How I Started A $3.6MM/Year Business Selling Designer Women's Shoes

$350,000
revenue/mo
1
Founders
25
Employees
product
Scarpetta Shoes
from Columbus
started
$350,000
revenue/mo
1
Founders
25
Employees
801K
alexa rank
557
followers
3
subs

Hello! Who are you and what business did you start?

Thank you for taking the time to tell our story. My name is Adam Dwidari, and I am the founder of Scarpetta Shoes. We sell designer women’s shoes at deeply discounted prices.

I started this business back in 2009 with $2,000 out of a small space and have since expanded to a 50,000 square foot warehouse. In 2019, we employ 30+ people between our Columbus warehouse and pop-up shops and are continuing that growth into 2020.

Scarpetta Shoes has hit huge milestones in 2018-2019 and saw an overall sales increase of over 200%, reaching $3.6 million in annual revenue. We have expanded our international sales by 400%, currently ship to 60 countries and have an inventory of over 40,000 pairs of shoes.

how-i-started-a-3-6mm-year-business-selling-designer-women-s-shoes

What's your backstory and how did you come up with the idea?

In high school, I had always been interested in owning my own business, though I was always working toward one specific goal. With a family business of optometry in my wheelhouse and an entrepreneurial spirit, my goal was to go to optometry school and build my own business. During high school, I was simultaneously enrolled in an optical dispensing school to have an advantage when I went to college. However, it wasn’t until after my first year at Ohio State University that I decided to switch to actuarial science because it had a wider application.

While completing my major, I was accepted into an internship with MetLife Insurance and was later hired on full-time while still in my sophomore year. However, I soon became bored. In an effort to graduate college without debt, I started selling various items online, acquiring inventory through liquidation sales. I sold everything from video games to rugs; finally landing on women’s shoes. The footwear industry found me, really. I recognized that women’s shoes had the highest demand and were the easiest to store and ship.

You will have 1,000 failures before you have one success.

After 6 years with MetLife and one undergraduate degree later, I decided to jump full force into entrepreneurship and establish Scarpetta Shoes officially. The women’s shoe market is oversaturated with many large competitors. However, I have always stayed true to my vision and retain a meticulously chosen team and Scarpetta Shoes has been able to carve out a niche for itself. We doubled our annual revenue in 2018 alone, reaching 3 million in sales only 4 years after it was established and are on track to reach over $10 million in 2019.

Describe the process of launching the business.

Our business started simply by listing products on major marketplaces. We were able to keep our growth scalable in the beginning because purchasing apparel online was a fairly new concept.

We started in my dorm room with $2,000 selling rugs I bought at a closeout sale and an idea that we could be pioneers of this new online movement. At first, we were ecstatic to break even and within a month we had made our first $1,000 in profit. Fast forward to today and we currently sell on 25 of the world’s leading online marketplaces, including eBay and Amazon. Our sales on eBay are ranked in the top 10% of sales in the footwear category, both domestically and internationally.

After our initial success in eCommerce, my brother and I launched our first website and saw some growth. There were a lot of growing pains as we had no technical help and had to learn through trial and error. It wasn’t until we decided to partner with a 3rd party integration platform to handle our ordering and inventory process that we saw the most growth.

Once we knew we could handle the clear demand for our products that we began expanding our inventory and tripled our customer base in a matter of months. As someone who prefers to keep most jobs in house, taking a risk on an outside company to help manage our expanding customer base was a tremendous lesson in investing in what you want to have happened as opposed to reacting to what you’re currently doing and is something I maintain as we move forward to our new company venture of launching pop-up shops across the midwest.

Since launch, what has worked to attract and retain customers?

Growth is a tricky topic to discuss in matters of eCommerce. Since the market is always changing, expanding and saturating we’ve definitely seen our times of growth and stagnation. We have always maintained the philosophy that we’re going to try a lot of different things and grow what’s working and what isn’t. In my experience, hinging on one idea or only focusing on one platform is a short path to nowhere.

If you stop innovating and trying new things and improving what you’re already doing you will be dead in the water.

One major way we’ve been able to expand our growth is by focusing on having a strong online presence outside of our website and marketplace stores. We’ve accomplished a lot for our community and finding ways to talk about that and partnering with people who share our same vision has been tremendous in getting our name out there and growing our own website.

We’ve put a particular emphasis on Facebook and Instagram influencers as they have direct relationships with their audience and gaining access to that has been indispensable to us. We do almost all of our digital advertising through Facebook as that is a highly engaged audience and it’s easy for us to interact directly with our customers which can be a challenge within other marketing platforms.

In regards to growth, the most important factor is and always has been maintaining some level of control. When you act as a 3rd party seller on a marketplace that can be a challenge. We’ve seen the greatest success with this on eBay as they maintain a more flexible platform and tend to have stronger support for their sellers. Due to this, we’ve been able to steadily see growth and on track to grow by at least 40% on that platform this year alone.

We do also sell on Amazon and have seen success there, but also know that there is very little freedom and your ability to sell can be taken away very quickly which can be devastating to a business. While we have participated in several launches on Amazon such as Prime selling, FBM and FBA and have been successful using those platforms I would always be cautious inputting your full stake in a platform like Amazon.

