E-Commerce Case Studies: How Entrepreneurs Use the Internet in Their Business
By Beth E. Koch
Keeping Old-World Traditions Alive Via The Internet:
Baking Czechoslovakian Pastry
Ján Gadzo
Three years ago Ján Gadzo quit his job and turned over a new leaf. He began baking an old-world traditional Czechoslovakian treat called Potica (pronounced poe-tee-suh) that he’s introducing to a new generation of customers via the Internet.
“Three years ago I quit my job… and started to make the Potica, and its been a tremendous success! …I am an engineer by trade. I worked in the healthcare industry most of my life. Heating, Ventilation, and Energy Management was my specialty.” Gadzo says, “I love to bake.”
What in the world is a Potica?
Walnut Potica is the specialty of Andrej’s European Pastry. It is a generations-old pastry recipe. It consists of flaky pastry dough rolled out and covered in a thick layer of sweet walnut filling which is then rolled into a log and baked golden brown. Other Eastern European countries have dubbed it the “Nut Roll” or have substituted other ingredients for the nuts, like poppy seed filling for instance.
Potica is not a common item in most stores, rather, it is a tradition handed down—a pastry prepared by hand, the old fashioned way. Generally, fewer and fewer people are making the pastry treat since people find themselves with so little time for baking in today’s fast-paced world. Gadzo adds that more and more, “the Grandmas are dying.” And he is helping keep the tradition alive.
Bakeries are plentiful in the Twin Cities, but where can you buy a pastry online? At Andrej’s place. Gadzo bakes the perfect pastry in Chisolm, Minnesota and delivers it fresh to Byerly’s and Lund’s grocery stores. You can pick up a fresh roll at the Byerly’s on Suburban Avenue for $8.99. “This is a high-class product,” adds Gadzo.
Beginning in October and straight through the winter holidays, Andrej’s European Pastry cranks out the Potica and serves it up to home-shoppers via the Internet. One of the big ways that Gadzo uses the Internet in the business is to collect orders from customers. He doesn’t accept credit cards, which eliminates a number of problems and keeps the delivery side smooth and easy. “You see people email me, I ship the Poticas out, and I put the invoice in the box. So this way I eliminate the problem of if they didn’t receive the order and I don’t have to go and chase it.” Everyone wonders how Gadzo can stay in business without getting payment up front, but he says it is easier to trust your customers and no one has ever taken advantage of him yet. And those customers keep coming back for more Potica.
Ján Gadzo likes using the Internet to stay in contact with customers and to answer their questions. He says, “When I get to work in the morning… I can check my email and fill out the letters and everything else and it doesn’t take the time away from me during the working hours. It is so much easier when the customers email to you. And now when they call or whatever I say, please email me its much easier for me to use the Internet than to be standing on the phone. See, when I am working during the day and I have to make Potica.”
In order to make the Potica, Gadzo uses the Internet to find the best prices on ingredients, locate similar businesses that he can affiliate with, and research the competition. “When I am doing the research and looking for the different people throughout the country who offer the same product as I am…I look them up so I can see what my competition is doing.” How many people are producing Potica? “There are a dozen or two dozen people that are trying to do something. But, at the present time, I am the best in America! …Have you tried our product?” Knowing your competition is a key to longevity in business.
Gadzo named his business Andrej’s European Pastry after his father and his son. Taking a traditional product to the Internet has been a unique challenge. Gadzo says, “My son and I communicate by email when we need to get new customers, so he’s also working for me while he goes to school. So he picks up my email, or he answers letters—see,” Gadzo chuckles, “he’s a little bit better in the English department than his father.”
The Internet has changed the way people do business—especially in rural Minnesota. How has the Internet changed Ján Gadzo’s way of doing business? “For the better. One hundred percent. And I wish that I had a little bit better computer. Cause right now I just have like a four year old computer. …And also the printer and everything else. But I’m looking to upgrade after this season, so I can hook up a lot more size than I have right now.” Staying current with computing power can be a drain on a small business cash flow. And finding the right combination of service providers with a balance of connection speed and reliability has been a challenge for some rurally-located businesses too. “The (connection speed) over here is not exactly what you guys have in the Cities.”
But Andrej’s European Pastry is reaching out beyond the borders of its hometown in Chisolm to retail shoppers in neighboring states, as well as internet shoppers worldwide.
“See the people who are familiar with this product still know it under the Potica,” Gadzo explains, “but when I’m reaching the Chicago market, over there it is known under Nut Roll, and also the Slovak community know it more under the Nut Roll than Potica, see? So this is what I am trying to change my web site to cover the different people and tell them, ok, go and look for the Nut Roll. But if you punch in w-w-w and Walnut Potica, we come right up.”
Gadzo has built a strong regional distribution base for Walnut Potica and he’s busy pulling together new alliances to further strengthen the company. One of the simplest techniques for attracting new customers to a web site is to exchange links with a company who has a similar (but different) product or service. “Right now, I am with another company that makes bread in Elk River, Diamond City Bread. We put down the web sites—so now he is on my (web site) and I am on his.”
A different way to affiliate is by listing your product or service on other retail sites, like Amazon.com. “I just read about that in a paper that most of the big companies are looking over Amazon.com and they are offering their product on Amazon.com.”
With Success Come Challenges
Instead of spreading out to the four corners of the globe, keeping distribution local is one way to keep costs contained and growth manageable. “Last summer I and Miriam my wife, we just traveled Minnesota, and we said, “Ok, (in the) metro area we have 3 million people... so I said why do I have to go out of Minnesota, when I can sell enough Potica in metro area?””
And that’s where Gadzo has one word of advice for other business owners: “Be careful who you go with. You know you can spend $3,000 $5,000 $10,000 on Internet service—which you have to look over here, what am I going to get back from them? So what I did is, we put up our web site…that was through AMMS, they (helped with the expenses) because this is part of Minnesota Business. They did a tremendous job.”
He also suggests that you surround yourself with people who can help you. When you become successful, people want to ride on your success. “I’ve been trying to reach the metro area a little bit more and I had a company that was trying to offer me some kind of media relations. They wanted $5,000 you know? (How do I know if that is reasonable?) You see, what happens when you start to (be successful) is that all of a sudden you cannot see the forest for the trees. (Anyway,) $5,000 is a lot of Potica, you know?” And savvy entrepreneurs like Jan Gadzo can (and usually do) check their resources using their primary business tool--the Internet.