When Ayotte Music Inc. was almost beat, the drum manufacturer used an e-commerce strategy to fight its way back to the top.
Last November, Vancouver-based Ayotte saw its stock price flatline at $0.03 per share, but the recent success of its new Web site has made all the difference, as Ayotte has climbed back to close at $0.60 last month.
Don Mazankowski, general manager for Ayotte, said using the traditional method of selling drums to retailers and dealers stopped working for the store, and the management knew they had to try something else – or pack it up.
“We’re a highly customized product, so there’s quite a bit of work in actually designing the drum kit and placing the order. It’s not an off-the-shelf product,” Mazankowski said. “We were in a serious bind, running out of cash flow and other things. So, we decided to try a new method of marketing, selling directly to the customer.”
Because of a large amount of bad debt and difficulty convincing dealers to pay for the drums they had ordered, Ayotte wanted to cut out the middle process.
“The savings from cutting out that middle man could then be passed onto the customer,” Mazankowski said. “We eliminated our receivables and bad debt problem because the customers would pay prior to shipment.” He added that although the number of sales is still down, the bottom line is much higher.
Scott Kerr, a developer at Vancouver’s Bayleaf Software, noted the way Ayotte tested the e-commerce option was interesting.
“They had some control over a news area in their existing brochure ware,” Kerr said. “They started to say to their dealers, ‘If you’re not going to pay for your drums, send them back.’ When they started getting some dealer returns they threw them up on that site to see what would happen.”
Mazankowski explained that Ayotte sold about US$35,000 worth of products in four weeks. He said that six months before they actually went on-line with their Web site, Ayotte was toying with the idea of selling T-shirts or drumsticks on-line.
“So we had gone through a bit of the process and talked to a number of software and Internet design companies and we had asked for quotes on a small-level e-commerce strategy to attach to our (existing) Web site,” he said, adding Ayotte was very impressed with Bayleaf’s professional approach and their interest in Ayotte’s business.
Kerr noted there was not much of an impact on Ayotte as far as software or hardware upgrades went. The Web site runs from a Microsoft SQL Server database and Bayleaf uses Allaire’s Cold Fusion as the application server middleware.
“We decided, given the tight time line, to leverage that technology and extend it,” he said.
Mazankowski laughed when he recalled that Ayotte called Bayleaf and asked if they could have a new on-line store up and running in five weeks. “They said sure and then it just became frenetic.”
The Web site is very easy to use, according to Paul Kuznetz, a drummer from New York and a big fan of Ayotte.
“This is the second set of drums I’ve bought from Ayotte. This one I ordered through the Internet though,” Kuznetz said, adding he enjoyed the control he had over the purchase. “This is the first time I have ever bought a second drum set from the same company.”
He also noted the system left a lot of room to be more creative with requests. He said his new set is unique. “If there’s someone thinking of doing something different, there’s no other way to go.”
Kuznetz, who has been drumming for 24 years, said after surfing the Web site for a bit he was able to figure out his purchase in record time, and he liked that there was no pressure to buy a certain make of drums from a dealer.
He also teaches music, and noted one of his students has bought an Ayotte drum set and will be buying accessories on-line from now on.
Mazankowski said Ayotte’s client base has also changed since switching to a more e-commerce focused organization.
“Servicing our customers before was servicing the dealer. Now the people that we’re talking to are enthusiastic and very educated about what they want,” he said. “It’s a lot more fun talking to customers.”
Ayotte will start to add more accessories to its Web site soon. Kerr noted they will also need to look into providing some of the support services often handled by the dealers.