If you’re a growing eCommerce brand that is looking for best practices around how to grow your Shopify store or want to learn creative ways to scale your eCommerce revenue, you’ve come to the right place. As small business consultants in Austin, we see get to work with some of the most gifted eCommerce operators in the country.
In this interview with Monxi Garza, the founder of Suavs, we learn how to start an eCommerce business, how to test your prototype, tips for increasing eCommerce sales, and how to aggressively scale your eCommerce business with digital marketing and content.
Step By Step Process For Starting And Scaling An eCommerce Business (If you are already at $100K+ in sales, skip to #8):
- Create Spec Sheets – Side View, Top View, Bottom View
- Research 10-15 Manufacturers and observe ease of communication, MOQs, and financing terms
- Identify best combination of price, quality, MOQ, and financing terms
- Avoid ordering a huge batch of inventory without getting feedback from potential customers
- Get feedback from the market using Kickstarter
- Increase conversions on your Shopify site – “make it easy enough for a grandma to buy”
- Amplify any articles, PR, Kickstarter, or any other branded content on social media
- Start with a small social media ad budget of $10 a day and learn what works and what doesn’t
- Once you can spend $100-200 a day on Facebook, consider getting professional help
- Use Return On Ad Spend (ROAS) to hold your marketing agency accountable
- Consider a Third-Party Logistics (3PL) solution
- Use other sales strategies besides ad spend: referral software, DIY PR outreach, affiliate marketing, and events/community building
- Keep experimenting
Interview:
Chris: What is Suavs?
Monxi: Suavs is a footwear brand that creates comfortable and stylish shoes for people to go anywhere and do anything.
Chris: What did you do before Suavs?
Monxi: I studied fashion in Spain and then moved to San Francisco to work with Spicer Bags. I actually got to work with Sally Spicer while she was building the brand. I learned so much from her: how to use Shopify to sell, how to reach out to wholesale accounts, how to pick and pack product and ship it out. I learned how to do quality control as well. She did everything in house so I got to learn the entire process from design to shipping with her. She had a little warehouse and a team of people that made the bags in house and she would receive all orders from suppliers and help with shipping. She also taught me how to look at orders on Shopify and sync them into Quickbooks to track inventory and COGS.
Chris: What sales channels did she use?
Monxi: She had a combination of selling on her Shopify site and also selling to other brick and mortar shops and a few other eCommerce stores. This taught me to diversify our sales channels.
Chris: Then what did you do?
Monxi: Then I went to work with Loewe Handbags and eventually moved over to Bimba Y Lola. At these firms I learned more of the technical aspects of design. These were both mid and high end luxury fashion and I just happened to be put in the footwear department at Bimba Y Lola. This was my first time in footwear and they said if I worked hard, I could take what I already knew and learn footwear design in a few months.
Chris: What makes a great shoe?
Monxi: Comfort, style, and durability. Shoes are a lot different than clothing or handbags. There are so many sizes and they have to be comfortable on your feet. When you wear a shirt, you don’t even notice.
Chris: So how was Suavs born?
Monxi: Well, I was in Spain and it was really hot all summer and I was wishing that there were shoes that I could wear without socks that would breathe well, keep my feet cool, would be sweat-wicking, look good, and be functional both for work and for working out. I walked a lot in Spain and my feet were hurting in high heels and boots and sandals. I looked at a bunch of shoes all summer and they just weren’t something I liked, and finally I realized I designed shoes for a living and that I could come up with my own shoe!
Chris: Tell us how you designed your prototype and how you got feedback on it?
Monxi: Yes, the first step is called “prototyping”. The process is that you start by drawing your design. You create what are called “spec sheets”. If you don’t know how to draw, you have to hire someone to draw them but you basically just draw what the product should look like from a side view, a top view, and a bottom view. You put as much detail as you can and then you send it out to various manufacturers and they send back a sample. We had connections to some sourcing companies in Asia so we were able to get in front of suppliers quickly.
Without those connections, you would start with research and come up with a list of 10-15 suppliers and reach out to them and let them know what you are doing and ask them if they would be willing to prototype it for you. They usually charge a fee to cover the costs of running a custom product through their machines. Send your spec sheets to 10 or so, and find out what their minimum order quantity (MOQ) and vendor terms are so that if you like one more than others, you know what you’ll need to finance the first inventory purchase.
