David Hyett, Foneshop.com
Foneshop.com started five years ago and now sells its mobile phones and accessories all over Europe including Germany, France, Spain and Italy. The company prides itself on its high level of customer service and prompt delivery.
Hyett noticed that there were roughly 200 orders a day going out to Italy but that delivery, which was initially from the UK, was a problem. 'Because of the Italian postal system, it was getting more and more difficult to maintain the service level required,” he explains. “So we decided we needed a presence in Italy. In that way we could look after the level of business and sort out the postal problems.'
As the company delved deeper into the idea of buying in Italy they realised that there was a strong opportunity to grow. 'I would say Italy is about ten years behind the UK in terms of the whole ecommerce thing,' Hyett says. 'There are not a lot of opportunities for people to buy online outside eBay. We noticed that prices for mobile phones and accessories in Italy were 40 per cent higher than the UK and came to the conclusion it would be a good opportunity for us to get in and take the market share. We knew from our experience with sales from Italian customers that the demand was high and that Italian customers were looking to buy online more and more.'
In September 2013, Hyett decided to do some serious research about moving his business into Italy. He wasn't sure whether to buy an existing company or start up a new one. 'And then during an online search, I found BEV,' he says. 'I got in touch with Ben Radomski and we had a chat. He assured me he could help and within two weeks he had found a suitable company for sale in Milan and booked us in to go and see it.'
The business concerned was a shop and ecommerce store. As Hyett had no interest in running a shop he wanted to just run the ecommerce part and to have the purchase price reflect that. The owner was overly optimistic in her pricing and wanted more than the company was worth, but Radomski managed to swiftly negotiate a deal that satisfied both sides. 'Then all that remained was the legal stuff and Ben sorted out all of that for us as well,' Hyett continues. 'He handled the accountant, the notary, got us office space and helped retain the existing staff too. It was extremely efficient and reasonably fast too.'
BEV also assisted in solving a few teething troubles related to the change of ownership, including one quite serious one involving the company's Amazon account. The former owner had opened a new Amazon account using the same name as her old company, something which is against Amazon policy. Their response was to close down the one belonging to the company Foneshop had just bought! 'Amazon is an important part of our business, but Ben dealt with everything and resolved it quickly, so our sales didn't really suffer.'
Since purchasing the Italian business, Foneshop have set up in France and Germany. They are also in the process of building three more sites for the Italian market to be ready by March 2015. Hyett views their investment in the country as a long term activity and is not fazed by the crisi seeing it as an opportunity to get in early in a market that is growing at a phenomenal rate. 'I've noticed that many Italian businesses seem to think making a loss is fine and maybe they have had to do that to protect their current level of business, but that is not our way,' he explains.
The Italian company is owned by the UK one, but is registered in Italy and complies with all Italian regulations. There are two dedicated members of staff in the UK, one a fluent Italian speaker and the other a native Italian, tasked with running the Italian website and most of the customer service, so the whole operation is very streamlined.
Goods are now dispatched from a warehouse in Italy and the Italian staff also do some customer service. Despite the fact that a key motivator in having a presence in Italy was to solve delivery problems, this is still an issue. Although Foneshop send higher value products by courier, the post is still the most viable option for lower cost items. But buying an Italian company has not changed the vagaries of the Italian postal service.'In the UK first class post costs 90p and you are more or less guaranteed next day delivery, or the day after that at the latest,' Hyett explains. 'But in Italy it costs €1.80 and it definitely won't get there the next day. It might take three days if you are lucky or two weeks, it just seems to depend on how they are feeling! It's definitely frustrating and means we have stopped offering a next day delivery option on Italian eBay and Amazon.it because we just can't guarantee our customers will get the stuff when they want it. It's a real shame because that option is very popular in the UK and Germany where people will happily pay a bit extra to get fast service.'
Is the postal service the only difference in doing business in Italy and the UK? 'Be prepared for things to take longer in Italy,' Hyett advises. 'Although the process of buying the company, thanks to BEV's help, was very straightforward and fast, the ways of doing business are quite different. There is no sense of urgency as far as I can see, no feeling of satisfaction in completing all your tasks for the day and getting up to date with things.'
Ben Radomski of BEV is familiar with this problem. 'Sixty per cent of our enquiries each year are from foreigners and the business culture on their side is always at a faster pace than in Italy! BEV helps smooth the way because it's based on an Anglo-Saxon management structure.'
Hyett is ambivalent about the Italian attitude, however. 'It might be us that have things wrong,' he says with a laugh. 'Maybe we Brits and Germans are too focussed on efficiency and speed whereas the Italians do what needs to be done for the day and then finish work and focus on their families and friends. They seem to be able to switch off in a way we can't and who's to say they aren't right? It's still a bit baffling to me though. At the moment I go over to Italy once every three months or so. Maybe I just need to spend more time there!'