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    MexGrocer.Com sells nostalgia, Mexican style

    By Michael Goodwin | Yahoo Small Business

    Ignacio Hernandez Jr. (affectionately known as "Nacho" to his friends and associates) has Mexican food in his DNA.

    Nearly 100 years ago, Nacho's great grandfather, Don Ignacio Hernandez Del Castillo, started the family business, Herdez, which grew to become the leading food processor in Mexico with brands such as Herdez, Doña Maria, Bufalo and a partnership with McCormick. ("Well, we always had food in the pantry for sure!" Nacho laughs.)

    In 2000, Nacho—now an internationally respected ecommerce guru and a fourth-generation food vendor—partnered with his father to take the family business online. The father-son team started the San Diego-based MexGrocer.com, currently the world's largest online grocery store for authentic, hard-to-find Mexican food, household products, cookbooks, religious goods, and jewelry from Mexico.

    Among other things, it's a classic Yahoo Store success story.

     

    No Drones

    MexGrocer.com is a bilingual site that offers more than 2,500 Mexican products from leading imported and national food brands. With over 200,000 customers, it ships to 15,000 cities in 50 states of the U.S. Nacho, co-founder and Senior Vice President of MexGrocer, brings his international e-commerce experience to the family team. He's also a regular speaker at Search Engine Strategies Conference & Expo, and a Search Engine Marketing and Internet Strategy consultant for many Hispanic businesses.

    Back in 1999, while studying for his MBA at IPADE business school, Nacho spent a summer interning at a Swiss ecommerce company called LeShop. "It was an amazing learning experience for me," he remembers, "to be working in an online grocery store. It wasn't at all theoretical."

    In his second year of the MBA program Nacho leveraged what he had learned in Switzerland and partnered with his father to start MexGrocer. "We worked on the business plan together," he says, "and while I was finishing my MBA in Mexico he was in the U.S. preparing relationships with a distributor to setup the supply and logistics part of the business. We partnered with a shipping carrier to do all the fulfillment. We couldn't afford to buy WebVan’s expensive delivery trucks. Those things cost $150,000 each! No drones either."

    In fact, MexGrocer's start-up was as frugal as the Hernandez' could make it. There were only three employees: Hernandez Sr., Hernandez Jr., and an office manager. Nacho focused on web site design, marketing, and customer service.

     

    We Sell Nostalgia

    They must have been doing something right, because by 2005 MexGrocer was in the black. Selling the right products helped a lot.

    "For the most part," Nacho says, "we sell nostalgia. Imagine a Hispanic or even a non-Hispanic customer that became familiar with a product when he or she was living in Texas or California, or maybe when she traveled to Mexico, and now she's living in a remote location where the supermarket just doesn't carry this stuff. When she looks at the site she goes, 'Wow! Finally I know where I can get this.'"

    Nostalgic or not, the product listings on the MexGrocer site are muy enciclopédico. Mexican candy, hot sauce, mole, chile peppers, rice, beans, herbs, spices, tortillas, tamales, cheese, bread, chips, cooking utensils, home remedies, jewelry… "For Mexican food items we have the largest assortment of products in the world," Nacho boasts. "We carry over 2500 different SKUs, and we're adding new ones every year."

    Not all of MexGrocer's products are imported. "There's a lot of well-established Mexican food brands that are produced and distributed in the U.S.," Nacho explains. "Good examples of that would be Juanita's Foods and Pico Pica Hot Sauce. But we identify the authentic Mexican food brands."

    By 2010 MexGrocer had become the biggest online site for Mexican food products in the world. "Even compared to the Amazon marketplace we're still the largest player," says Nacho. "The hardest part is sourcing the products. Sometimes these items become hard to find even from the largest distributors. We have to bring many of the authentic brands from Mexico so it becomes quite hard logistically. Still, we try to maintain a good stock of everything."

     

    Put Everything Into Yahoo

    Every start-up makes a few mistakes. One of the biggest mistakes Nacho made was not starting out on the Yahoo platform. That was a mistake he corrected in a hurry.

    "Our first attempts to build an ecommerce platform were completely custom-designed," he explains. "We thought we knew what we were doing. But the site was full of bugs, and there were constant challenges. It would go down all the time…and in the end it just cost too much money to maintain.

    "Then a friend of mine, who had been very successful in ecommerce, told me, 'Well, why don't you go on the Yahoo Store platform? It only costs a few dollars a month, and it's much more stable…'"

    It was love at first site. Or second site. In any case, starting from there MexGrocer began building and rebuilding and improving itself on the Yahoo Store platform. "It's been a constant for us for over 13 years," Nacho says. "We're extremely happy with Yahoo. It has the flexibility for us to do everything we want, and at the same time it has the most powerful back-end infrastructure so we don't need to rely on our own servers, or worry about maintenance."

     

    Survival Business

    The acid test came in 2010, when there was a concerted online attack on the MexGrocer site. "If not for Yahoo's backing we would not have survived," says Nacho. "The attackers could have taken our business down for many, many days and it would have been impossible to recover from that loss. Yahoo had us back up in a matter of hours. Something like that is invaluable. Yahoo has been a great partner."

    The other fine thing about Yahoo, Nacho points out, is its cloud of consultants.

    "Most of the site's design has been influenced by me," he says, "because I really like doing it, but I don't do anything on the programming side. That's one of the really nice things about the Yahoo Store, it's got a network of developers—and we've worked with almost all of them. One is focused on MyAccount so customers can log in. Another partner specializes on product search. We have another partner that helps us with our marketing feeds. And all these partners come together through Yahoo Store, which is a really great thing about Yahoo. You're not limited to working with just one developer group."

     

    Not Just Taco Shells and Shredded Beef

    The three best-selling categories on MexGrocer are hot sauces, salsa, and Mexican candy. In the candy department, you can satisfy your sweet tooth on everything from chocolate to spicy lollipops. Nacho's favorite treat is chocolate-covered mazapan. (North Americans call it marzipan.) "Mazapan is quite traditional," he laughs, "and has been popular for many years, but they just came up with a chocolate-covered version that I like very much."

    MexGrocer has been so successful selling Mexican products to Hispanic customers, that Nacho and his father have been thinking about adding new categories. "I'm not sure if that will be with MexGrocer.com or a new brand," Nacho says, "but it's a natural flow. We've looked into adding more gourmet items. Mexican food is not just taco shells and shredded beef, it's authentic dishes and great cooking. People might want to try cooking with corn truffles, or fish seasoned with pasilla paste for the famous recipes “a la talla” or “a la Veracruzana”… We've tried selling religious items too, and those do well, especially with Hispanics. We've even tried to sell gold and silver from Mexico. But that's a difficult one, and then you have to ask yourself if you're a grocery store or a jewelry store."

    Either way, after almost 100 years, Ignacio Hernandez Jr. is proud to be bringing the family business into its second century.

    Yahoo Small Business Services