I set up Chemist Direct in 2007 after coming up with the idea while helping out my wife Krishna at her Westminster pharmacy.
Noticing the huge mark ups between manufacturing and retail prices, we realised costs could be slashed by cutting out the middlemen and keeping overheads down by using e-commerce. Today Chemist Direct is Europe’s largest online chemist.
After spending a year researching my idea, I took the plunge and established a clear goal – “to supply cheaper chemist products to everyone who has access to a PC and to deliver those products to their door within 48 hours.” To save money, an office was set up in the shed at the bottom of my garden in Leicester and I used £100,000 of my own money to set up the company and the website.
By the end of the first year, the company had a multi-million turnover and 40,000 hits a week. In March 2009, a £3m investment from the former founders of Skype with their VC fund Atomico, allowed me to increase the number of employees to 50 and to expand the company’s product range to 30,000.
Free advice
Make sure you also stay focused on your initial goals – so you always have a clear idea of what you are working towards
Before setting up your business, you should research the market you will be trading in and find out everything from the size of the market, possible demand for your products/services, and identify your target market and competitors. Get free advice or funding from business development organisations such as Business Link or bounce ideas off other entrepreneurs, which I found this immensely useful.
Make sure you understand the legal intricacies of starting and running a business, including VAT registration, health and safety, and employment law and if you’re really struggling get advice from someone who does, or go on a course to learn more.
When starting out, costs can be kept down by saving on office resources and working from a spare room or shed. Make sure you also stay focused on your initial goals – so you always have a clear idea of what you are working towards.
It’s inevitable that there will be some mistakes along the way – but make sure that you learn from them. We had a soft launch of Chemist Direct where my family and friends tried out the website. This identified a few teething problems but meant that they were ironed out by the official launch.
Asking for feedback from customers and suppliers is also immensely useful – some of our product ranges such as the pet section are the result of customer feedback and demand.
It’s also important to understand the strengths and weaknesses of your company in order to make it a success. Chemist Direct is an online business which has many benefits. It is open 24 hours a day, seven days a week, no front of house staff are needed, and you are able to offer low prices and react quickly to changing demand.
Consumers have become more confident in shopping online and figures show that in 2010, 31 million people in the UK bought goods online. But being online also means that there is a lack of face-to-face interaction between the company and its customers, which means customer service always has to be spot on.
