How Me and My Dad Make $100K/Month Selling Personalized Gifts
Hello! Who are you and what business did you start?
Hello, my name is Taha. I am a Turkish entrepreneur located in Houston, TX. Although I have a major in Mechanical Engineering, I am currently running my own business online: Lucas Gift
I have a team of 7 and we make & Sell Personalized Gift items such as leather keychains, wallets, wooden nursery signs, name necklaces, greeting cards and much more.
Our top selling item is Personalized Leather Keychain. It is the first product that we started selling back in 2017. Actually, my dad started an Etsy shop to sell hand sewn iWatchbands and later he added the keychain for more volume.
Then we ended up with $100k/mo business mostly due to our keychain models.
What's your backstory and how did you come up with the idea?
My dad loves leather items and perfumes. When I was a child none of them were attractive or important to me. He always had nice leather shoes, wallets, belts and always wore long-lasting fragrances.
After moving to the US, he didn’t have any job, so he started sewing some leather items to sell and afford his life. Of course, things were slow at the beginning, that's why he was also working on a day job as well. It was a fragrance shop! What a coincidence. That's enough detail about this side of the story.
After I came to the US in 2020, we joined forces and started selling online more seriously. I have added more items like leather wallets, wooden pen & pen sets, jewelry items and with selling in multiple channels, we quickly scaled the business, thankfully. He then decided to quit his job and be with me full time in 2022.
Since we make personalized items and they are mostly gifts, we need to be very careful on every item we ship for 100% satisfaction. My dad has a disciplined background with some major managerial skills and I have research & development characteristics. So, it wasn’t so hard for us to raise a disciplined and carefully crafting teammates. With over 10,000 reviews, we average a 4.9-star rating, strong right?
The next step is to scale our business to be a potential marketplace platform for such personalized gift items.
If you can lower your costs and selling prices, that is the best thing you can do about your business. It is also proven that if customers do not feel ripped off on their first purchase, they feel happier with the purchase and tend to buy more.
Take us through the process of building the first version of your product.
As I mentioned earlier, I am a mechanical engineer. So, it is easier for me to set up the machinery and operate them. The personalized gift business requires machinery to do customizations such as laser engraving, custom printing, laser cutting etc. We didn’t have much difficulty while bringing our first products to the market.
Actually, we started our business while we were living in a small apartment with my dad. The downstairs was our inventory area (garage), and we were fulfilling the orders from our living room.
My dad was manually cutting and hand sewing some leather stuff that he brought from Turkey but we needed to have more volume items like leather keychains and wallets. So, we connected with manufacturers abroad to bring finished products and only do the personalization here.
Of course, manufacturing is a painful process but after a couple of samples and feedback, we were able to bring quality items to our shop.
Here are some photos of our first setup:
Describe the process of launching the business.
We first started selling using marketplaces such as Etsy and Amazon. It is easier to take a place on a saturated marketplace rather than opening a website. So, we have chosen that way. It took about 2 weeks to get orders and more and more customers. I also kept seeking for more marketplaces to sell.
Later on, I joined several others like Mercari, Jane.com, Pickyourplum etc. But they did not end well. Mercari sales disappeared after a couple of months, Jane.com declared bankruptcy (we lost around $4k funds inside when they closed), Pickyourplum also got sold to Retailcloud and sales did not get any better unfortunately.
That’s why we needed to open a website to have a real and reliable business. Lucasgift.com was established in 2020 and to this date I am actively investing on the website to improve functionality and visitor traffic.
We did not have any credit cards or loans. Both me and my dad are Muslims and getting finance with interest is forbidden in our religion. So, we avoid such business actions. Thankfully, all of our capital investments and compensations are out of our pocket.
Since launch, what has worked to attract and retain customers?
Price. It is the most driving factor in terms of sales and customer satisfaction. If you can lower your costs and selling prices, that is the best thing you can do about your business. It is also proven that if customers do not feel ripped off on their first purchase, they feel happier with the purchase and tend to buy more.
For example, at first, we were selling our leather keychains around $21 plus shipping and having 2-3 orders per day. However, after we ran a 30% discount only, we started getting almost 20 orders per day. That is a more than 400% increase in revenue!
We have come a long way in pricing since then. We apply many different strategies for pricing and shipping options and thankfully they work pretty well.
To attract traffic, we used Instagram ads, Youtube ads, Google ads, you name it, we tried all. It was a painful and costly lesson for us, we experimented with them all, you can NOT make profit with ads. We would be ok for breakeven when running ads but no, they are way too expensive and results are not promising on developing the business.
For example, we run almost $69,000 worth of ads last year and below is our revenue:
So, we closed all ads, and Lucasgift made a promise to avoid any ad spending for its business operations. We only value organic search and word of mouth.
Currently, almost 95% of our business is running through Etsy and Amazon.
For example, last year, we made $446,744 only on Amazon channel, pretty good right? No, it is not! The ad spending is terrible, Amazon is like a seller monster!
