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MythOfSisyphus

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Great update!
Wow, if your doing 195k in average month currently, then your November/December monthly sales will likely be way beyond 200k, probably closer to 250k than 200k per month.
FU money edging closer and closer.

Really inspiring thread, had to read it all over again just now.
Thumbs up!!
Thanks.

Growth seems to have slowed a little this year (to be expected at the 4 year mark) so 250k might be a stretch but it's definitely possible based on the kind of jumps around November in previous years.
 

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terrhuan

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You are an inspiration. Wishing you all the best. I'm beginning on the R&D of my own product right now, and hope I'll have some results to share in the not too distant future.
 

ChrisJHarrington

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What got you into the salon business to start out? Curious how you identified the need. Was it an industry you were familiar with, or you somehow stumbled across it/the need for what you're doing?

Keep it up!
 

Minuz

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Its Really really inspiring reading your story!! Congratulations and thanks for taking the time to share with us! Go for more and keep updating if you can. Thanks
 
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MythOfSisyphus

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What got you into the salon business to start out? Curious how you identified the need. Was it an industry you were familiar with, or you somehow stumbled across it/the need for what you're doing?

Keep it up!

Basically I'd been dabbling in online businesses for several years but took the plunge into this particular one because my wife is a beautician and knew the products pretty well. I looked at the competition that was around, spoke to a few suppliers and saw an opportunity to get into the market.

I explain everything in a fair bit of detail in this thread if you're interested
 

MythOfSisyphus

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Quick Revenue Update:

While our annual revenue is higher than last year (we're looking at hitting around 2.27m in revenue vs 1.76m last year) we haven't seen the kind of late year explosion in revenue we have previously.

This November was our biggest month ever at 210k but still only around 10k more than November 2018.

I can't be 100% certain for the decrease in growth but I think it can be attributed to at least a few of the below:

1) Maturity - The business is now in the start of it's 5th year and the kind of growth we were experiencing in the first 3-4 years (basically doubling revenue every year) was always unsustainable

2) Increased competition - New competitors keep popping up every month it seems and there are now around 20 well established Australian eCommerce stores in our niche.

3) Lack of expansion - The delay in our warehouse being built (almost 1 year past schedule) really killed expansion into new products. While we did delve into several new products there are plenty more that I simply couldn't explore due to a lack of floor space. If I had my time over again I probably would have just purchased or rented somewhere that was already built and ready to go.

Anyway... 2020 I would really like to put a focus on expanding into new products and boost monthly revenue to 250-300k. And I'll consider going back to doing monthly updates in this thread again to give myself a bit of added incentive.
 
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Genius01

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Quick Revenue Update:

While our annual revenue is higher than last year (we're looking at hitting around 2.27m in revenue vs 1.76m last year) we haven't seen the kind of late year explosion in revenue we have previously.

This November was our biggest month every at 210k but still only around 10k more than November 2018.

I can't be 100% certain for the decrease in growth but I think it can be attributed to at least a few of the below:

1) Maturity - The business is now in the start of it's 5th year and the kind of growth we were experiencing in the first 3-4 years (basically doubling revenue every year) was always unsustainable

2) Increased competition - New competitors keep popping up every month it seems and there are now around 20 well established Australian eCommerce stores in our niche.

3) Lack of expansion - The delay in our warehouse being built (almost 1 year past schedule) really killed expansion into new products. While we did delve into several new products there are plenty more that I simply couldn't explore due to a lack of floor space. If I had my time over again I probably would have just purchased or rented somewhere that was already built and ready to go.

Anyway... 2020 I would really like to put a focus on expanding into new products and boost monthly revenue to 250-300k. And I'll consider going back to doing monthly updates in this thread again to give myself a bit of added incentive.
Thanks for the update.
You're still crushing it.
And yes, monthly updates would be fantastic.
 

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MythOfSisyphus

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Just thought I'd do a quick update for anyone who's interested in how the current situation is impacting the business.

Basically all of our customers (we're B2B) businesses should be closed with very few exceptions so I expected revenue to drop dramatically but at the moment we're only down about 30% over the last month.

