A Blossoming Business

Summer and Carlos Campos’ Hawaiian Lei Co. brings high-tech efficiency and outreach to the delicate and labor-intensive lei making business.

 

The Hawaiian Lei Co., which went live in April 2005, was supposed to be a quiet little e-commerce business that stay-at-home mom Summer Campos could operate in her “spare” time. In other words, when her two young daughters were asleep. It may seem naive to think that a young mother could single-handedly send freshly made lei across the country and throughout the world, all from the comfort of her Hawaii Kai home office, during her kids’ naps and bedtimes.

But this is the Age of the Internet. And Summer, an accountant, and her husband, Carlos, a former executive at an information management company, had done their homework, spending nearly eight months studying the market and their products. The couple had conducted some serious research and development on preserving and packaging lei, creating a state-of-the-art inventory control system for their flowers and sweating out all the fine details of a comprehensive but user-friendly Web site for their original product line of 150 different lei. They also spent generously on an Internet marketing campaign.

When their business opened its virtual doors, nearly everything at the Hawaiian Lei Co. (www.hawaiianleicompany.com) was outsourced, controlled by Summer and her home computer.

“We got six orders in the first week, and I was ecstatic, jumping up and down on my chair,” says Summer. “Then in the second week, it increased to 12 orders and then 18 the next. We thought, wow, this is awesome! Then all of a sudden, we were getting 10 orders a day. Then it was: ‘Uh-oh, now what?’”

Summer points out that a single order almost always contains multiple items, so a 100-order week could involve shipping out more than 800 lei. In its second month in business, The Hawaiian Lei Co. received 488 orders. Summer was spending a full day just updating inventory, ensuring the delivery of fresh flowers every morning to her lei-making vendors. While first appreciative of the extra business, the vendors were getting swamped. The Campos’ virtual business was getting real.

“By the third week in May, I said: ‘Honey, I can’t keep up. You [Carlos] have to quit your job,’” says Summer. “We were turning away orders!”

At the end of the month, Carlos gave notice.

Smelling the Roses

It’s ironic that the high-stress high-stakes business world the Camposes suddenly found themselves in was exactly the one they had left behind nearly two years earlier. The couple had been living in San Diego, both with careers on the rise. Carlos was the director of product planning and assurance for a high-tech government contractor. Summer was the personal accountant for the president of the company. In their early 30s, the Camposes were financially set.

Lei of the Land: Summer and Carlos Campos' Hawaiian Lei Company began as a small Internet business run out of their Hawaii Kai home office. Today, the couple's lei makers can’t string fast enough and their suppliers can't grow flowers fast enough to keep up with demand.

But Carlos was traveling constantly, logging more than 100,000 air miles a year, and shortly after Summer gave birth to the couple’s first child, Madison, he realized that his daughter would be growing up with few friends and no extended family.

“We were so focused on work, work, work. But once you have kids, your focus shifts,” says Carlos. “We didn’t want our lifestyle to be the one that our daughter grew up in. I’m from Las Cruces, New Mexico, which is smaller but very similar to Honolulu. It’s a place where everyone knows everyone, and they still like each other.”

In late 2003, the Campos packed up and headed to Hawaii, where Summer had been born and raised and where most of her extended family still resided. The young family spent Christmas at Disneyland before landing in Honolulu without a single job prospect. But the Camposes had saved up a comfortable nest egg. They also had sterling resumés and heads full of ideas.

Shortly after arriving, the couple was approached with an offer to purchase one of Chinatown’s flourishing lei shops. The flower business was an unknown entity to the Camposes, who were more familiar with boardrooms than workrooms. But Summer remembered trying to purchase a lei for a friend who was running a marathon in San Diego several years before. After calling all over the city, she was finally able to convince a florist to make a simple carnation lei for $50. It wasn’t a work of art.

The couple reasoned that there was a vast untapped market for Hawaiian flower lei, one that stretched far beyond Chinatown’s Maunakea Street. There were a number of Web sites selling lei, but Carlos believed they sorely lacked selection and a comfortable customer interface. With their high-tech business backgrounds, the husband-and-wife team began brainstorming how they could bring Internet-era efficiencies and outreach to the lei making business.

So when the deal for the lei shop fell through, the couple was disappointed but undeterred. Having a brick-and-mortar flower business hardly seemed relevant anymore. Carlos got a job with a local computer company, and he and Summer continued to plan their Internet business. They incorporated The Hawaiian Lei Co. in October 2004.

The Lei of the Land

Carlos knew that selling lei on the Internet wouldn’t be an easy task. It would take a considerable leap of faith for people to purchase delicate flower lei produced thousands of miles away. Furthermore, convincing them to come back again and again to his Web site would be essential to the business’ success. Birthdays, graduations, anniversaries and holidays were lifelong events. He believed that the key would be to make the transaction as easy and comfortable as possible. Maybe more important, every part of the process, from selection to purchase to fulfillment, would need to build confidence and trust with the customer.

