Kelly Costello founded Puppy Cake in August of 2017. Puppy Cake manufactures and sells cake and ice cream mixes for dogs. In three short years, Puppy Cake has leveraged e-commerce to grow to more than $2 million in sales in three short years. Puppy Cake manages two websites: a direct-to-consumer website, www.puppycake.com, and a wholesale site, wholesale.puppycake.com.
It Starts With A “Big Idea”
Puppy Cake began with an epiphany Kelly had while working on a marketing project for her previous employer. “I used to work for a sales and marketing firm and I was working for a client that made cake mixes for people. I was reviewing old cake mix ads and I was like, ‘Oh, wouldn’t it be great if someone would make these for dogs. People love their dogs,’ and that was my light bulb moment,” Kelly said. “'I can do that!' I thought". Kelly took her idea to Shark Tank and appeared on the show as a contestant. “I didn’t get a deal, but I got great publicity and some great advice,” she said about her experience on the entrepreneurship reality show. After trying and struggling with two other e-commerce platforms, Puppy Cake chose AmeriCommerce off the recommendation of a second Shark Tank contestant and friend that also uses the platform.
Kelly also leaned on her experience in the consumer packaged goods industry and how that industry leverages e-commerce to build brands. “Having come from the consumer packaged goods space -- that’s where most of my clients were from -- I knew that e-commerce was going to be critical for proof of concept and getting to the first $500k in sales. Direct to consumer sales are high profit margins and a lot easier to get than getting retail partners,” she said. “So right away, I knew I was going to do e-commerce.” Kelly’s dreams, however, included Puppy Cake products being featured in brick and mortar retail locations. “I knew that we were going to have to transition to be business-to-business. Having worked with Smuckers and Heinz, who were my clients at the time, that’s how they got to where they are by working with retail partners.”
The Biggest Mistake
Kelly’s experiences with other e-commerce platforms created pain points for Puppy Cake. The growth of the retail and wholesale websites revealed the limitations of both Volusion and SAP Anywhere as she searched for a solution to her business needs. “How can I have two separate websites and have them pull from the same inventory? Inventory was a huge problem for us,” she said. “How were my sales? Where were my sales? How many units was I selling from the wholesale site and how many units was I selling on the retail site? I was completely blind, and Volusion offered no ways of doing that.” Enter SAP Anywhere, who sold her on the ability to solve her issues.
SAP Anywhere was the “worst business decision of 2018,” Kelly said. The platform sunset on its customers with little to no warning. “The on-boarding process was really awful. I paid a lot of money up front and the monthly costs were around $350,” Kelly said. “My on-boarding specialist was very professional but not very skilled at her job. When things would come up, it seemed technical support would take a long time to get to them.” Other red flags began to appear and Kelly inquired about the warning signs but never could get a straight answer from her account representative. Two months after going live, Kelly got the email that SAP Anywhere was sunsetting. “When you spend so much money on something you begin to think, ‘It has to be OK,’ because you’ve just gone so far instead of just cutting your losses,” she said. “That was a tough business lesson to learn.”
A helping hand...
Puppy Cake’s business model had significant business-to-business needs and the closure of SAP Anywhere forced the company to reset and re-evaluate e-commerce solutions. Puppy Cake looked to Volusion but found their B2B functionality was lacking. “Volusion wasn’t user friendly because of their inventory control,” Kelly said. Puppy Cake needed a solution that provided a front-facing retail website for the general public and a robust wholesale site with deep B2B functionality. Kelly also added to the mix the need for a single inventory tracking system that both sites could pull from, the need for protected logins, and easily accessible reporting at the product level. At a pivotal time in the company’s short history, Kelly turned to her Shark Tank friends for recommendations. “I found AmeriCommerce through one of my Shark Tank pals, Stefan Arstal. I was like, ‘OK guys, I need to have two separate websites: one that is direct to consumer and one that is business to business. They have to have to have logins, but I want them to pull from the same inventory. Is there anywhere that can happen?’ And that’s when Stefan said, ‘Yeah, I have AmeriCommerce.’” AmeriCommerce's exclusive multi-store tools and deep reporting functionality was exactly what Kelly was looking for.
Why AmeriCommerce was Right for Puppy Cake
Multi-Store Inventory Control
A self-hosted versus SaaS solution was less important for Kelly than finding the right product that met Puppy Cake’s business model. “For me, I was willing to spend a lot of money to get the right product,” Kelly said. “I needed to have a good solution to my pain points: a great business to business website; a good direct to consumer website; and they all have to pull from the same inventory. Inventory is such a big part of our business because our products are perishable. So we really have to focus on making sure we have the right counts. That was the most important thing for me and I would have paid quite a bit of money for it.”
