Ashish Malhotra joins us to talk about how he took online jewellery website Novadab.com from launching from his spare bedroom to annual sales of $3million within just 3 years, then he sold it in a multi-million dollar exit.
2020 eCommerce MasterPlan Growth Series sponsored by Omnisend
This episode is part of our annual growth series – you can find out all about how it can help you grow your business and links to the rest of the episodes here.
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About the Business
- Intentionally chose jewellery as an eCommerce business to build.
- Started Novodab in his spare room at home in Austin Texas and grew into a multi-million dollar business
- Built on experimentation
- Used team outsourcing to grow quickly
In the summer of 2014, Ashish transitioned from working at AT&T into eCommerce. The move, he says was the most uncomfortable thing he’s ever done. Transitioning from a stable, well-paying job to entrepreneurship was scary, but clearly worth it.
He wanted to unleash his creative side and also be able to see and work on the whole puzzle. Ashish started by experimenting. He began buying products from Alibaba.com and was shocked at the huge price difference that you could find between wholesale and retail.
After looking at a lot of different kinds of products, Ashish settled on jewellery. Jewellery has very good margins and there is a huge market for it. He also says that there are hundreds of thousands of products to choose from and they all have a good shelf life.
Product First Business
Ashish started with the product. He sourced from Alibaba.com and then built out a site on BigCommerce.com. From there he started learning everything through trial and error and says that he made a lot of mistakes along the way.
Ashish started with an initial investment of $12,000 and began targeting deal sites as a focus early on. He kept with that method primarily for the entire first year. By the end of the first year, they were getting the traffic they needed to start processing order independently.
Deal Sites and a Big Break
As with most startups, Ashish experienced some moments of uncertainty and some cash flow issues, but Ashish made it through the woods and upgraded his home to a four-bedroom where he could expand the business.
He hired some part-time help to help pick and pack and continued to focus on growth. The companies big break came in year 2 when they got on some major deal sites including Zulily and Groupon. Their first order on Groupon sold 10,000 units.
There were a lot of logistical issues that came up when Novodab got into the deal sites. To help him cope with the explosion of growth, Ashish decided to build a team of offshore customer support.
This gave him more time and profits which supported the move and helped him grow the business even more. The reason Ashis took Novodab offshore was largely because the barrier to entry was very low, it was more cost-effective and he was already familiar with India since he was born and raised there.
The next phase of growth came quickly after Ashish began outsourcing customer service among other things. Two customer support reps, a designer and a digital marketing expert who helped with SEO, Facebook ads and more.
Google AdWords, Facebook ads and SEO started bringing in 25k+ a month which completely changed the performance of the business. Increased conversions from email also came when the designer started sprucing up the look and messaging of the emails which eventually became the top ROI for the company.
Discount sales were a large part of the strategy from the very beginning and continue to inform the business today.
Using urgency by creating anchor points and pivoting campaigns out from there has allowed the company to offer a discount but keep margins healthy for the bottom line. With these strategies working, the company continued growing and added more human resources and better tools to make service faster and better.
The company was able to evolve into a comprehensive customer service model that combined live chat, FAQ’s and more nimble customer service and Ashish said that this is what allowed him to free up enough time to build the marketing side and ultimately grow the business.
Selling the Business
After a few years, Ashish began to feel burnt out. By the time he reached that point, he was finally able to recognize the value he had been able to build apart from himself.
Using a broker, Ashish began cleaning up the financials so everything was tidy and easy to transfer. He made sure that his team knew every aspect of the business and they outlined specifically the SOP’s so that the handoff could be seamless.
He also passed on the partnerships he had with deal sites like Groupon. The process took about 6 months to go through and Ashish says it was the right time for him to move on.
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eCommerce Book Top Tip
- Getting things done: The Art of Stress Free Productivity by David Allen
eCommerce Traffic Top Tip
- Don’t chase the same things everyone else is chasing and focus on results. Find a unique way of getting your story out. Be willing to be out there however you can.
Tool Top Tip
- Blinkist—an app that summarizes books
Growth Top Tip
- Grow yourself to grow your business. You have to be willing to invest in yourself to get the skills you need. You need to work on not only getting the skills to grow but also working on your own mindset to become the best version of yourself. Also learn how to deal with rejection, burnout, lack of focus and all the difficulties that can come up.
- ECCO’s Hilary Fletcher on how to grow and sell a Bricks and Clicks business
- FE International’s Thomas Smale – Buy or Build? How should you get started in eCommerce?
- How to buy an eCommerce business with Empire Flippers’ Justin Cooke
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