Sometimes we see a fancy website selling stuff we love and we think: “Oh look at this big company right there”. But we don’t realise that some of these websites operate by ordinary people like you and me!
Starting or growing a business doesn’t require a huge amount of money. Plus in our times you can get financing from different sources like peer-to-peer lending, small business loans (Boost Capital) or even traditional bank loans.
This article is about two friends of mine who were brave enough to start a new venture selling quality shoes online.
Meet Nick & Kate from NKLondonShoes.com. Kate recently quit her 9-5 job to become a full-time online entrepreneur.
Intro
Michael: Guys, thanks so much for being here at Foxy Monkey with me. I want to learn everything I can about starting and growing an online business.
Kate: Thanks so much for inviting us! We’re really excited to be here.
Michael: Pleasure. For those who haven’t heard of NK London, it’s a new luxury footwear brand selling high-quality shoes online.
Kate, please tell me how you decided to quit your job and become an entrepreneur in 2017.
Kate: I used to be a foreign-language teacher for the past 10 years. But I always had the shoe business in my mind. I am originally from Greece, and when we moved to London and settled here, I wanted to make this dream a reality.
In our generation, creating an online business is easier than it has ever been. Everything happened in a coffee shop one afternoon, when Nick and I decided to take the plunge and that now is the right time to do that.
Market Research & Product Selection
Michael: Why shoes, not some other product? How do you go about product selection when creating an online shop?
Kate: Shoes were always my passion. My parents owned one of the oldest shoe shops in Athens and I grew up there, with the business, visiting factories, etc. I was always intrigued by the smell of leather as well as the process of making a pair of shoes from scratch.
If you can combine passion and know-how you have a killer combination.
As a woman, I like shoes. The number of pairs a woman owns is never enough haha!
Nick: Although the UK market offers some great shoes, it lacks the quality of the leather at an affordable price. Having spoken to different factories, we tried to design a high-quality beautiful product while cutting expenses to keep the price low.
There is no better product research than visiting physical shops. For Kate, not being able to find good shoes at reasonable prices was a real problem. She would either find very expensive brands (not worth it for day-to-day clothing) or very affordable ones but of cheap quality.
Michael: This is very important, what you just said guys. The best businesses by solving a problem people have not just because you “think it’s a good idea”.
How do you decide to leave your job and go all-in building an online shop?
Nick: We wanted to take advantage of the great opportunities London can give to us. The UK market offers great retail market opportunities as well as banking and tech, of course.
Since it’s the two of us, it’s easier to lower the risk of starting a new business. One person can have a stable permanent job (almost risk-free) which allows the second person to take on entrepreneurship.
Kate: We wanted to take a risk and go for it. Sometimes it’s good to take a calculated risk.
Finding Suppliers, Pricing & Technical Tools!
Michael: Suppliers! How do you select suppliers and keep inventory?
Nick: This was one of the questions we knew we had to answer first. How do you visit the factory and ask for something very specific? This applies to every business not only to shoe products.
You always have to know what you want beforehand. Product design is a whole science, and especially shoes – anatomy, foot shape, materials, technical design. We, therefore, had to specialise in knowing what we want.
As a result, Kate started taking lessons at the London College of Fashion to learn about product specifications. She was then able to give specific requirements to the factories. Unfortunately, UK does not offer many manufacturers.
We took samples from European factories and then decided to go with one in Greece. We, however, keep our eyes open and are always on the lookout for new manufacturing opportunities.
Michael: What about inventory and logistics? Do you keep your own inventory?
Nick: We do keep our own stock, but trying to keep it to a minimum to keep the risk low. Of course, the factory has to agree to that.
Michael: How much money do I need to start an e-commerce business?
Nick: It really depends on how much time you want to allocate. It’s possible that one can have the tech know-how on website development or the appetite and the time to learn what it takes. Another example is product photography.
If you do have the skillset, then the startup costs can be very low. If you don’t have the technical skill set, like us, then you’ll have to outsource. Website building starts at £500 for a simple WordPress theme with WooCommerce and goes all the way to £14,000 for a fully customised website.
Then you have the product costs. We tried to lower our costs by avoiding storage places which are a high cost one.
People are afraid of costs but you can always start lean. Buy a used £400 mid-range camera (Canon EOS 70D) or a new Canon 1300D and learn photography online. YouTube offers great tutorials for free, but there excellent low-paid ones like this one: Photography Masterclass: Your Complete Guide to Photography
You can also use Shopify instead of building a website from scratch. Shopify is easier than WordPress and focuses on e-commerce. It’s easy for beginners and for non-technical people but requires time!
In terms of marketing costs, we tried to skip paid advertising and go for organic growth on social media and SEO.
Michael: How do you determine the pricing? How do you find the sweet spot?
Correct me if I’m wrong, but the theory says that you should charge as much as you’re allowed to. This is why an iPhone X costs £1,000.