I do believe Amazon is a great opportunity, despite having fierce competition, but you need to be willing to do a lot of testing to see if the investments are worth the work. For us, Women’s shoes are an oversaturated category and we’re usually competing directly with Amazon so running ads and investing in that way made little sense. Instead, we’ve taken the approach of keyword and SEO optimization and providing more of a specialty selection of hard to find shoes.

How are you doing today and what does the future look like?

Despite being embedded in a highly competitive category, we have maintained profitability because we’ve always offered the highest quality at low prices. In the business of wholesale, you have to focus on quantity to offset the smaller profit margins, labor and in our case shipping costs.

Now about 40% of our profits come from offline business and we are looking to increase that number to around 80% by 2020.

As of 2019, we’ve made a stark shift away from our online platforms and have made our brick and mortar presence a priority. In our experience, people are becoming more desensitized to ads, sponsored products and having the entire internet as an option. We have already shifted about 40% of our profits offline and are looking to increase that number to around 80% by 2020.

This shift has changed our distribution dramatically. We’re fortunate to have steady suppliers and partners and shifting to a storefront has opened up new options that allow us to sell products that previously were not available to us online.

While we still process all of our shoes at our Columbus warehouse, we’re in the process of creating a more agile operational platform that we can make mobile and take from store to store with us. All of these initiatives are evident in Scarpetta Shoes’ milestone metrics. We’ve hit huge growth milestones in 2018, but they are nothing compared to the projected growth in 2019. Scarpetta Shoes is on track to increase sales by 200% and exceed over $10 million in annual revenue.

Through starting the business, have you learned anything particularly helpful or advantageous?

More than anything, I have learned that you cannot just rely on one thing or person for success. You will have 1,000 failures before you have one success. I made this mistake early on thinking that I could just keep doing the same thing over and over and it almost ended the company. I lost some great employees and had to basically start over. If you stop innovating and trying new things and improving what you’re already doing you will be dead in the water.

Some of the best decisions I’ve made as a business owner have been around outsourcing the things that have to be done as daily tasks to free myself and my staff to think about the bigger picture and innovative solutions. I also attribute a lot of our success to the community partners we’ve made. We like being a small company in a sea of big corporations and in that spirit, we like to support local organizations that bring value to people’s everyday lives.

It would be difficult for me to say that any of this has been luck, but I would definitely say we’re in the right business to weather any storm. When the economy's good, people shop. When the economy is bad, people want the best deals. We’ve been able to carve out a niche for ourselves that is sustainable and profitable.

What platform/tools do you use for your business?

The heart of our organization is operational excellence. We’ve been fortunate to have some great partners in regards to that.

We utilize ShipStation, Magento2 and Channel Advisor; all of which have been great partners in our growth. The combination of the 3 has allowed us to automate our ordering process (ShipStation), make real-time changes to our platforms (Magento2) and customize our business to make smarter and better choices (Channel Advisor).

As we stay agile in an ever-evolving market, I think it’s safe to say that email is a dead platform. We’ve been exploring utilizing text campaigns, targeted Facebook campaigns, Instagram and genuine interactions with our customers.

While the world turns to automation and instant replies, we’re taking a different approach. Online has been extremely good to us and will always be a huge part of our business, but we’ve expanded into pop-up shops in 2019. We move from location to location for around 30 days, offer our products and really make a lasting connection with our customers. This interaction has been critical in our growth for 2019 and we believe that these types of personal tools will be a critical part of business as people are inundated with ads and 1,000+ offers for the same product.

What have been the most influential books, podcasts, or other resources?

I have always been a big fan of Sam Walton and what he built. I think I have read every book he wrote or has been written about him and have learned more from his dedication and entrepreneurial spirit than anyone else.

I believe that his mission to offer savings to people to improve their lives has shaped America and I try to carry that mission into my business.

Advice for other entrepreneurs who want to get started or are just starting out?

I do a lot of work with a group called SCORES which helps connect local entrepreneurs with (successful) business owners and my advice to everyone I meet is always do one more thing before you leave for the day. What I mean by that is, whenever you’re done for the day and ready to leave, find one last thing to do before you walk out the door.

This mindset has helped me from my days at MetLife till today as it reminds me that my work is never done. As long as I want to be a successful business owner, I always have to be willing to do one more thing or someone else will come along who is.

The longer I am in business and see competitors come and go, I am reminded that success is not an easy or glamorous road, in fact, it’s quite the opposite. It’s a lot of long days and sleepless nights.

Those that are going to have long term success have to realize that just wanting it is not enough, you have to fight each and every day to maintain it and surround yourself with people that share the same desire to be better than you were the day before.

Are you looking to hire for certain positions right now?

As we continue to grow, we’re always looking for talented people to bring on board. 6 months ago we would have never imagined that our pop-up business would be expanding as fast as it is.

As it stands, we are looking to bring a pop-up shop manager on board to run our shops full time. We know the position will be a challenge to fill as it requires almost full-time travel, but we know that if we remain committed to maintaining our meticulously chosen team that we will find the right person to help us manage and grow that aspect of our business.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Adam Dwidari ,   Founder of Scarpetta Shoes

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