Maintaining profits when the stores shut with Industry West CMO Ian Leslie (episode 289)
Ian Leslie is the CMO at US homewares brands Industry West and Favor. It all started with Industry West in 2010, and then Favor launched in 2019. Now the 2 sites typically grow at 25% per year with sales over $10m a year.
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About Ian
Ian started his career as a journalist. When he saw that print journalism was dying out in favour of digital, he pivoted into working in marketing. His early experience included working with higher education platforms primarily focusing on lead generation.
Moving into an eCommerce role was especially gratifying as he says seeing the entire funnel really allows you to u defat and where you can make better decisions to influence outcomes.
COVID Impacts
Of the two companies, Industry West has been more negatively impacted. 70% of their sales come from a trade network which was largely slowed down.
Selling directly to businesses like offices and restaurants and secondarily to furniture dealers, designers etc. who serve those markets meant that their business saw a major loss.
They have since pivoted to focusing more on the DTC portion of their business, which despite good volume has a significantly lower AOV.
Favor, on the flip side absolutely exploded in sales and is doing very well despite the pandemic.
For both sites, web sales have increased significantly but while this increase reflects real growth for Favor it doesn’t necessarily pan out to growth for Industry West. Both companies are 100% bootstrapped, so don’t have any investor cushion to see them through tough times.
Conservative Marketing Spend
Ian has been conservative with his marketing spend in the volatile climate. He’s been using ROAS or return on advertising spend as the main metric for decision making but admits it’s not perfect.
No matter how much they get the web up for Industry West, Ian says they simply can’t compete with what brick and mortar and sales rep spend brought in. Added on top of all this is the fact that they’ve been competing with a competitive sales and free shipping offers market, something that cuts into their margins significantly.
Keeping Balance
Given all this, Ian says COVID has forced a balancing act to occur that changes weekly. Web alone is keeping everyone paid, but their profits are suffering.
One thing that has helped their plight for Industry West has been their already existing focus on urban centers.
Changes in Marketing
Ian has rerouted a lot of their effort toward an increase in content marketing and their Google shopping feed.
They’ve also found creating ways to generate cash without damaging brand reputation with some warehouse sales.
Everything right now remains week to week and Ian is trying to build resilience in the face of his own prediction for a low profit Q4.
Bootstrapping vs. Investors
Being bootstrapped can be a double edged sword. The intimacy and quick communication among decision makers is hugely helpful on the one hand, but cash flow can be tight.
The culture though makes it worth it in the end and Ian says if given the choice, he’d choose bootstrapping every time.
eCommerce Book Top Tip
- The Victory Machine by Ethan Sherwood Strauss
eCommerce Traffic Top Tip
- Email and social. Ian has been divesting from google and shifting focus to these.
Tool Top Tip
Growth Top Tip
- Look at the analytics! Look at the data!
Interview Links
Related episodes
- Temples and Markets’ Judith Treanor on getting to $10k per month in year 1 w/ email and social enterprise focus
- Copper Dust’s Vanessa Agyemang – Startup, Popup shops, Wholesale Trade Shows and more
- Building a 7-figure eCommerce business with Sustainable Furniture’s Margaret Larson
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