Table of contents:
- The "invisible" side of business
- We were ahead of our time - we were left with losses
- Repeating someone else's success is not easy
2023 Author: Malcolm Clapton | [email protected]. Last modified: 2023-05-22 06:26
Three honest stories of women entrepreneurs.
To be successful, it is not enough to repeat what billionaires do. You need to understand what mistakes were made by those who did not succeed, and draw the right conclusion from them.
Lifehacker considered one of the most popular types of business - online shopping. The former owners were honest about what went wrong, how much money they lost, and what advice they would give to newbies.
The "invisible" side of business
Before buying out an online store, I worked in advertising and marketing. Another project was completed, a new one did not start, and I was practically out of work. And one evening my husband suggested to me: “Let's open a business for you,” and I decided not to miss the chance.
In 2016, there was a boom in quests in Moscow, and we looked closely at them. At first, there were long miscalculations and drawing up business plans, then we dropped this idea and started looking for another interesting business, and in the end we came to the conclusion that it would be cool to open an online store. At the same time, I got pregnant and decided that the best online store that a young mother can have is a children's goods store, namely clothes. Everything seemed simple and logical: the idea ignited me and inspired me so much that I immediately started to implement it.
I started looking for ready-made online stores and found Kids-collection.ru. We began to formalize the buyout of the domain name, the remnants of clothing and contracts with suppliers.
The ransom cost 1,000,000 rubles. The money for starting a business was lent to me by my mother-in-law.
It was originally planned that for this amount I would purchase two online children's clothing stores with the same product content, just under different domains. But at the time of the deal, it turned out that only one domain name was being sold, that is, one store and part of the rest. At the same time, the second Internet project becomes my competitor.
And so I became the mistress:
- A ready-made site on some prehistoric CMS, with which only Ukrainian programmers could work.
- Warehouse leftovers, consisting of three boxes with hats and clothes, which was bought back in 2012 by the first owner of the online store. The entire warehouse fit in my dressing room.
- Supplier contacts were the only ones in Russia that offered the brands I needed. I was assured that the cooperation was already established, so I did not worry about this.
But the surprises did not end there. It turned out that the wife of the first owner of the online store worked in a supplier's company and left there, having quarreled with the team. Therefore, the expectations of supplier loyalty were instantly shattered.
But I had a fuse with me, and I started working. I was alone in the team: I worked with the site's admin panel, contributed content, processed applications, answered letters, took goods from suppliers and took them to customers.
I managed to change a few things in the work of the store.
- First, I hired a new designer who updated the interface of the site because the old one looked just awful.
- Secondly, I didn’t buy goods, but agreed with the supplier that I would make a buyback for a specific order. That is, if an order came for a product, I called the warehouse and asked if the item was in stock, and only after that I bought it back.
Frankly speaking, the work was extremely routine.
When new collections came, which is about 3,000 items, it was necessary to check every item, download and upload a photo, write the name of the product correctly. It just seems easy. But it is necessary to indicate not just "Children's jacket", but "Children's jacket with cuffs and a hood with a zipper, double-sided with a cover, black" and so on. It was necessary to describe each size that is in the line - imagine how much work it was if I was selling clothes for children from 3 months to 16 years old. I sat until three in the morning and manually entered all these small numbers. Of course, it was not interesting.
The only thing that fascinated me was working with customers. I even delivered orders myself. Since I was deeply pregnant, the clients treated me very carefully. In general, the audience I worked with was interesting, for example, directors of various hotels and shops with very different and wonderful children.
Of course, there were also “garbage” orders: bring me an Aston Martin children's coat for 15,000 rubles, because I just want to see it, touch it, try it on. These people just wanted a photo for Instagram. It was easy to understand who was ordering a thing for what: a real buyer always asks for several sizes in order to choose the right one, and photo hunters - as many different models as possible in order to get more different looks. Later I learned to filter out such applications and say that these articles or sizes are not available.
At the same time, I started working on another project in the profile, and there was less and less time left for the store. After the birth of the child, I generally put up a stub on the website stating that the store was temporarily closed. Three months later, I hired a girl, who was also a young mother, and tried to give her most of the work for a percentage of the sales. She worked in the store for several months, but eventually merged for family reasons. In the meantime, I found a full-time job in the office, which sparked more emotions in me than the routine typing of numbers.
The store brought in up to 100,000 rubles a month under normal load.