Of course, nothing pleases a buyer — and builds confidence and trust — more than a quality product. So Summer and Carlos experimented with ways to preserve and store their flowers. But after many hours and considerable expense, they concluded that there was no substitute for fresh flowers. (The Hawaiian Lei Co. only ships lei made of flowers picked that morning.) Superior packaging was also essential, so the couple designed special packaging that would protect and preserve their product while in transit. In addition, the couple decided to wrap each lei in its own plastic bag, even though it would be more economical to bundle them together. Confidence and trust.

Although Carlos had the expertise to build his own Web site, he hired a contractor who created an easy-to-navigate interface with plenty of vivid images and detailed descriptions written by Summer.

The Campos’ lei vary in price from $14 for three strands of pikake to $68 for a maile and orchid lei. The company will guarantee next-day delivery to western Canada and locations on the continental U.S. as far east as Phoenix, Ariz. Lei sent to the East Coast takes two days for delivery.

“She worried about the product, and I worried about the process,” says Carlos. “We spend a ton of money on boxes and insulation. It takes us about 15 minutes to build each box and line it. But it’s all worth it, because not only does it protect the lei, but when someone gets something that well packed there is a perceived value. We aren’t looking for the onetime customer; we are looking for a lifelong relationship.”

Perhaps the company’s most important innovation is its flower-inventory tracking system. Once the couple realized that they would be dealing exclusively with fresh-picked flowers, they knew that accurate and efficient ordering was essential. They determined the exact number of blossoms each one of their more than 150 lei required and then entered that data into a proprietary system designed by Carlos. He says the technology is hardly groundbreaking. But its application to day-to-day business is eye opening. As Summer processes the company’s orders, the next day’s flower requests are automatically updated precisely, right down to the individual blossom.

“Knowing exactly how many flowers to order on the exact day eliminates waste,” says Summer. “We can’t afford to have an order of flowers sitting on the table, since we can’t use them for another day.”

A Flowering Business

In October 2005, after a little more than six months in business, The Hawaiian Lei Co. began reeling in much of its outsourced operations. First, the Camposes relieved their vendors of their packing and shipping duties, moving those processes into Summer’s parents’ garage. Six months later, the couple hired four lei makers of their own and again moved operations, this time to their Hawaii Kai home.

Flower House: (above): The Hawaiian Lei Co.'s new Kapiolani storefront has given staff more work areas to assemble more than 400 different items. (below): However, space still becomes a premium as a shipping deadline looms.

“We had to take control of fulfilling our own orders and control the quality of our product. We were just turning away too many orders and were missing out on a big opportunity,” says Summer. “But it was also very idyllic being at home. The ladies would sit around the pool sewing lei. Our garage had refrigerators filled with flowers and everything smelled wonderful.”

Last March, The Hawaiian Lei Co. relocated to a 2,000-square-foot storefront along busy and visible Kapiolani Boulevard. The space has enough room for a small sales floor to accommodate walk-up traffic as well as workrooms for flower storage, packing and lei making. The company’s staff has grown to 10, and the selection of lei and other products has nearly tripled to more than 400 items. There is even a display room, where customers can view the lei makers at work.

With the new storefront, the Camposes have finally got their flower shop and are now able to service the local market. But just as they did with their online business, they are selecting their new markets carefully, targeting computer savvy customers who don’t have enough time to drive by Chinatown or other neighborhood florists. With a few clicks of a mouse, The Hawaiian Lei Co. can make a day-of delivery at the office or home.

But their Mainland market continues to grow by leaps and bounds, continually challenging the couple’s ability to stock supplies and meet demand. Last Mother’s Day weekend, the Camposes had to shut down their Web site for two days. They didn’t have enough flowers or lei makers.

“Once your product is out there, things just build and build,” says Carlos. “That’s the power of the Internet and the power of word-of-mouth.”

According to Carlos, in its first year of business, The Hawaiian Lei Co. processed approximately 1,900 orders. In 2006, that number more than doubled to 4,500, and in 2007 he forecasts growth to be another 147 percent and hopes to hit $2.5 million in gross sales. He admits that the prediction is on the conservative side, not fully taking into account the impact that a bricks-and-mortar shop will have on sales.

The business isn’t the only thing growing. Last April, Summer gave birth to a baby boy, the couple’s third child. The new arrival has complicated the family’s schedule even more, but mom and dad haven’t forgotten the life lessons they learned several years ago in San Diego.

“We have a policy here that after the kids get out of school, it’s their time till they go to sleep,” says Summer. “After that, we’re back to work, processing orders.”

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