According to Farbod Shoraka, co-founder and CEO of BloomNation.com, the initial funding for his business came from poker winnings. So it’s not as surprising that the business, which allows customers to order hand-crafted floral arrangements directly from local artisans in major cities, took another risk by jumping on the Bitcoin bandwagon.
Shoraka said that the decision to accept the currency as payment has been a good one. BloomNation has found a niche with tech-savvy Internet people who have a need to send flowers. I asked Shoraka in an email whether it would bring a more global representation to the market, and he feels that it already has:
“It already does—we've been seeing people all around the world purchase floral arrangements on BloomNation.com, and because Bitcoin is an international currency, we're reaching even more people.”
In a previous blog post, I examined the pros and cons of using Bitcoin for payments to SMBs. I included a discussion about how the U.S. House committee on small business was considering recommending that SMBs use Bitcoin to grow their businesses. I wondered what role Bitcoin might take in the SMB market. Shoraka agrees with the proponents; he believes that the new currency could give a big boost to those SMBs who rely on ecommerce for business.
“While Bitcoin is focused primarily on online transactions, the growth of local commerce, especially with retail florists using the BloomNation platform, there is a clear opportunity for SMBs to capture a new audience of tech savvy customers by accepting the cryptic currency. As SMBs continue to make an effort to provide a proper e-commerce experience, Bitcoin will be an additional way for these businesses to attract more customers.”
I also questioned Shoraka about the stability of the currency and how processing is handled. He explained that the processing company they use helps ensure Bitcoin’s payment stability for BloomNation. Shoraka also feels that Bitcoin reduces online fraud:
“… [W]e use CoinBase, which immediately converts all of our Bitcoin purchases to U.S. dollars. Because of this, we're not susceptible to the fluctuations in price. [With Coinbase] we haven't had any issues using Bitcoin so we don't see why other companies shouldn't accept the currency, too. Accepting Bitcoin has only increased our sales… Because transactions are more secure compared to fraudulent credit card purchases across the web, it made sense for us to accept the virtual currency.”
Lastly, I asked Shoraka what he might want to share with SMBs who are considering accepting Bitcoin payments for online transactions. He responded with a favorable recommendation to other companies:
“We strongly advise other companies to accept Bitcoin—we've realized that having the option to pay in Bitcoin has opened up a whole new market for us. Although it is a niche market, businesses are getting [their] products in the hands of even more people. We even found that people who pay with Bitcoin tend to spend 50% more than those who pay with credit cards, so Bitcoin users are actually more romantic than credit card users.”