We've seen a big shift in the type of products we're selling with many new customers purchasing training related and use at home products.

This sudden shift has meant that we're under-stocked for many products and overstocked for others. This hasn't been a major issue with most of our suppliers in China and Korea still able fulfill our purchase orders quickly.

My 2 staff are still working the same hours but I am finding additional tasks for them to keep them busy and ensure their lives aren't impacted too much by the current situation. One of them is now on more money than she was previously due to Australian government subsidies for business impacted by COVID-19.

I'm running the business from home 95% of the time while also home schooling my 8 year old son which has been a challenge so far.

I've cut back costs where I can but unfortunately most of our overheads aren't able to be scaled down with the fall in business.

Given how many businesses have already been ruined and how many jobs have been lost so far I can't complain at all. We're still turning a tidy profit and things should recover well once the restrictions in Australia are lifted.
 

Genius01

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Just thought I'd do a quick update for anyone who's interested in how the current situation is impacting the business.

Basically all of our customers (we're B2B) businesses should be closed with very few exceptions so I expected revenue to drop dramatically but at the moment we're only down about 30% over the last month.

We've seen a big shift in the type of products we're selling with many new customers purchasing training related and use at home products.

This sudden shift has meant that we're under-stocked for many products and overstocked for others. This hasn't been a major issue with most of our suppliers in China and Korea still able fulfill our purchase orders quickly.

My 2 staff are still working the same hours but I am finding additional tasks for them to keep them busy and ensure their lives aren't impacted too much by the current situation. One of them is now on more money than she was previously due to Australian government subsidies for business impacted by COVID-19.

I'm running the business from home 95% of the time while also home schooling my 8 year old son which has been a challenge so far.

I've cut back costs where I can but unfortunately most of our overheads aren't able to be scaled down with the fall in business.

Given how many businesses have already been ruined and how many jobs have been lost so far I can't complain at all. We're still turning a tidy profit and things should recover well once the restrictions in Australia are lifted.
Congrats.
Illustrates the power of an online business/online sales channels over traditional stores.

How are you managing to deliver the products? (Since I believe, hair care products are not classified as essential products).
Are there increased costs associated with ensuring deliveries get to your customers?
Or your delivery process has been uninterrupted so far....if so, how come?
 

MythOfSisyphus

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Congrats.
Illustrates the power of an online business/online sales channels over traditional stores.

How are you managing to deliver the products? (Since I believe, hair care products are not classified as essential products).
Are there increased costs associated with ensuring deliveries get to your customers?
Or your delivery process has been uninterrupted so far....if so, how come?

While we're definitely not an essential service we're an online only retailer so still permitted to operate as usual with the necessary precautions.

We use the national postal service for deliveries. They're experiencing some delays but most orders we send are still arriving within a few days. International orders ( only a tiny percentage of our business) are experiencing huge delays.
 

Genius01

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While we're definitely not an essential service we're an online only retailer so still permitted to operate as usual with the necessary precautions.

We use the national postal service for deliveries. They're experiencing some delays but most orders we send are still arriving within a few days. International orders ( only a tiny percentage of our business) are experiencing huge delays.
Oh great.
Happy for you.
More power to you as you navigate the murky waters of this Covid19 business season.
 

wanttogofaster

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Question: I know it depends on the product, margin, etc, but just to get an idea.
I think I read somewhere on the thread that your avg product cost is about $5 and your average sale price is $20.
Do you have about 50K on inventory?
If not, assuming a $5 product that sells like hot cakes, how much inventory should I keep to be able to sell 200K a month?
 

MythOfSisyphus

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Question: I know it depends on the product, margin, etc, but just to get an idea.
I think I read somewhere on the thread that your avg product cost is about $5 and your average sale price is $20.
Do you have about 50K on inventory?
If not, assuming a $5 product that sells like hot cakes, how much inventory should I keep to be able to sell 200K a month?

Very good question. It depends on a few different factors. For instance...

