Lessons Learned: Entrepreneur not Resting on his Bed Linens

Unlike most entrepreneurs, Gabriel Luis doesn’t have parents who have a small business. His mom is a bank manager and his dad is a mail courier. However, Luis was born — in Fairfield, Australia, a Sydney suburb — with an entrepreneurial spirit.

Determined to earn money, Luis researched a range of passive income companies, such as vending machines and slush beverage machines, for six months before he picked online retailing.

He has a technical background, having worked for five years as a telecommunications technician for New South Wales Railways after completing high school. That experience led him to design and launch a bed linen site.

“I found the first iteration of our Just Bedding site in November 2005 for $5,000 while I was working fulltime,” Luis said.

His sister and business partner Claudia, who had been working at Kennard’s Hire, an Australian gear rental firm, joined him just before their first client order came.

By 2006, Only Bedding’s gross revenue was $48,000. It climbed to $600,000 by 2010, doubling to $1.5 million by 2012. The business is set to clear $2 million in 2013.

Ecommerce Shopping Cart

The original Just Bedding site used the X-Cart buying platform until 2010.

“X-Cart’s file system was cluttered and this made front end layout inconvenient to personalize. It cost about $300 for the source code and weeks of customizing to change to Magento Enterprise,” Luis said.

Open source and customizable, Magento Enterprise includes a huge community of third-party extensions which allow for just about any business need that appears down the line, according to Luis.

“It also gave us complete control of our content, database, and file system,” Luis said.

Web Design

Luis designed the Only Bedding site, after learning programming and design by trial-and-error.

“I learned how to use Photoshop, and browser-generated user interface images using HTML, CSS, and some JavaScript,” Luis said.

The more complicated back-end developments are managed by Luis’ freelance Magento programmer based in Shanghai, China, whom he’s been using for five decades.

“Before him we used a Russian programmer for around two years that we discovered on oDesk,” Luis said.

Credit Card Payments

Just Bedding uses ANZ eGate (a payment gateway) and PayPal for credit card payments.

“Initially, ANZ eGate provided the best prices, though now with our larger volume of transactions we need to have the ability to obtain a better rate than 2.5 percent. We pay about $1,500 to $2,000 in fees monthly,” Luis said.

Order and Inventory Management

Magento Enterprise manages order direction, but Luis used some custom improvements to adapt order workflow.

“We had to reevaluate Magento’s inability to print packing slips before dispatch was completed. Now sales orders are received into the system and then afterwards printed in the warehouse for picking, packing, and transport,” Luis said.

Luis manages stock through Magento but re-orders inventory manually through email. He expects to automate this procedure before the end of the year.

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Hosting

Just Bedding is hosted by Anchor, an Australian firm, using Anchor’s”Complete Support” package.

Luis’ hosting costs have shrunk to $1,300 a month, although he considers”you get what you pay for.”

“The time they save, the access to specialist knowledge, and the amount of care we get out of them easily makes the difference in cost, as well as peace of mind,” Luis said.

“Our past hosting company had us offline for three days when a DDoS attack brought down its network in 2011. I can not see this happening with our current hosts.”

Employees

Luis believes finding the appropriate people is of extreme importance, but terrific gift is either expensive or difficult to find for a startup enterprise.

Gabriel and Claudia had no workers until 2010. This created enormous stress and prevented them from expanding with numerous business areas needing attention.

“I was quite used to working 110 hours per week,” Luis said.

Nowadays they have a picker, customer support assistant, and a marketing and social networking specialist.

“This has improved efficiency and expansion, and enables us to have a more balanced life outside of work,” Luis said.

Search Engine Optimization

Luis considers SEO is becoming less important as search engines become more sophisticated.

“I concentrate on creating beautiful websites that people wish to go to, experience, and discuss, and on generating original content,” Luis said.

He said many outsourced search engine optimization businesses damage their customers’ ranks by using questionable tactics.

