Moonpig signs seals and delivers

Moonpig is a very British success story but, as Nick Jenkins remarked in his talk to the Entrepreneurship Society last night, there were moments and plenty of them when the survival of the business was on a knife edge.

Nick enthralled a large and enthusiastic young audience last night with his tales of daring-do as a sugar trader in Russia (it was time for a swift exit when threatening letter appeared on his front door) and the story behind the birth, growth and development of Moonpig into the top UK online personalised greetings card company. Others may seek a slice of the action (Hallmark are rumoured to be entering the market) but Moonpig has a clear first mover advantage and a business model honed in the light of nearly a decade in the market.

I took a huge amount away from Nick's talk, not least the way in which the original business plan more or less survived the rough times. Essentially the business was established by printing and selling greetings cards which had a basic high added value and high margins, coupled with the need to hold relatively little stock and taking payment in advance from customers. The concept is scalable - in contrast to the time and cost of opening one greetings card store and then another and then another.

A turning point was reached when average selling prices rose and consumers turned out to be price insensitive i.e. the price elasticity of demand was low. Improvements to web site design, the power of word of mouth from satisfied buyers and well timed television adverts have been key to the take-off for sales and cash flow. The importance of consumer feedback was clear for all to see. As Nick remarked in answering questions, “Get the product right and your customers will do most of your work for you."

Moonpig now has 1.2 million customers and continues to enjoy rapid sales growth fulfilled by its twin operations in London and Guernsey.