Online Cloth Diaper/Natural Parenting Store... Has the bubble burst?

[MaryElizabeth]

As I get more and more into the natural parenting world with cloth diapers, carriers, etc etc I have noticed not only the abundance of WAHM stores, but also the lack of "really good" ones. This has lead me to really want to open one of my own. I am wondering, has this market already been saturated? Would another store make it? I know all of this of course depends on advertising, ease of use, product availability, customer service, etc. 

I have great business mentors and resources. I have the money to invest, I have the general know how-- but no online retail experience. I have the time--DD is super easy going and will be starting to do things like preschool soon. I do have a little bean on the way, but he is going to be our last. 

I've considered purchasing an online store already established, but am not able to relocate to over see the management of an established business (DH is in the Army and we will be moving... a lot for the next 3 years) 

I don't need the store to immediately take off and generate income, but I would like to have it be profitable and growing by the 5 year mark. <--- Possibly set up a brick and mortar store in our home town where there is nothing like this and the demand is growing! 

I am super determined and KNOW that I can handle the customer service/fulfillment part of it. Everything that I am not comfortable with--web design, marketing, accounting I can hire out or learn! My in-laws both have doctorate degrees in business and my DH is almost done with his MBA in business management and accounting. 

I guess what I want to know is, is there room for another cloth diaper/ baby store? What would lead you to choose a store to purchase cloth diapers, carriers, etc? 

Has anyone had any experience with this? TIA!

[RoamingWidgeteer]

I can't comment on the feasibility of another diaper store, but I know what I would have liked when I started looking - a store that clearly and simply explained the pros & cons of the different diaper types and brands.

Most of the store I've seen make it seem too complicated, assume you know what you want (how can you know if you're expecting your first and have never changed a diaper?!) or have far too much text, but not enough info. A short video showing how each diaper is used wouldn't be amiss either ;-)

With good SEO I don't see why you can't compete very successfully with existing stores if you present it in a way that makes people see that you have what they need. Having a good website is key to this - and its not going to be cheap to get good functionality and design.

Best of luck :)

[MaryElizabeth]

I agree with this! When I began looking for diapers, trying to decide was so overwhelming! And I still can't find clear and concise info out there. Much less how to videos: good idea!

I will also agree that the websites are also overwhelming! There is a ton to read and you have to "know" what you're looking for. Having a good, easy to use, fun to look at website is my number one goal. Hopefully I can find someone to help me out with that aspect because I have absolutely no web design experience.

[RoamingWidgeteer]

It is really important thing for you to have a clear idea of how the site should work*. Find some examples you like that you can show to the developer, and they don't need to be diaper stores. You will need a site with a CMS (content management system) to make updating content as easy as writing a post on this forum :) - the last thing you want is to have an expensive developer change text for you.

NAK but send me a message if you want more info - I'm in the industry :)

* it's important to sort out form & function before deciding on the wallpaper. What features do you like? Do you want a blog? Shopping cart? User reviews etc ..

[MaryElizabeth]

thanks so much! That is what I have been rolling around in my brain for the past couple of days. It is probably going to take me months to get this right---I am super picky. And it's going to take me awhile to find the right people to work with me. What would be your suggestions on finding good web developer/graphic artist? I am so green at the webpage thing, so I need to learn it before I even try to do it!

[RoamingWidgeteer]

Here are a few issues DH mentioned:

Pick the platform, then pick someone who is familiar with it. Don't use a developer who has a custom/in-house ecommerce solution. The security wont be up to standard for credit card payments.  Also, no shared servers (also a security issue)

Magento, if you have really ambitious enterprise-level plans. http://www.magentocommerce.com/partners/find/solution-partners/  

Shopify if you're going for a smaller shop. They do the hosting, you just need to buy a theme & tweak it. Or pick a developer from the bottom of this list http://www.shopify.com/tour/design

Google Checkout is another option.

Edited by RoamingWidgeteer - 4/3/11 at 4:29pm

[MaryElizabeth]

Thanks so much! You have been so helpful! I really need to start learning all of the different aspects so I'm not picking things out of nowhere... 

[RoamingWidgeteer]

Glad to help :)

[PoppyMama]

I used to work in a brick and morter store that specialized in cloth diapering and baby wearing. It went under about a year ago and the main problem is that cloth diapers are a high labor (you tend to spend a lot of time per sale even if you have classes) and low profit (you don't have the needed profit margin in many of the diapers including the most popular). Its also hard to keep stock of exactly what people want due to both supply (many of the companies making diapers have shortages) and demand (buyers can be picky about colors and such and having everything is hard and expensive).