Chris: What else are you taking note of during these early stages of the relationship with the manufacturers?
Monxi: First, you are going to see the quality of their product when you get the sample back. Second, you are going to learn how easy they are or are NOT to work with. If they don’t understand your drawings and it’s difficult to communicate, it’s going to continue being hard. So look for a manufacturer that is respectful, responsive, and understands what you’re trying to do. Once you have 2-3 samples that you really like, I think you should visit the manufacturer. I went abroad and visited each factory and met everyone in person so I could see the conditions people were working in and build a relationship with each manufacturer.
Chris: How did you know you had product market fit before making your first inventory order?
Monxi: I didn’t. I just went for it. I made the mistake of thinking that because some of my friends and family thought my shoes were cool, that I had a good product. I went to sell the first batch online and that’s when I learned I didn’t have product market fit. I wasn’t able to sell enough to support growing the business. But I did learn a bunch. From the shoes I did sell, I got requests from customers asking for certain features or styles. I also decided to do a bunch of pop ups so I could interact directly with customers. I learned that guys didn’t like them and even my own husband and brother told me they only wore them because I created them.
Chris: That’s difficult to hear I bet. What did you do as a result?
Monxi: I realized that I wanted to create a shoe that everyone wanted to buy, not just what I thought was cool. I realized that to do this I would have to become obsessed with shoes and be extremely observant of buying behaviors. In fact, one day I was out with my brother and husband while they were shopping. They ended up both buying the exact same shoe. And then they wore them every single day. I picked the shoes apart from a features perspective. They were breathable, they had unique laces, they were comfortable, they were athletic looking but not like a sneaker. After that, I knew what I wanted to build and I took those specs, modified them to fit the style I was looking for, and started back at the spec sheet stage. I ordered samples again and this time I decided I was going to be smarter about testing product market fit. I ultimately decided to remove the risk of the next inventory purchase by using Kickstarter to get customer orders up front to fund the next purchase order.
Chris: Can you tell us how you had a successful Kickstarter campaign?
Monxi: First, I got a few samples made by manufacturers that I could use in marketing videos. Then I learned that Kickstarter actually has a number of people that come to the site just to shop so you get some baseline activity there. I also learned that people don’t want to take risks with their money so we set that we would only take the money if we were fully funded. Finally, I learned that being at least 50% funded in the first day or two increased the likelihood of success by a huge factor. This helped guide us towards our decision to only go for $20k in the campaign.
Chris: How did you go about making sure you would get off to a great start with your Kickstarter campaign?
Monxi: I made a list of all the friends and family I could think of and asked them to commit to placing an order. I also already had a list of emails from previous pop ups and my last order, so I reached out to them as well. So, before we launched, I sent out a message to everybody to help and to pledge.
So the basic strategy is to essentially try to get a commitment from friends, family and potential customers BEFORE you launch the Kickstarter. This traction is worth way more in the first day or two. We ended up going well past $20k, and ended up at $80k!
Other thoughts on Kickstarter: Make sure that your videos and images are really good. This is your one chance to make a great impression with people. It’s worth the investment in a great photographer and/or videographer.
Chris: What did you do to capture the momentum of the Kickstarter campaign? What methods did you use to grow your Shopify site?
Monxi: The Shopify site had to be optimized. And I got some great advice a long time ago on how to think about that. I was told, “Make it so easy that a child or your grandma can buy your product.” So, I literally sat there and just thought about being an old lady or a child and kept iterating until it was so easy to order, that it was impossible to mess it up.
I also was able to get a few articles about Suavs. I reached out to reporters and news sources and just told them what I was doing. I ended up getting into Business Insider, Buzzfeed, and a few others.
Finally, I learned that digital marketing works well when you have a successful Kickstarter campaign or some PR to shine a light on. So I decided it was time to start using digital marketing.
Chris: Can you tell us how you decided to approach digital marketing, Facebook ads, etc.? A lot of business owners have a lot of anxiety and fear around digital marketing.
Monxi: I knew other people were doing Facebook ads and I knew that hiring somebody to do mine would be expensive. I was also afraid that it wasn’t going to work and that I would waste all my money. So I decided to start doing it myself. I started really small, doing only $10 a day and then started adding more and more and kept getting more and more sales. I eventually was doing $50 a day, then $100, and I got to $200 a day when I knew it was working but that I had reached my limit in terms of knowledge. Once you hit that level of spend, it starts getting really technical with optimization, re-targeting, and funnels.
