Member Article

Behind the business with a hot tub retailer

Daniel Thomas is managing director of Danz Spas, an online hot tub retailing business. He takes Bdaily behind the business.

What key challenges has your company recently faced?

There are three main challenges we’ve been up against recently, namely the weather, cash flow and cheaper competition.

• Weather – the amount of sales we get depends on the amount of sunshine we have. The poor summer last year, and the very slow starting summer this year means we have to work harder for every sale. My response is a new website and new sales staff in order to keep sales up.
• Cash flow – our card merchants hold 15% of all transactions for three months and even though sales are booming they still consider us a ‘high risk’ business because of the value of our orders and the fact they are all done online. This means we’re forever out of pocket. We have no way of dealing with it other than to sell more hot tubs.
• Cheaper competition – when I founded the business, our USP was low prices. The problem is there is always someone out who’s prepared to undercut our process. We’ve had to re-invent the business with a far greater focus on service for our customers. Rather than having sales people, for example, we have account managers who build real relationships with customers throughout the life of their orders. Needless to say we get to know our customers very well. Our focus now is offering an ‘affordable product’ with a hassle free service.

What is your biggest achievement over the past 12 months?

My biggest achievement has to be hitting £1million turnover. On a practical level it doesn’t do anything for us, but it’s a milestone achievement and helps fire the team up towards hitting the next million. The real achievement has to be our online marketing strategies. We’ve invested huge amounts of time in this and it’s paying off, hence the reason we’ve achieved £1million turnover.

What is your most important focus for the coming year, and what do you hope to achieve?

Our main focus over the coming year will be to re-enter the French market on a trade basis. I hope to start a new brand where we will sell to showrooms, garden centres and trade specialists in France. It will mean freeing me up from the day to day running of the business to allow me to focus on this and other large projects. We’ll be taking on more staff to enable me to do this.

I will also be focussing on completing the transition from being a company offering cheap hot tubs, to a company offering a hassle free service. Our staff will allow us to take our service to a whole new level. We’ll be able to book cranes, electricians and other tradespeople for customers and will handle the whole process from the initial order to the installed, functional hot tub. This is unheard of for an internet based business - usually they just deliver and the customer does the rest.

What excites you most about your industry and business?

The hot tub industry is ripe for a makeover, crying out for new ways of marketing and selling the products. The industry has been around for years and traditionally people will by overpriced hot tubs from showrooms. The industry needs some entrepreneurial spirit and a new way of doing things.

That’s where we come in. We’ve come into the industry offering products at a far lower price, with better services, and we’re causing a huge amount of disruption. The thing that excites me is seeing how well our internet marketing works – after all, we could apply this principle to any industry.

What do you wish you’d known when starting out?

Having a business partner and investment would have made the early days of the business much smoother. I started the business in 2007 and it’s only over the last two years that things have really taken off for us.

A partner, ideally one who’d been in business before, would have brought some much needed experience into the company.

What will be the “next big thing“ in your industry, and how do you plan to handle it?

I genuinely believe we are the next big thing in our industry. It is a traditional sector and I think it will be people like us that change it. We have a couple of big plans we think will change the world of hot tubs but we can’t mentioned those just yet!

This was posted in Bdaily's Members' News section by Tom Keighley .