“2 SEO firms we contracted with in India and Australia did so despite reassuring us that they only employ white-hat search engine optimization methods. We now only do SEO in-house, which is time consuming, but better in the long term,” Luis said.

Shipping

For national Australian orders, Luis uses Australia Post and Couriers Please, an express delivery company. For international orders, he uses only Australia Post.

He experimented with an Australian delivery gateway, Temando, which incorporates with Magento to streamline the delivery process and save time.

“But, Temando’s shipping rates almost always had added charges well above those originally quoted in its automated system,” Luis said.

He said finding a better shipping deal, particularly international delivery, is a challenge and a potential barrier to growth. International orders include about 10 to 15 percent of merely Bedding’s business.

Product Sourcing

Just Bedding has among the largest ranges of Australian bed linen brands online with approximately 1,500 products, sourced from dozens of local manufacturers.

Using lots of his present providers, Luis recently launched Cushion Room, a merchant of cushions and soft furnishings, to match his bed linen range.

For Only Bedding, he intends to expand into international brands and create his own white-label goods in another three to five decades.

“Right now we’re more focused on obtaining the internet side of things perfected and enhancing the selection of shopping experiences we can provide,” Luis said.

Accounting Software

Luis found MYOB, his accounting applications, wouldn’t integrate with Magento, forcing him to take orders from the site and replicate them at the MYOB software.

In the end of 2010 he found the online accounting solution Xero, which upgrades Magento orders reside with a third party web service named Carry the One, for approximately $50 a month.

“We highly recommend this automatic setup if you are using Magento,” Luis said.

Social Media

“We were late to the party with social media and didn’t start using it effectively before a couple of years after launch, but we give it the attention it deserves now,” Luis said.

Just Bedding markets to its clients via Facebook — that Luis quotes has brought in about 5% of its sales — as well as Twitter, Pinterest, and Instagram.

While the text-centric Twitter has made little impact, Luis has noticed more reply from Pinterest and Instagram thanks to his”image-loving clients.”

Expense Control

Aside from inventory replenishment, warehouse rent, and wages, Luis regards his Google AdWords monthly spend of $2,000 to $5,000 as a fixed cost.

But, Luis and Claudia have learned to not spend heavily after purchasing untested bed linen designs, not to perform a lot of backend website developments too fast, rather than to have excessively substantial budgets on underperforming AdWords campaigns.

Now the pair utilizes their previous month’s performance to gauge just how much they could spend on discretionary expenditures. The top of the list is backend development.

“We would really like to enhance workflow and functionality and make a mobile site by late 2013, but these improvements are labour intensive and require a high degree of costly technical experience outside my abilities,” Luis said.

He admits he prioritizes what, if anything, should be done today, and must force himself to be patient enough to not do unessential developments.

“Not all site improvements are essential,” Luis said.

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Customer Service

Like most successful online retailers, Luis makes customer support his company’s top priority, answering all inbound phone calls, and responding to all email inquiries within the hour.

“This is an inevitable requirement of competing in today’s internet environment — because most opponents either already do so, or at least attempt to,” Luis said.

“However, it bewilders me how some sites have an email contact form because their sole point of contact”

Biggest Mistakes

Luis lists a number of his firm’s most memorable mistakes as getting into unnecessary debt by purchasing inventory that didn’t move fast enough, rolling out site developments too fast, and excessive AdWords budgets that didn’t prove profitable.

“I would also say it was a mistake not having Google Analytics and social media setup from day one, and outsourcing our search engine optimization attempts to untrustworthy businesses,” Luis said.

Biggest Successes

Luis is proudest he and his sister started Just Bedding with no appropriate expertise, expertise, or help, and have developed their own transferable skills as they have built a successful internet business.

“I can now hold my own across several technical ecommerce places, such as PHP, MySQL, JavaScript, HTML, CSS, Photoshop, server management, Magento management, SEO, copywriting, blogging, and business management,” Luis said.

He’s now studying Spanish and German in a college, as he and Claudia aim to enlarge Only Bedding’s reach into foreign markets.