- How many products you stock
- What the lead time and shipping times are for each product
- Whether or not your business is based on repeat buyers (being out of stock will be seen as an inconvenience that may cause a regular customer to look elsewhere)
- Likelihood of the products arriving damaged or not as described
- Your suppliers minimum order quantities
- Seasonal demand

Our business is built on repeat buyers so we like to make sure we always have what they need in stock. We now have around 800 SKUs which means that staying in stock for each product can be complicated so we use software that predicts future sales based on previous sales data. As a rule we like to have around 3 months worth of stock on hand for every SKU (some more, some less).

At any one time we'll have around 200k to 300k worth of stock (purchase value, not retail value) on hand. This gives us plenty of time to resolve issues with shipping delays, product faults, sudden increases in demand. These things are all part of importing and do occur frequently.

If you were only stocking a handful of products and lead time was only 30-40 days then you could definitely hold far less stock than we do and achieve a similar revenue each month. 50k would be around the minimum for 200k revenue a month though I would think.
 
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MythOfSisyphus

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May as well provide a quick update while I'm here...

Sales this year have continued to be impacted by covid-19 with many of our customers forced to close their doors.

During June and July while businesses throughout the country were operating as normal we had our 2 biggest months ever and even hit 260k revenue in July. Unfortunately it's difficult to gauge exactly what a normal month would look like now. I would guess however that we'd probably be somewhere around the 220-230k a month mark if covid was not an issue. We're currently around the 180k per month mark which is pretty good considering.

My biggest challenge has been staying motivated without seeing any real growth outside of June/July.
 

MHP368

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Skimmed through the thread, question; can you walk us through your marketing as it stands from beginning to sale?
 

wanttogofaster

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Very good question. It depends on a few different factors. For instance...

Thank you! I'm nowhere near that number of SKUs, but I've definitely seen an increase in sales as I grow my business/stock.

I think your numbers are great even during the pandemic! I also had my best month ever last month, but I'm still in the 4 figures range, hoping to reach 5 figures soon!
 

MythOfSisyphus

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Thank you! I'm nowhere near that number of SKUs, but I've definitely seen an increase in sales as I grow my business/stock.

I think your numbers are great even during the pandemic! I also had my best month ever last month, but I'm still in the 4 figures range, hoping to reach 5 figures soon!

Thanks. That's great to hear. If you're doing 4 figures already then 5 is easily achievable.

Do you have a progress thread?

EDIT: Regarding our number of SKUs... a large percentage of those are variants of about 10 different products. Our actual product count is only around 130 at the moment just to avoid any confusion.
 

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MythOfSisyphus

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Skimmed through the thread, question; can you walk us through your marketing as it stands from beginning to sale?

Sure. All of our current marketing efforts are online... The majority of new customers come from search (both paid and SEO). We invest pretty heavily in adwords (around 15-20k per month) and also run paid facebook ads (around 1k to 2k per month).

We see a much larger return on adwords as it can be quite difficult to target business owners on facebook so there's a lot of wasted ad spend. Our best results on Facebook are from our retargeting campaigns (as we have a lot of repeat buyers).

As far as social media goes instagram is the most popular platform in our niche and we currently outsource to an agency to put together 3 posts a week for us, however I will be looking at hiring a contractor from upwork instead as I'm finding I'm still having to micromanage the agency and edit many of the posts. Social media has been an ongoing struggle.

We also use mailchimp (I'd love to migrate to Klaviyo) to market to our customers. Anyone who signs up to our list will receive a series of around 5 emails intended to introduce them to our full range of products and to get them back to the website. We also have campaigns for abandoned carts, customer loyalty rewards, and lapsed customer offers.

That's basically it off the top of my head.
 

ryandoak

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I’m starting this thread to document my journey from “good money” (you can read my intro story here) to FU money.

I aim to do this in the next 5 years by getting my online salon supply business to the stage where it’s profiting 7 figures a year and then hopefully selling it for several million. I’ll then have enough money invested to live comfortably off interest and investments for the rest of my days. Or at least that’s my plan. Let’s see what happens.

I’m documenting this for a few reasons...

First of all I hope that sharing my successes and failures will be of some value to you on your own journey.

Secondly I see it as a way of holding my self more accountable to my goals. Not that I think I’ll slack off or give up, but I this will add some extra motivation for me in hitting my milestones.