The mark-up on goods was high and unregulated; it was possible to set the price three or four times higher than the cost price. There were few competitors in this market. The store itself was displayed in the first positions in search engines for the query “children's branded clothing”, so I did not look for clients, they found me themselves. After all, this is exactly what I paid 1,000,000 rubles for.
But 100,000 came out only in good times. In parallel with the store, I had projects, motherhood, and then work: I could not devote a full day to the business, so the revenue, as a rule, was about 40,000 a month.
At one point, I just stopped responding to applications and realized that the case should be closed. For a while, I persuaded myself to announce the official closure, but in the end I just hung up the stub that the store was no longer working. The domain name is still with me. Now I have moved to another country, and sometimes, when I see an interesting children's brand, the thoughts arise: "Should I revive my business?" But while things do not go beyond thoughts.
It just ceased to be interesting for me, and I returned to an advertising agency, took on a very large client and realized that online trading and working with children's clothes are simply not my business.
The start-up capital was not recaptured even by half.
Yes, in the end I returned my mother-in-law's investment, but this time from my salary. I also sold the car - not because of the debt, but part of the money went to cover it.
From this story, I took out an important idea for myself: young mothers do not need to open a children's online store at all. This is not as easy as it seems: I thought that I would buy things at the purchase price and not go around shopping galleries with my child, but in the end I put in as much time and effort as they invest in any other business.
Advice to those who are just going to open their own online store: make decisions carefully, think about what really attracts you, and before doing something, study the process from the inside. For example, I had no idea how many tablets I would have to manually retype - and this is just one of a dozen processes that my work consisted of.
We were ahead of our time - we were left with losses
Elena Duyun Founded in 2009 the Altay-shop.com online store, which she sold at the end of 2010.
Before opening the store, I worked in a retail business as a business coach, trained salespeople and managers, so the trade was clear to me. But no one really knew about electronic sales in Russia.
In 2009, my partner traveled to Germany and spotted this direction there. When he began to tell me about online stores, we simultaneously felt that it was possible to earn money here - our own experience of launching various businesses gave confidence. Today it seems to me that we have opened one of the first online stores in Russia. The boom on them began much later. I think our business had to be closed precisely because we started too early.
If we had continued to believe in the idea for at least another six months, we would not have sold the store.
Online shopping was not our only business, so we never put it in the first place - it was rather an exciting hobby for the money that other projects brought. At that time, we already had a service station, a car wash and a training center.
We didn’t know which was better to sell, so we decided to sell everything: from children's products to construction products. We thought that some of this would definitely shoot.
Everything was done from scratch: at that time, there was no such variety of sites and landing pages in the public domain. We ourselves were looking for templates for development, partially redoing them, clogging up all the catalogs. In ordinary, built-up business segments, we would simply hire a qualified contractor, but in this case everything was completely new and the project required the maximum personal contribution.
It was very intensive work, and now I'm not talking about finding partners or clients, but about getting to know the internal system. It was necessary to figure out how everything worked. For example, what should be in the description for a person to want to buy a product without seeing it. The whole story was to figure out how the buttons function, what is "Buy". Now it seems obvious, but then knowledge had to be collected bit by bit, most often looking at foreign experience. Searching for information took up almost all of my free time.
We bought goods from suppliers upon order, and the main expenses were associated precisely with the technical side of the online store: the domain, the site template and the site itself. There were also monthly expenses: from the very beginning of work, we rented an office, put a telephone there, and also hired five employees. Four of them put the goods into the database, and one held the position of development director. The amount of work already at the start was such that we definitely would not have done it together.
Customers came to us through advertisements in online catalogs, but there were so few of them that we could count them on our fingers.
But we had a huge assortment. Since the store was based in the Altai Territory, the most popular products were tourism.
Until the last day, we did not stop work on finding partners and suppliers, and only thanks to this we had at least some results.
Stores then did not have their own online platforms, and for them our Internet resource became an additional point of sale. For example, we have successfully cooperated with the Scout company, which produced quality goods for tourism. They could sell their products all over Russia only through our store.
We ourselves sent the goods to customers: we bought things, packed them and sent them by a transport company. It could be oversized cargo - for example, tourist tents weighing 25 kilograms. Now everything is simpler: the owner of the online store receives an order, he redirects it to the supplier, and the supplier is already engaged in the delivery of the goods. We had to do everything with our hands.