Amazon is great as a buyer only. It is a monster for sellers! Ad spending for last year was $131,031 and the fees were $75,030. If it was without that $133k ad cost, Amazon is a pretty strong sales channel. However, we continue to sell anyway.
How are you doing today and what does the future look like?
Lately, sales were going south mostly due to the economy, but hopefully we will start some uptick with Graduation gift season in April.
When we are below a certain revenue level, $60k/mo, we are not profitable, losing money! This is a sad fact but our business has seasonal peak times as well.
For example, we hit $180k/mo revenues in the Christmas season.
At around $80k/mo revenue, we are profitable. Look at our Amazon sales chart for last year, we peaked at $8,170/day revenue on Dec 11, 2023. Christmas time is wild in the gift industry.
I believe we are still in the standard profit margins like 15%. Sadly though, we make personalized items and competition is considerably low, but the profit margins are not huge.
To be honest, I include all of the new product investments to our costs and we need to update our product lineup to stay afloat as a business. For example, we recently added Nursery Signs, Custom Apparel and some Customized Jewelry items to our product lineup but they are currently costing us too much money and decreasing our profitability. Hopefully, they will pay off their investment and open a new source of income.
We are in the phase of settling down on investments, decreasing efforts on marketplaces and waiting to attract more customers to our website. Because marketplaces have not grown much for the last 2 years and you cannot grow a business without increasing your sales. Since we have no other channels to sell more, something new is needed and we expect it to be Lucasgift.
Starting something always has its challenges. Because without starting, you won’t go anywhere. Set a specific goal and start doing it.
Through starting the business, have you learned anything particularly helpful or advantageous?
I hate competition, I am not built for it. However, in order to survive you need to compete, right? Not exactly, if you can bring something different to the table, you can survive with your uniqueness as well.
When we first brought keychains to the market, we faced such a saturated market and keychains were sold very cheaply on Amazon like $7-8 max with free shipping as well.
However, our keychains were very different, the design,the concept, everything was quite different than what was on the market. We started selling them without free shipping, engraved keychains were almost costing customers $14 to $18 each, and customers have been happy to pay for them. Pretty quickly our reviews got up and we built a new customer base for our personalized products.
So, bring something different to the table, a different design, a different approach to market your products so that you won't feel always competing with some copycat random dudes 🙂
Actually, if you think you are built competitive rather than a creative person, maybe it is better for you to compete, everyone has their own character.
What platform/tools do you use for your business?
We recently added the Forums feature to Lucasgift via the Xenforum app and I loved it. I did add forums for the sake of organic traffic because Google now prioritizes forums sites like Reddit and Quora. The more traffic we have for Lucasgift, the more revenue it will generate!
Anyway, the app enables us to make every potential customer contribute something on our website. They can open topics, discuss something in the comments and easily share and like the posts. It can drive a massive amount of traffic to our website. Hopefully, I see some potential there.
Also, I love the general flexibility of Shopify, it is a great platform to develop a business. You just need to be careful on which apps you are choosing for your needs. They are 3rd party software, so you might see some buggy ones, avoid!
What have been the most influential books, podcasts, or other resources?
My dad! He is a hard-working man and actually working motivates him more than anything. If I like working as much as he do, we would have skyrocketed our business but I am always lazy 😅
He motivated me to start this business, open the website, move the business to a bigger space, and get employees. He is my driving force and after accelerating with his support, I feel like we can achieve our goals together.
I would like to also thank our devoted teammates for making the business reliable and on track. I love them! This also motivates me to look for more potential to grow our business.
Advice for other entrepreneurs who want to get started or are just starting out?
Starting something always has its challenges. Pray and wish for the best and start! Because without starting, you won’t go anywhere. Set a specific goal and start doing it. It can be very easy and no-capital needed businesses like selling books on Amazon, Print-on-Demand t-shirts or whatever suits you.
After you build something, you will start looking for ways to improve your business. You will then look for some decor items to sell for example, or some accessories for teens. Business about teens has some potential. Once you see some potential selling and earning, you will look for more volume. Hopefully, you will get many successes and live well.
Just remember, not always everything goes as expected, that should be your rule of thumb while starting something new. You may not be profitable, things can go south, just stay focused and motivated and always look at your metrics in general, do not focus on the negative side and get demotivated.
Looking at monthly analytics is usually the most helpful one, if not yearly.
Try your best but do not stress yourself to the point you give up!
Last but very important note: Save at least 50% of your annual profit aside in the case of an emergency. Do not invest all at once! In my case, it was my dad’s savings that I used for emergency situations. I owe him so much 🥹
Are you looking to hire for certain positions right now?
The economy is tight! To increase the profits, I started to make engraving again. It has been a year and a half since I left the daily engraving job after my dad brought some teammates to do the job.
However, recently sales got slower and in order to keep us more profitable, we needed to reduce some labor hours thus, I need to work! That will save us around $5-6k/mo!
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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