Chris: If your Facebook ads aren’t working, how do you know if it’s product market fit, ad copy, or targeting that isn’t working?
Monxi: I would look for other ways to re-test your product market fit. Go to pop ups, go to in person events, try to get articles written about your brand. If any of those are able to generate sales, then that means it’s sell-able. People will buy the product, you just have to do a better job making the website align with the in-person sales experience.
Chris: What metric do you use to make sure the Facebook ad agency you hired was doing a good job?
Monxi: We focused on Return On Ad Spend (ROAS). This is often referred to as Return on Marketing Investment. However, in Facebook Advertisement, most people use the term ROAS. An acceptable ROAS is dependent on your gross margins.
Chris: What can go wrong with a digital marketing agency?
Monxi: We ultimately found an incredible agency that was helping us grow really quickly. However, the communication wasn’t great and while the ROAS was high, sometimes campaigns were being run without us knowing to what extent which ultimately caused us to run out of inventory. There needs to be great communication between the agency and the person managing the inventory to make sure we don’t end up spending $$ to acquire customers and then having lost sales from stockouts. It’s a waste of money and it’s bad for the brand.
Chris: Once an eCommerce brand is doing somewhere between $500k and a few million in revenue, what should they be looking at and thinking about to keep growing?
Monxi: At this point, it’s time to start looking at the brand overall. There will be a certain point where only have a few product options won’t be enough for the audience in order to keep growing. Right now we have two products and we have started to see that we are having a lot of repeat customers. If you start seeing that a big percentage of your customers are repeat customers and your ads aren’t performing as well, it could be that you’ve depleted your audience, that you’ve saturated your audience. So we are looking at how people think about our shoes and trying to figure out who is in our audience but has different tastes.
I’d be really honing in on what your brand means and what products you want to offer apart from the products you are currently serving. This stuff is hard and can require some outside help. We ultimately ended up building a brand guide that acts as our North Star when thinking about these things.
Ultimately, I had to get really clear on where we see our brand and our company being in five and ten years. Being able to focus intensely on that vision and hold all of our present-day decisions against that vision is extremely helpful. This helps me make sure we don’t bring products that are too different or that don’t make sense with our plan.
Chris: When did you decide it was time to use a Third Party Logistics solution and how do you decide what a good price point was?
Monxi: It got to the point where we were doing picking and packing for more than half the day and I really needed to be able to focus on growing the business. On pricing, I ultimately didn’t end up going with the cheapest option because we really wanted someone that would do quality checks and take good care of our packaging. We also wanted a firm that was very good with returns because shoes experience a lot of returns due to sizing and fit.
Chris: Small business consulting is always facing the scarcity of resources. Some brands just don’t have budget for ad spend. What are the best ways to grow an eCommerce brand besides ad spend?
Monxi: Referrals are the best way to get new customers. The are the least expensive acquisition cost and it grows the strength of your audience. You can do this by creating a really good referral system.
PR is another great way to get word of mouth. I considered using a PR agency but I realized I could do this stuff myself and it was too expensive to pay someone else to send the emails for the stage my business was at.
Affiliate Marketing has a lot of bad actors but there are some really good platforms out there. Even the big news publications are getting into affiliate marketing. So you sign up for an affiliate marketing platform like ShareASale or CJ Affiliate. They will basically connect you with the publishers who are looking to do this and I try to be very picky about which brands I want to be associated with.
Events and community building is another great strategy. I saw Outdoor Voices do this really well under Tyler Haney’s leadership. I always admired how she brought people together.
Chris: What does a cold outreach email to a reporter look like?
Monxi: I try to keep it as short as possible. People don’t like paragraphs. And I focused on product review editors/writers.
“Hey, I’m Monxi, I have a shoe company. I have this cool product. Do you want to try it out?”
Chris: Any final words for the eCommerce business owners looking to scale?
Monxi: Diving a bit more into the topic of marketing, you never know what could work. Just test things out, test everything out. You might find something that works. For Facebook ads, I didn’t know and I just tested it on my own and it worked incredibly. If I hadn’t tried, I wouldn’t have grown Suavs like this. If you’re nervous, just set aside a small budget for testing different things and keep experimenting.
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