In the first year, we did not expect any results: we were just looking for suppliers, directed our efforts to negotiations with people and established work. We learned to create, advertise, fill catalogs. But after a year and a half, the store did not begin to go into profit. Every month it seemed to me that everything was about to turn out, it could not be otherwise: after all, we managed to attract so many companies, the site worked properly, advertising was spinning - we had all the ingredients for success.
But in the end, we spent almost 1,000,000 rubles - for us this is a line after which we close startups as ineffective.
We did not understand what we were doing wrong: we did business honestly, invested in them morally and physically. We even gave ourselves extra time - a couple more months to see if the store will work without our additional investments? But the miracle did not happen, and we put it up for sale.
But the next owner was lucky. He bought our site, changed his profile to beauty products, and the idea went off. Now the store is still working, but with a different assortment.
We did not recoup the initial investment. And how could they have done this if we made no more than ten purchases a month? The store never reached self-sufficiency. Of course, this is unpleasant, but we did not regret it - after all, it was an experiment, and we were prepared for the fact that the result could be anything, although, of course, we hoped for a favorable outcome.
What advice can you give to entrepreneurs? Prioritize: if you want to sell a quality product, look for good suppliers, if your priority is profit, become a strong distributor. In any case, do what really ignites you from the inside, then you will convey this feeling to your customers.
Repeating someone else's success is not easy
Nina Makogon Co-owner of the online tableware store from Europe Splendidkitchen.ru from 2011 to 2012.
My partner and I had a touring agency for chefs from all over the world, Splendidagency.com. We knew the culinary and gastronomy market well, but time dictated new conditions, and we realized that only a business with a developed Internet platform has prospects. After much deliberation, we decided to launch our own online store. Confidence was given by the experience of my partner's girlfriend, who opened a successful online store selling wedding paraphernalia.
The scheme was simple: she imported huge quantities from China and sold them at a premium. According to her stories, the business looked profitable and really promising. And we also decided to take a risk, taking her as a mentor for our shop selling tableware from Europe.
At a major catering trade show, we met a gourmet tableware wholesaler who offered beautiful plates and cups at above average prices. We talked, agreed on the terms and decided to sell some of his goods.
We invested about 200,000 rubles in the online store, taking money from the turnover of our company.
Little was known about the specifics of the industry, but then the market did not even exist - there were about three large online stores that sold everything. But everyone suffered from usability, the user was greeted with an inconvenient interface and a lagging design.
We immediately decided to make a stylish story. To do this, they hired a designer who worked in glossy magazines and, like no one else, understood how to make a beautiful picture. Unfortunately, she had no experience in website design, and this played against us. When we handed over the design to the developer, he had to make adjustments, and in the end we got a not as nice site as we had originally planned. We spent about 80,000 rubles on the development.
The scheme of our online store was simple: a customer made an order, we purchased goods from a wholesaler and sold. There were few orders, so it was easy to turn this chain.
Our story lasted about 9 months. All this time, we have constantly invested: both in advertising in search engines and in content. We had a content manager who wrote texts, looked for interesting pictures. It was very important to describe the product with a twist and first. Due to the speed and uniqueness, we quite often went to the top of search engines.
In general, the resources were used up by the sea. They managed to earn about 20-30 thousand rubles a month, that is, the time spent, efforts and profits are completely incomparable.
We realized that something went wrong when, after three months of work, we still didn’t reach 100,000 rubles of income per month: we didn’t even beat back what we had invested. All the money was spent on promotion in Google and Yandex.
We decided to give the site another chance, the example of our mentor's online store was very inspiring. It seemed like we just needed a little more time for sales to pick up steam. For a couple of months we continued to invest in promotion, then we abandoned investments as an experiment. But the result was the same: the profit did not appear.
In the end, we just made the decision to close the project. Of course, it's unpleasant when something doesn't work out for you, but we understood that this is an experience and you have to pay for it.
The online store did not recoup the investment. Moreover, we had a loss of about 300,000 rubles.
We believe that the main reasons for the failure were:
- unfortunate name - it was difficult for people to remember and pronounce it, this is our epic fail;
- few investments in contextual advertising in search engines;
- treated as a side business that we did not devote enough time to.
My advice for those who have just decided to open an online store: first, study the market, competitors and understand who exactly your consumer is. Determine how much customer pain you will compensate with your online store. Ideally, you should only open a service with a very narrow specialization.
Second, plan your budget ahead of time. It is worthwhile to clearly understand that you will have to invest heavily in advertising and marketing, especially at the start. And do not skimp on the content of the store: take high-quality photos and describe them correctly. Then you might be in luck.