world, working with Datam for six years before leaving to run our events business a couple of years back.
How big is the team today?
It's just the two of us across all three businesses.
What is the most difficult thing about starting a business in the middle of a lockdown?
Getting things sorted. We have had to click and collect things, but they needed to be organised days before. Waiting on things like registering a new company and bank accounts, as normally we could have gone into a bank. Companies are delayed so that has slowed down the process.
How long has your business been around?
Our business has been around a couple of weeks, so it's brand new but we officially launched yesterday.
What's your focus for the remainder of the year?
Since I don't see our other businesses being able to open before the end of the year, we are hoping to grow our Lolly Drop as much as we can.
What are your long-term plans, and where do you see the brand in five years?
At this stage with uncertainty posed due to the lockdown, we haven't been able to think about the future. But we have thought about tapping into our events connections and working with them for corporate-branded lolly bags when they have an event.
How does your business stand out in comparison to other businesses in the market?
We are different from every other lolly shop. We are working on a scarcity model, we don't have a never-ending supply of lollies. Also, customers only have a four-hour window to purchase.
A short purchase window means we'll have plenty of time to get their order on the courier the very next business day, so there isn't any delay on shipment from our end.
We also don't carry old stock, the plan is each week to sell out. So our customers can be assured that our lollies haven't been sitting around for a long time.
How are you marketing it?
We are doing a really big push on social media, this is our main form of marketing. To start with we have got a few influencers involved to help us out. We have run a competition giving away a cash prize and a year's worth of lollies. This has helped grow our Instagram account by 600 in 14 days, and it's still growing.
We also have a mailing list that people can join, so they'll be informed when the lolly "drop" is about to happen.
What does the competition look like in this market?
There are a few online lolly shops, with great selections, however, we have found their dispatch times are longer, we personally don't think that's acceptable. Since we run our business differently, I don't feel we are in "competition" with them.
Our philosophy with our businesses is to just focus on what we are doing and offering, we don't worry about what others are doing.
We have always focused on our strengths and that has served us well with our other businesses, so will carry that through to Lolly Drop.
What advice would you give to someone who is thinking of starting a new business?
It's really important to understand the market that you are going into. Do your research and learn about the industry you are planning on entering. And as your experience grows you'll know your strengths and then you can focus on building your brand.