Nick: This is one of the hardest questions. You’ll have to include the innovation and the research into the pricing.
Whoever thinks it’s easy, I have one question for you. What do you prefer? A £100 pair of shoes or a £150 £100 one?
As a customer, you tend to prefer the second. You’ll have to consider those things when trying to price something. In fact, this topic is huge, it’s a consulting service that you can pay someone to help you with.
Marketing Tools and Growth Strategies
Michael: Tell me about your growth tactics. How do you go about growing your online business?
Kate: We try to be active on social media and focus on SEO by having a blog. Content marketing is huge and I try to write a blog post every week on something related to footwear or fashion.
I write helpful tips, offering suggestions on how to wear our shoes and how to style yourself. How do you select a comfortable pair of shoes? Beauty, women-related tips and tricks.
Michael: I can imagine it has to be a bit personal too in order for you to be more relatable to people.
Kate: Spot on! I am very interested in hearing people’s ideas and opinions about our shoes. It’s not just a cold product at a fixed price.
I try to establish customer relations much more than I try to sell. Really. One leads to the other anyway.
Michael: Do you use any other channels to get new people to visit NK London Shoes? What are the best marketing tools to grow an e-commerce shop?
Nick: We use 4 different channels.
1. Social media: This is the obvious one. Instagram, Pinterest and Facebook.
2. Online Marketplaces: The second one is to leverage existing marketplaces. There is a trend to using Amazon, eBay and more fashion-specific ones like Asos. Of course, you will have to pay for this exposure with commissions up to 30% or even higher depending on the service you get.
We now sell on Amazon too, check us out (link here).
Careful on Amazon when you upload products. They need to match exact specifications and they have strict requirements for images.
3. Word of mouth: Good old-fashioned leaflets really work. If a company pays attention to you by offering you something you feel unconsciously obliged to give back. The famous act of reciprocity.
4. Physical presence in exhibitions: Believe it or not this is very important. Kate along with the NK London brand should be present at important events like the recent London Fashion Week.
Michael: Thanks for the very useful answer, I learned some great marketing hacks here! What are the next steps for you and the business?
Kate: We really want to make ourselves more visible at an exhibition but not as visitors this time! This will allow people to meet us in person and see the “look n feel” of our online products.
We can then establish a more personal relationship with people that the internet cannot provide.
Nick: The second step is to fix past mistakes. There is no way you start something new without making any mistakes!
There is no way you start something New without making any mistakes. Keeping track of them will help you fix them
We keep track of the mistakes we make, even when it’s not our fault. For example, we realised we were not focusing on providing the best customer experience on our website.
When selling an online product this is the most important thing. Unlike visiting a physical store, you cannot apply persuasion tactics by talking the customer out of it. An online customer is essentially just an IP internet address when visiting your website.
You will then have to convey your selling points to the customer. The visitor has to understand the quality at a glance and be sure that “what you see is what you get”. This challenge requires a great effort on designing and changing your website.
Incorporating 360-degree product views is a great way to do that. There is software you can use to easily provide a better experience of the whole product.
According to a Guardian survey, 360 views can increase the probability of selling by 25%!
Michael: Amazing. I guess psychology plays a big role there too. You allow the customer to feel the product in their own way.
Is Building an Online Shop Worth the Effort?
Michael: Reaching the 1-year milestone… Is it worth the effort or not?
Nick: Our goal by the end of the third collection is to have our profits cover our first-year expenses.
If we cannot achieve this, then we may follow different fundraising strategies like Kickstarter. Kickstarter gives you the flexibility of pre-selling something without giving away any equity.
Michael: I thought Kickstarter was mainly for tech people.
Nick: You can do fashion too. Fun fact: The most successful Kickstarter campaign was when two people raised $5m in two days selling affordable Swiss watches!
This is pre-selling. You can also avoid pre-selling and go for different benefits. You can get $5, for example, in exchange for a mention somewhere on your website.
Michael: Guys, thank you so much for joining me and for the valuable tips you shared with us on growing an online shop. Any final words?
Kate: When starting something out, there should be someone that has the passion for it, and one with an analytical view that sees the pure numbers behind it.
In the beginning, usually, the initial costs are higher and this is where passion comes in and takes the risk. But as you go along, passion has to give room to numbers.
Thank you so much for inviting us, Michael!
Nick: Yes, hope your readers like it!
My Key Takeaways from the interview
- You don’t need thousands of pounds to start a successful online shop. You can trade your time to learn valuable skills like photography, website building and social media marketing using the Internet.
- Online and offline can be combined to fuel growth. Physical presence is important too.
- Everyone makes mistakes. Keeping a record will dramatically increase your chance of fixing them.
- Business requires passion as well as numbers. These two should go together.
- There has never been a better time to build an online shop 🙂
Have you ever thought of building an online shop, or do you own one?
For more inspiration, take a look at Foxy Monkey’s Extra Income ideas!