[MaryElizabeth]

That is what my husband and I were talking about. The profit margin is low for a sale that can potentially be a one time purchase. The store would most definitely have to have a lot more going on other than just diapers. I can't stop thinking about how nice it owuld be to get to try a lot of the things that I have already purchased and want to purchase for my babes. There are very few resources without driving over an hour and even then, they are extremely limited. Of course having a b&m store is way down the road :)

[PoppyMama]

You need something very high profit and with appropriate margins to offset the diapers. High end baby furniture. Like Stokke can work but the people who cloth diaper tend to not be the people dropping lots of cash on stuff like that. Another problem are people who come to look at the diapers and get instruction then order them online to get discounts and avoid paying sales tax. Stores can't give much of any discount on products that only have 30% profit. Normal retail profit margins are 50-53% at the least. As much as I love diapers I think that selling them is more a hobby than a profitable business. To many online stores, shipping costs are high and the overhead of b&m makes it risky. I think I could pay my own wages if I started. A b&m in an area with interest but not too much competition and kept it small and specialized and worked pretty much all the hours myself.

[MaryElizabeth]

I agree with all of that. I want to see how well we can do online and watch the market, not only for diaper interest, but for the availability of a specialized baby store. Finding that high profit item would definitely be key. The diaper market has already changed so much in the last 5 years, its going to be interesting to see what happens in the next 5. 

[Equuskia]

I am planning on opening a diaper business too. However, while I will have a website, I will stay local, and do cloth diaper workshops. I will charge for giving the workshop, but will give at the end of the workshop a gift certificate to each attendant so it seems like they got the workshop for "free" while providing an incentive to shop at my store. I hope this idea is helpful!

[MaryElizabeth]

That is a good idea :) Good luck to you! Yay for cloth diapering stores that are available for locals..... this would have been a God send for me when I started out!

[Equuskia]

Thanks MaryElizabeth. At least in my area, there are still people distrustful of the internet, since they think that they may not get the product after paying or that their info is going to get stolen. Also there are people that don't have paypal or credit cards, and will pay cash. Still further is the fact that it's instant gratification, they get to take home the diapers RIGHT now, as opposed to browsing a site, then deciding against it or going somewhere else.

[MaryElizabeth]

You will do great! Having a brick and mortar is such a blessing :) I'm sure you will love it!

[Equuskia]

actually I was just going to run it from my home and sell at workshops that I plan to do at CBE offices

[MaryElizabeth]

Good for you! You sound like you have a really well thought out plan :)

[Quirky]

This. I actually do think there are a fair number of really good online stores selling cloth diapers, baby carriers, all sorts of other natural baby products. At the end of the day, you're jumping into a market that is already saturated if not over-saturated and it may be much harder than you think to distinguish yourself from the competition, especially in low-margin products like cloth diapers. I've been shopping online for CDs for over eight years and it is unbelievable the number of diaper WAHMs who have come and gone -- and you are looking at an extremely, extremely price sensitive consumer segment who will comparison shop the heck out of any purchase to squeeze the last dime out. Diaper consumers are also often very picky about returns, etc. I.e. you basically have to take them even on used diapers to stay in business.

Although I don't do CDs, I know from hard experience that the idea that great information and great customer service will push people to buy from you is a little naive and overly optimistic. Sadly, many consumers are perfectly happy to take up my time on the phone and online and then go order from diapers.com or somewhere else to save $5 on sales tax, or price, or whatever. It's really hard not to have a race to the bottom -- for example it's almost impossible to find an online site that still charges shipping, because consumers simply don't want to pay it.

I think it's just a factor in the organic/natural consumer sector that people want LOTS of information -- but they don't necessarily want to reward you for giving it to them when there are so many websites offering the same products at the same prices but perhaps a bit cheaper in terms of tax and shipping.

I don't mean to be be completely negative, but you should go in with eyes wide open knowing that the people who generally tend to succeed in this industry are business people first and foremost, and are generally working as many if not more hours than a full-time job. Having a web-based business, especially if you also have a brick and mortar or just do local appointments, is not much less work than having just a brick and mortar. You really need to have a well-developed business plan and know how you're going to distinguish yourself from the huge amount of competition if you're going to do it.
 

Originally Posted by PoppyMama 

I used to work in a brick and morter store that specialized in cloth diapering and baby wearing. It went under about a year ago and the main problem is that cloth diapers are a high labor (you tend to spend a lot of time per sale even if you have classes) and low profit (you don't have the needed profit margin in many of the diapers including the most popular). Its also hard to keep stock of exactly what people want due to both supply (many of the companies making diapers have shortages) and demand (buyers can be picky about colors and such and having everything is hard and expensive).

[MaryElizabeth]

I agree. CD shoppers are indeed very,very frugal and will not hesitate to switch shops just to save $3.00 on tax or shipping. We are still studying the market to determine if there is not only room, but potential to stay alive and make profit eventually. I do not think that it's necessarily naive to think that customer service and information would draw in customers. Banking on those things alone of course would be silly. This market of moms is a tough one for sure! Thanks for the input and opinions, every little bit counts. Thankfully, we have a great resource of business mentors and investors at our disposal ...makes talking things through a little easier!