Robust Data Reporting
Reporting is critical for Puppy Cake as well and Kelly noted that the reporting features in AmeriCommerce are essential to her operation. “Time is money,” she said. “I don’t have to spend time pulling reports from both of my sites and then try to have to put them together to make sense of them. It’s all in one place. When I’m travelling I can connect to the dashboard and quickly get to the information I need. I have the last 18 months of [year-over-year] sales on my dashboard so I can see how we are pacing. This helps me as a CEO understand what is going on in my business,” she said. Kelly added that the accessibility of quick data points like “Top Product by Sales,” “Top Customers,” and “Top Categories” helps her see the big picture and develop sales strategies. “I’m big on data. Data doesn’t lie. What’s selling is selling and you can’t fake that.”
Improve Operational Efficiency
Growing Puppy Cake was not just about increasing online sales. Kelly also wanted to find ways to improve operational efficiency. The ability to custom develop middle-ware using AmeriCommerce’s API allowed Kelly to tie her manufacturing resource planning software with her webstores. “I had a custom integration created that connects my AmeriCommerce orders with Katana MRP,” she noted. “I needed to have AmeriCommerce and Katana married, so I had a sync created that goes two ways: orders from AmeriCommerce will sync to Katana and then, when we make products in Katana, it can push inventory into AmeriCommerce. Because of this integration, I ended up saving tens of thousands of dollars because I no longer needed someone to sit there and calculate how much ingredients to buy.”
AmeriCommerce’s platform is saving Puppy Cake hundreds of dollars a month in several areas, Kelly added. “AmeriCommerce is so much easier to work with than what the other options are. It blows my mind that people use Shopify with how expensive it is and they take a percentage of their customer's sales.” Kelly noted that some of her larger wholesale orders are placed directly into the back-end of AmeriCommerce’s dashboard and these large wholesale orders could be subject to the “percent-of-sale” fees other platforms charge, increasing her costs tremendously.
It blows my mind that people use Shopify with how expensive it is and they take a percentage of their customer's sales.
Another area of savings Kelly mentioned revolved around payment gateway costs. “We also got good pricing with your payment services (AmeriCommerce Payments).” AmeriCommerce Payments is the online payments solution fully integrated into AmeriCommerce while powered by a third party payment processors. Kelly agreed that the savings reaped from her platform choice has allowed Puppy Cake to move money into other areas of business critical to their success including marketing, advertising and adding personnel.
Business to Business Functionality
When Puppy Cake started growing, Kelly saw the need for a platform that had more B2B functionality than what she had seen before. “We were struggling with Volusion. Our wholesale pricing is closely guarded. We needed password protected logins,” Kelly said. In addition, cake and ice cream mixes have a limited shelf life so Puppy Cake needed serious reporting functionality to ensure the products they were providing to both wholesale and retail customers were as fresh as they could be. Adding even more value to Puppy Cake’s growing B2B market is the shopping cart’s ease of use. “Probably 90 percent of our sales that hit on AmeriCommerce are business-to-business, so if it’s easy to use and it makes sense we can expect even more sales,” Kelly said.
Ability To Scale Economically
Puppy Cake saw tremendous growth in sales very quickly and she was able to do so without her costs skyrocketing. “Shopify gets people on and it’s cheap to start, but if you grow with them, watch out. Some of my Shark Tank friends that are doing $100k+ per month in sales and Shopify takes a percentage of that. They are paying Shopify thousands of dollars a month.” AmeriCommerce’s pricing structure is intentionally separate from website sales and firmly believes that selling more shouldn’t cost you more. “The pricing is really fair with the way it works on bandwidth,” Kelly said.
Making The Final Decision
After her experience with a sunsetting platform, Kelly wanted to make sure the e-commerce solution she chose was going to be around. AmeriCommerce was founded in 2005 and has thrived for 15 years. “The reputation of the company was important to me. I wanted to know who I got married to was going to be around a while,” she said. “Entrepreneurs will fight a lot harder than a large company will for their business.”
Here's just some of the major accomplishments from Puppy Cake so far:
- Puppy Cake Peanut Butter is the 2nd best-selling cake mix on Amazon, beating out all but 1 cake mix for people.
- Launching the Puppy Scoops Ice Cream doubled the business over night.
- Puppy Scoops Ice Cream Mix received 2nd Place in the "New Product Showcase-Natural Pet" at the Global Pet Expo in 2015.
- Carob Chip Cookie Mix won the "New Product Showcase-Natural Pet" at the Global Pet Expo in 2014.
- Puppy Cake appeared on Shark Tank - Season 3.
- Won "Best in Show" at Global Pet Expo in 2018.
Advice for others starting in ecommerce?
Brand recognition is less important than the product that solves a customer’s problem, according to Kelly. “I see a lot of young entrepreneurs trying to lead with their brand. No one knows your brand. What are you offering? Be the solution to a Google search,” Kelly said. “If you are the solution to a google search and you have a good product that matches that, you will make money with ecommerce.”
“I recommend AmeriCommerce on a regular basis because you can actually grow your business with the platform. You can start with a small company with just two SKUs like I did, and grow it to a company with 150 or more SKUs,” Kelly said.