Thirdly, because while I’m confident in what I’m doing , it never hurts to get a fresh point of view. Hopefully your feedback can help me see things I might be missing.

And lastly, all I seem to do lately is work on the business and learn about business. This thread will give me a much needed creative outlet.

I’ve decided that I won’t be giving away any major details about my business apart from what I’ve already stated in my intro thread but I will try and be transparent as possible regarding what I’m doing and my progress toward the financial targets I’ve set.

Goal for 2018: $1,750,000 in revenue
I aim to make $1,750,000 in revenue (a figure more than double what I made last year) and I’ll start setting financial targets to hit each month in order to get there.


Monthly totals so far:

January: $101,992

February: $103,041

March: $50,689 (At the halfway point)


Considering I need to average $145,000 every month to hit my goal I’m a long way behind where I need to be. But while the start has been slow, I think if I put in the hard work now, I will see my efforts start to pay off in the back half of the year.


I’ll set my goal for March at 108k which would be a good result considering my position at the halfway mark.

The goal for April will be 118k and if I can grow revenue at around 10k per month thereafter I might be able to hit the annual target by years end. It’s an unlikely goal, but why not shoot for the moon?


How I plan to grow revenue:

1. Hire & Outsource
– Until 2 weeks ago I was handling everything on my own. I have since hired someone part time to assist with packing & shipping which will free me up to spend more time growing the business. I’ll also be looking for other opportunities to outsource work to VA’s and other contractors.


2. Expand the product line – I’m currently talking to 2 new suppliers in China after ordering samples of some new beauty products and am about to put in large orders with both of them for variants of some products we already stock that have been extremely popular. I’ve also just started stocking some new aftercare products (products that the salons we supply can retail to their customers) and so far they’ve generated around a thoursand dollars worth of sales within the first week or so.



3. Improve marketing campaigns – I’ve been spending around 5k per month on advertising on adwords and facebook but haven’t put in the time and effort required to really test and tweak the campaigns. I spent my nights over the past 2 weeks doing an online adwords certification and completely overhauled the old campaigns and set up some new ones. They’ll need time to settle but once they do I’ll continue to tweak and adjust to get a better ROI which will mean I can increase the overall marketing budget and generate more traffic and more revenue.


4. Increase Social Media Presence – This has probably been the most neglected area of my business. I keep meaning to post more regularly but always seem to find other things to work on instead. I think this is partly because as a guy selling beauty products, marketing them doesn’t come naturally to me and I’m not an avid social media user outside of work either. Having said that, Instagram is huge in my niche and other brands are taking advantage so I need to step up my game here. I did try to outsource the social media work by advertising on upwork however I couldn’t find anyone with knowhow in both B2B and the beauty industry.



5. A heap of other stuff - I use Trello to track all my various to do lists and I probably have well over 100 changes planned for the business from website tweaks to improving my email campaigns to improving ad copy. Basically anything that will 1) Increase traffic, 2) Increase conversions, 3) Increase order value. These are the things that will grow revenue.


So that’s my first post done. I’m not sure how often I’ll be providing updates. I’ll at least do a run down for the end of each month documenting how I measured up against the financial goals and what changes I made. What went wrong, what went right. I’ll also try and provide updates and answer any questions each week as well.


The plan is to keep coming back to this thread and setting new goals each year, all the way through until I make that sweet FU money and drive off into the sunset in my new lambo.
I love the title of this thread. XD
 

GravyBoat

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Subbed. Amazing content in here.

@MythOfSisyphus how does your product development process (new products and new SKUs) work with your factories? Do you hire out development, or do it yourself? How have your factories been with innovation and change?
 

MythOfSisyphus

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Subbed. Amazing content in here.

@MythOfSisyphus how does your product development process (new products and new SKUs) work with your factories? Do you hire out development, or do it yourself? How have your factories been with innovation and change?

We do the product development ourselves. We work with a number of different factories and some are better than others. We have a really good relationship with the factory that supplies the largest percentage of our SKUs and they are really responsive when it comes to changes. They'll even make suggestions to us based on what their customers in other geographies are doing with similar products.

