The retail industry is Australia is doing it tough, except of course for those businesses that have embraced online retailing as either an exclusive channel to customers or as a value added complementary service to their bricks and mortar operations.
This trend has been growing for more than a decade, which is part of the reason I chose to start Millennius, an Australian online retailer of consumer electronics, in Melbourne six years ago.
From little things, big things grow
Millennius’ story is not unlike some other notable Melbourne online retail start-ups from the period. I started with less than $100 in my bank account and my first “office” was the garage in my parents’ house.
I had always wanted to be in business and from a young age was always involved in some form of business enterprise. At school I was the “Chocolate King” thanks to my reselling of chocolates I was able to get at wholesale cost through a family friend. That entrepreneurial spirit has remained strong and at 21 years of age I started selling consumer electronics, initially through an eBay store.
Millennius was born following a trip to China in 2006 where I secured a number of supply agreements with manufacturers. This has proved crucial to the long-term success of the Millenius business as the savings I can provide to customers comes predominantly from the ability to cut out the middlemen between manufacturers and consumers.
Like many first time retailers, I discovered the hard way that eBay also has its limitations. After initially having success selling MP3 players and DVD players, I saw the opportunity to expand and make the business a full-time enterprise with a wider product range and sourced a LCD flat screen TV product. The demand proved so great I was able to pre-sell my first container load. However, eBay’s selling limits caught me out. I still had another shipment coming and no way sell them, and more worryingly, no way to pay for them.
The power of perseverance kicked in and by scraping together funds from wherever I could, including my friends and family, I was able to cover the payment for the delivery. But it taught me a valuable lesson about online retail: use eBay wisely and do not to rely on it as a sole trading point for your business.
I quickly established my own e-tailing website and was able to sell the remaining shipment of TVs quickly. It was a nerve wracking time but was valuable in teaching me to trust my instincts and remain solutions focused at all times, for my own sake and that of my current and future customers.
I quit my full-time job working as an architectural draftsman and started to focus full time on Millennius.
Seeing retail from both sides of the fence
In 2009 I opened a bricks and mortar Millennius shop in Melbourne. I wanted to see for myself if the physical shopfront was more appealing to customers and learn first hand the ins and outs of customer service and delivery. The shop was always intended to be a pop-up store but persisted for more than six months. What I was finding was the bricks and mortar operation was both profitable and enjoyable, but had high overheads. This was hindering my plans for expansion throughout Australia and beyond.
I chose the online operation as the future of the business that would be more stable and cost-effective in the long run. It came down to the ability to reach and provide service and products to the 200 people that came into the store every day or the potentially unlimited number from Australia and around the world that could visit my online store. The plan paid off, and I was quickly earning in a day what I used to take home in a week.
Overcoming the “Made in China” stigma
I’ve had people say to me: “Who would buy unbranded Chinese product that no one knows from you?” And this: “Companies like JB HiFi and Harvey Norman will just wipe you out – do you think they will let you run your business if it impacts them?”
I always thought that consumers were always looking for the best deal, and the fact is that many of the world’s leading consumer electronics manufacturers produce their products in China. What Millennius and businesses like it are proving is that people want the latest technology, both from a hardware and software perspective, and are prepared to educate themselves and compare apples with apples. If 90 percent of the crucial components I use in my products are identical or better than those in some global electronics brands, then educated customers are smart enough to work out the value proposition for themselves. And with technology progressing at such a rapid rate, consumers are also weary about paying top dollar for products that are routinely superseded in three to six months.
Five years on, the proof is in the businesses that are thriving in the consumer electronics space, like Millennius, and those that aren’t. Millennius now sells thousands of products and has grown from a one-man operation to one that is now employing more than 20 people in Australia and China covering sourcing and importing, through to sales and customer support.
This year I have also set Millennius’ sights on overseas markets including the UK, USA, NZ and Hong Kong. The business model is easily replicated in each of these markets.
At the end of the day, I love technology and the positive impact it has on people’s daily lives. I knew that this passion could combine with a business model that would share my love of technology, but at the same time expand that enthusiasm to more people through cheaper pricing by cutting out the middlemen. It’s not a new or unique concept, but the Internet and online retailing have made it a profitable reality.
Tips for SMBs entering online retail
Invest precious marketing spend wisely: From a marketing point of view, I’ll be ramping up Millennius’ social media presence. It’s an important tool for building brand awareness and trust. I’m not a big believer in traditional media and advertising for reaching customers about products – it has its place, but should be used sparingly and strategically by retail start-ups and SMBs, mainly due to its high cost and hard to track return on investment. Social media campaigns should be trackable down to every last click. A tightly budgeted, well targeted public relations campaign can also yield great results.
Have the right attitude: When people ask me for advice on how to establish an online business, I tell them they just have to try it for themselves, but stick to it. Many great business owners have failed once, twice, or even more before succeeding but at each attempt they learn new lessons about how to do it better next time.
Take and use advice and services from experts: Whilst I’m succeeding in the planning and sales side of the business, I employ others who are experts in their fields to assist with Millennius’ growth. I use outsourced graphic designers, web designers, copy writings, lawyers and accountants to provide what they are good at for the growth of my business. This allows me to work on my business rather than in it 100 percent of the time.