Eternal bargain

Hey there, time traveller!
This article was published 01/11/2014 (4009 days ago), so information in it may no longer be current.

How much is that casket in the window? How much is that casket for sale?

“It’s $999.99,” says the shopkeeper, a florist named Leslie Borys.

Borys is standing in a building that once housed Kelekis, the iconic North End restaurant that for more than 70 years dished up cheeseburgers and skinny fries for generations of customers before closing down in January of 2013.

Rest in peace.

Ever since, the brick building near the corner of Main Street and Redwood Avenue sat empty. The signs came down.

But two months ago, Dimitri Lokhonia bought the space for his business, Bloomex, which since 2005 has sold flowers online across Canada out of eight locations. The company has prospered financially, with annual sales of $10 million, Lokhonia says.

The concept was simple: Take a product that had traditionally been sold at a high markup and sell it over the Internet for near-wholesale prices under a low-overhead model. Bloomex sells roses for as low as 49 cents each.

Naturally, a good chunk of Lokhonia’s business involved funeral homes. So he had another idea: Why not sell caskets and urns online — two other products that have traditionally been sold with high markups out of local funeral homes? That company is now called Sympathex.ca, offering caskets for $999.99 and urns for $99.99.

Lokhonia refers to his new Winnipeg outlet an “experiment.” Although caskets and urns are available online across the country, Winnipeg is so far Sympathex.ca’s only storefront location.

“At first, it was a little bit creepy,” Borys allowed. “But now I think it’s great. We’ve gotten noticed, that’s for sure. Lots of people are impressed with the price.”

So far, it’s working. Despite the fact the store has yet to officially open and has no signage, they’ve sold a handful of urns and one casket — ironically, to a funeral home (for $950), which in turn sold it to a customer for $1,800.

Prices for caskets in a funeral home setting can vary from the industry average of around $2,000 to more than $10,000 for deluxe models made of brass and wood.

Meanwhile, Borys toils away producing anywhere between 20 and 50 flower arrangements a day, as passersby often do a double-take with quizzical looks at the open casket displayed in the front window.

But it’s not just locals who’ve taken notice. The Funeral Board of Canada confirmed to the Free Press it has received “two or three calls from people in the (funeral) industry” questioning if Lokhonia’s business meets legal requirements. An inspector from the board was recently dispatched.

Short answer: Since Lokhonia’s business is not providing any funeral services, his venture is legit and not covered by the Funeral Directors and Embalmers Act.

However, a spokesman for the board said a funeral home has the right to refuse an outside casket based on concerns about safety or quality of construction. “But we would hope that rather than refusing the casket, the funeral home would offer to inspect the casket to ensure it was acceptable,” he said.

“The fees charged by a funeral home are not regulated by the funeral board, so they could charge a fee for using a casket purchased from another supplier,” the spokesman added. “However, all fees must be listed on a general price list (GPL) that must be provided upon request. So, if a customer asks for the price list and there is no fee listed for supplying your own casket, the fee cannot be charged.”

‘If it works in Winnipeg it will work anywhere’

— owner Dimitri Lokhonia

Of course, Lokhonia wasn’t surprised by push-back from the funeral industry.

“Obviously, it’s kind of stirring the pot,” Lokhonia said from his head office in Ottawa. “But we’re not saying funeral homes are ripping people off. I’m not pointing fingers. I’m just saying our cost structure is different. I’m able to sell cheaper.”

Bloomex is no stranger to controversy, however. The company’s online floral business has in the past been the subject of poor consumer-affairs reports in both CBC television program Marketplace and the Toronto Star. The Canadian Better Business Bureau continues to give Bloomex an “F” rating, the lowest possible, citing late delivery or unapproved product substitution.

Lokhonia claims many complaints against his business have originated from competitors.

As for caskets and urns, Lokhonia said he buys the same products from the same suppliers as many local funeral homes, imported from China. Yet he doesn’t have the same overhead as many funeral homes, such as chapels, kitchens or cremation ovens.

“This is how the Internet changes the industry,” he said. “Presently, when death happens, you usually go to the funeral home you trust or your family has used before. You don’t have time to shop around. You’re upset. It’s tough, but you do it.

“The Internet makes the process more transparent.”

Why Winnipeg? Because this is a diverse market of discerning shoppers who live in a city small enough to know their options, Lokhonia said, noting major retailers often test-drive products in Winnipeg. Remember the McRib?

“Winnipeg people are smart,” he said. “If it works in Winnipeg, it will work anywhere else.”

But Lokhonia isn’t alone in his belief selling caskets online has a future. He’s got company — big company.

In fact, retail giant Costco — which has been selling caskets and urns online in the U.S. — just began shipping into Ontario this summer. Prices online range from $1,299.99 to $1,599.99.

There are new Canadian online companies, too, including Casket Canada, based in Calgary, and the Toronto-based Casket Outlet.

“It’s a service, first and foremost,” said Craig McLaughlin, a partner in Casket Canada, which has been operating since February. “A lot of people out there can’t afford a nice casket. The price is a big factor to look elsewhere.”

Casket Canada’s website boasts savings of “50 to 75 per cent.”

Their caskets average between $1,500 and $1,700 and urns between $150 and $300. Delivery takes a week, but for an additional $250 to $400, a product can be shipped overnight, he said.

“We’re small and just starting out, but we think the business is there, the demand is there,” McLaughlin said. “I think people are just a lot more comfortable buying products online.”

However, McLaughlin concedes if Costco begins to offer shipping across Canada, not just limited to Ontario, “that could change the whole dynamic (of online casket sales). It could change the industry in general.”

Meanwhile, back in Winnipeg, Borys prepares flowers where Kelekis customers once sat around an old orange counter eating hotdogs. She does her invoicing where the burgers used to sizzle. “The grill is still (underneath),” she said, knocking on the countertop.

Then she checks on the urn boxes still left tucked against the wall and reports, “The boss (Lokhonia) is sending me 100 more.”

But are the prices of online caskets and urns to die for? That awaits to be seen.

Regardless, Lokhonia plans to continue his experiment in Winnipeg and, if successful, will branch out Sympathex.ca to his other locations, stretching from Halifax to Vancouver.

“I want to modify the business as it goes to make it happen,” he said. “I have a very simple principle. I follow the money. So far, it looks very promising for me.”

randy.turner@freepress.mb.ca