The basic process though is that I'll usually approach a factory (or several factories) for samples. Once we receive them my wife will test them out and provide me with feedback on them.

If it's a product that we have other varieties of already, or if it's very similar to something we already stock (this is usually the case) then I will already have an idea of what other changes to request from the factory based on customer feedback. (We have been considering using some of our regular customers as product testers which we would involve at this part of the process).

After this I will provide the factory with very specific details on what we need changed and any product packaging graphics (I still do most of this myself, however have often outsourced more complicated packaging). It's important to be super specific here especially with some of the Chinese factories as they can make some horrendous mistakes when things are left to their own imagination or judgement.

The final step is having them send us detailed photos to verify that the products and packaging look correct before shipping (also very important) in order to avoid any horrible surprises on arrival.

My wife will then do another test before we launch, although if anything is wrong at this point (very very rare) it's usually an expensive mistake to fix.
 

GravyBoat

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We ended up hiring a developer/designer from Under Armor for our gym product, and it came out great, but for the cost (3.6k for a few hours of work and 3 or 4 zoom meetings for feedback/input), I wonder if we could have done better (or spent less I mean)...

This is the first iteration of the product and I think subsequent iterations and variants / accessories and other products will come easier and faster.

When launching a new product or SKU, I'm assuming you have an email list that you blast? How else do you get it to gain traction at launch? Do you do much with buying Amazon reviews or running FB traffic to AMZ to get it to rank, etc? Or are you only on your own ecom store?

You said you sell in multiple countries. We are planning to sell 70% in USA and 30% in AUS (at least that's how we're going to ship the innitial MOQ order. Any advice here? We're doing Amazon and ecom store, but pushing Amazon at launch. Any thoughts would be much appreciated.

Thanks for the thread. Really inspiring stuff.

David
 

MythOfSisyphus

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We ended up hiring a developer/designer from Under Armor for our gym product, and it came out great, but for the cost (3.6k for a few hours of work and 3 or 4 zoom meetings for feedback/input), I wonder if we could have done better (or spent less I mean)...

You possibly could have but if you're happy with the design and it's a one off cost then I don't think that's too bad. Much better than paying a lot for something that didn't come out so great.


When launching a new product or SKU, I'm assuming you have an email list that you blast? How else do you get it to gain traction at launch? Do you do much with buying Amazon reviews or running FB traffic to AMZ to get it to rank, etc? Or are you only on your own ecom store?

Yes, we have an email list of around 20,000 now and for most products we do a launch email. For smaller products we usually just do a social media post though.

We don't sell on Amazon at the moment for a couple of reasons... 1) They still don't have much of a foothold here in Australia (but I predict the eventually will) . 2) It's a real hassle to get chemical products on to Amazon and our own brand of products have to have barcode numbers (which aren't necessary to us for any other reason than getting our products on Amazon). If we only had a handful of products and Amazon was more popular in Australia then this would be fine, but as it is currently, it's just not worthwhile for us.

99% of our sales are via our website and ebay accounts for the other 1%. We invest quite heavily in Adwords for our traffic, but also do very well from organic traffic. Instagram is huge in our industry so we do a lot of paid ads on there and facebook to generate interest in new products.

You said you sell in multiple countries. We are planning to sell 70% in USA and 30% in AUS (at least that's how we're going to ship the initial MOQ order. Any advice here? We're doing Amazon and ecom store, but pushing Amazon at launch. Any thoughts would be much appreciated.

As I said before, Amazon isn't anywhere as big in Australia yet as it is in the US so you might find your Australian traffic is better directed to the ecom store. Also... shipping between US and Australia is terrible at the moment due to covid but that's probably not as much of a concern in your niche as it is in ours.

Thanks for the thread. Really inspiring stuff.

You're welcome. Just really happy the thread is still helping people.

Also... I'd love to see your product once you've launched and would highly recommend doing your own progress thread if you haven't got one already.
 
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GravyBoat

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You're welcome. Just really happy the thread is still helping people.

Also... I'd love to see your product once you've launched and would highly recommend doing your own progress thread if you haven't got one already.

In fact I will. We have 3 samples on the way now. Appreciate it and will report back!!
 

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