Discover how four founders were inspired by their needs and wants as parents to create three thriving e-commerce sites.
By Sramana Mitra (Founder, One Million by One Million)
The e-commerce model of business allows entrepreneurs to have greater flexibility in their lives. That is probably why we see several parents launching home-based businesses, and some of them scale to much bigger outfits.
Of particular significance are entrepreneurs selling baby products online. Here are three inspiring stories of parents who brought their passions and creativity to online retail and are now running successful e-commerce ventures.
Smocked Auctions: Creating an Online Market for Sample Sales
Smocked Auctions sells children’s smocks and other clothing through comment-selling on Facebook. It was started by two friends and entrepreneurs, Amy Laws and Nicole Brewer.
They met in 2008 while trying to get back in shape after having their first children. They had a lot in common – their sons were of the same age and they soon had little girls. They became great friends and it was in the summer of 2010 while attending a sample sale in Dallas that the idea of doing business together was born.
The wholesale showrooms in places like Dallas and New York purchase sample sets from manufacturers and at the end of season, sell off the remaining stock through sample sales. The sample sale that Amy and Nicole attended was for children’s smocks and outdoor play clothing and they thought the idea of shopping that way was brilliant.
The clothes were their children’s sizes and the prices were great. They thought they could host a sale, get some great clothes and also provide a great service to their friends. They had their first sample sale in August of 2010 and sold 700 units for $20,000.
For some friends who could not attend their sale, they took pictures of clothes left over from the sale and posted them on their Facebook pages. Within hours, people they didn’t even know were showing interest. That was when they decided to start auctioning through their company site on Facebook.
Their auction model is a cross between eBay and Craigslist. The price does not increase during the auction and there is no outbidding. The first person to comment for that size gets to buy that item. In their first year, they brought in $1 million.
As moms, Amy and Nicole understood the product and the market well. They were passionate about their products and wanted to share the shopping experience with their friends and customers. Their personal taste resonated with that of the customers. They offered great quality at great price points. They soon brought in their own label to control the style and volume of the clothes.
RuffleButts: Can’t Find Something? Make it Yourself.
When Amber Schaub started children’s apparel company RuffleButts, she was not a parent yet but was planning to become one. She had left her job and wanted to start her own business. The idea for the company came when she went to a store to buy ruffled bloomers as a gift for a friend. The saleslady told her they didn’t have any and wondered why they did not carry them because people came in looking for them all the time. That is what spurred Amber to get into this specific industry and start RuffleButts.
Amber did not have a design background but designs all the clothes for RuffleButts. She researched and studied how to design, get samples, and how the retail industry works. She even took a sewing class. She would draw things up and take her designs to a pattern maker who would convert them into a paper pattern. She would send those paper patterns to the factory where they would cut the fabric based on that pattern.
Amber adds, “I designed from a common sense perspective. I just put myself in the shoes of a mother who will be purchasing and I asked myself what would be important. It has to be soft, it has to hold up in the wash, and it has to have quality. I could not produce bargain apparel, but I still wanted it to be available and affordable to the masses.”
Amber and her husband Mark invested $40,000 to start the business. She worked on getting a full collection produced and launched her site with e-commerce capabilities in August 2007.
For about half a year, they operated in red. Amber worked hard on getting publicity for the business. Luckily, she got an opportunity to do an event at the Golden Globes with a few celebrities and their babies. Some of the celebrities were impressed, supportive and that catapulted her brand.
In late 2008, she had her first child and around the same time retailers like Nordstrom contacted her for her products. Soon, Target and mom and pop stores across the country followed suit because customers were asking for their products.
In 2009, gross revenue was $375,000. In 2010, they crossed a million dollars and her husband left his job and joined her to maximize the opportunity. In 2013, their gross revenue was $5 million.
Steals.com: Niche Deals for the Whole Family
Steals.com is a daily deals website that caters to women in four niche areas – babies, scrapbooks, kids and women. They are branded BabySTEALS.com, scrapbookSTEALS.com, kidSTEALS.com, and sheSTEALS.com, respectively. They launch one new “steal” every 12 hours for high-quality products at 40 to 80 percent off the manufacturer's suggested retail price.
Founder Jana Francis decided to become a entrepreneur after the birth of her third daughter. She had always been frugal and on the lookout for great deals. Her friends called her the Dotcom Princess, as she would tell them where to go online for the best deal. While looking for ideas to start a new business, she realized that there was no e-commerce site in the baby space that would tell you the story of the product, why you wanted it and what problem it solved for you.
It took 18 months for Jana to go from concept to creation while working a full-time job with three children. The month before they launched the site, she took two weeks of vacation and went to a baby expo in Salt Lake City where she got 160 people to sign up for her email list. The night before the site was launched, she emailed her family, friends and everyone on that list to share the website and spread the word.
Today, they have 375,000 email subscribers and have shipped 1.7 million orders to date. In their first year, revenue was about $650,000 and the next year, they did $2.4 million. They launched a new site every year and in the fourth year with four sites, their revenue was $16.4 million.
Jana uses a niche talent pool of women like herself who are mothers of young children. Her staff is mostly women and 25 percent of her employees have had a baby in the past two years. Her buying team is full of talented women who are good at product selection and are tuned into their audience. She has also recruited some of her top customers and fans. Plus, most of her customer service staff can work from home for 30 hours a week.
Jana mentioned, “I have two employees who brought their babies with them to work today. We use our team’s babies on our website as models and we actually sign the release paperwork for that. It’s a lot of fun for our employees. For me, it is very rewarding to know that the situation I dreamed of for myself is being provided for so many moms in Utah who would not have a job if they were not working here.”
These case studies reiterate my thesis that the next generation of the web will focus on two specific elements: context and the user. Entrepreneurs who are parents are perfectly tuned into a niche segment of moms and dads—users that are particular and passionate about the products they buy for their children. They’re able to give parents what they want because they’re parents, too.
This post is an excerpt from Sramana Mitra’s book, From eCommerce To Web 3.0.
What inspired you to launch your startup?
Image credit: Yarkovoy via Shutterstock.
About the guest blogger: Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology.