Starting A Travel Backpack Business And Growing To $20K/Month

Chez Brungraber

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Published: November 1st, 2018

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Chez Brungraber

Founder, Gobi Gear

$20K

revenue/mo

Founders

Employees

Gobi Gear

gobigear.com

from Bend, Oregon, USA

started August 2014

$20,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

WooCommerce

customer service tool-icon

Zendesk

analytics

Sumo

sales

SumoMe

affiliate

AvantLink

fulfillment tool-icon

CliqueHere

Discover what books Chez recommends to grow your business!

Want more updates on Gobi Gear? Check out these stories:

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

Hi guys! Thanks for stopping by. I’m Chez, the founder of Gobi Gear. I started Gobi Gear about 4 years ago to make organization easier and more fun, specifically focusing on the outdoor adventure and travel markets. Rummage less, explore more!

Our gear bags are designed to make staying organized easy, no matter where the adventure takes you. We take pride in selling high quality gear - expecting our items to last. We are a 1% For the Planet partner, and we use no plastic in our packaging - having saved over 70,000 plastic bags (and counting)!

Our first product was known as the Hoboroll - a super cool bag that works as a stuff sack or a day bag, with 5 inner organizational compartments and a secret stash pocket. Made of ultralight, water-resistant nylon, this bag fits in the palm of your hand but is ready for adventure at the drop of a hat.

Even though we design our gear for the outdoor adventurer, our fans also use our bags in everyday use, from the gym to their kids soccer games. Thus we are launching a brand new line of every-day bags! Ready to serve anyone with an active lifestyle, from mom’s needing diaper bag organization to gym-goers and kite-boarders alike!

The best measure of success for isn’t just the bottom line, but rather walking through an airport and seeing a stranger with a Gobi Gear backpack on. Or learning that the owner of other, big brand name outdoor gear companies have heard of you. The idea of outfitting all kinds of people with our gear, all across the world, and putting smiles on their faces - that is what success is to us!

starting-a-travel-backpack-business-and-growing-to-20k-month

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

I started Gobi Gear just before my big trip through Asia. My husband and I had a 3 month trip planned - also known as “travel until the money runs out”, and we were starting out with a 100-mile trek in the Nepali Himalaya. We had already decided we wouldn’t use porters and instead carry our own gear.

The best measure of success for isn’t just the bottom line, but rather walking through an airport and seeing a stranger with a Gobi Gear backpack on.

I had also committed to collecting botanical specimens, as part of my volunteering for the local University in Kathmandu. Never collected plants before? It’s waaaay slow. Ever the impatient hiker, I had to come up with an idea to still be able to cover a lot of ground even while collecting. I realized that the slowest part of the day would be packing/unpacking every morning/evening, and looked for a solution to make this go faster.

When I was not satisfied with the solutions out there (stuff sacks mean scattered gear, plastic bags rip and = trash later) I decided to just make my own. I thought a stuff sack with inner dividers would be great - all my gear in ONE place, yet still separated. I got after it on my sewing machine, using leftover curtain fabric, and made the world’s heaviest stuff sack. But it worked!

Thanks to my nifty divided stuff sack, I was always ready to go, knowing where my gear was. Packing was a non-event. I was ready to go each day before everyone else! Lots of time for flowers.

I showed the bag to other trekkers, who immediately wanted their own. Shortly after our trip I decided to put the idea to work, and created a version that could sell to other folks who also wanted to stay organized while on-the-go.

Soon Gobi Gear was born, and I embarked into a crazy world that I had never know - branding, marketing, web design, graphic design - whoa! I have a dual degree in Biology and Economics, and thus knew nothing of how to grow a company. My full-time job at the time was botanical work (and still is). Gobi Gear has been an incredible journey of learning and being pushed outside comfort zones.

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Describe the process of designing, prototyping, and manufacturing the product.🔗

Turns out… manufacturing is one of the hardest parts of running a business. Not only does inventory mean you are cash poor (or vice versa), but any delays or issues with manufacturing can drastically hurt your bottom line.

Gobi Gear started slowly, very slowly, as I was limited to a small initial investment ($20K), meaning a small quantity order to begin (3000 units). In retrospect this was good for us - it allowed us to not overextend early, and maneuvering to meet customer wishes was easy.

We found our first China factory on Alibaba, through months of research and prototype samples. We have also worked with agents, local to China and the USA, and in the end, decided it best to just work directly with the factories.

Manufacturing is one of the hardest parts of running a business. Not only does inventory mean you are cash poor (or vice versa), but any delays or issues with manufacturing can drastically hurt your bottom line.

Manufacturing is a complex thing, especially for our ultralight product line - we have to specify everything down to the type of thread, and lead-times on fabrics can be up to 9 months. This complexity, however, is why we found it best to ditch the agent - things got lost in translation, and the questions were still just as numerous, only filtered through the agent and thus adding to the complications.

A manufacturing disaster

In fact, we had an agent out of Boston that turned from great into total disaster, from one thing to the next. They were late on a very important order of 25,000 bags - meaning they had to air freight the goods instead of ocean freight them.

Then they messed up our packaging for 5000 units: a hole had to be cut into a cardboard tube to allow for a hang-tag, and the samples we received had burn marks and ash stains.

I brought this up as a concern and the agent assured me it was only for sampling; the final product would not use that technique. But of course, when we finally received the goods, what do we have? Burn and ash... And not just the packaging, but it damaged the bags inside, rendering them unsellable. It was a huge waste of time and money.

Later we then found that all of the products in one color scheme had the cord-lock and drawstring mis-threaded, so we had to pay USA labor costs to get those fixed, too. To be fair, the agent did pay for a lot of these issues, but wasted no time in pointing out “errors on both parties”, implying a lot of this was our fault. All we did was place an order…

Playing the waiting game

When Gobi Gear gets ready to place an order, we now work directly with the factory, and hold the production spot 6 months in advance with a down payment, even if we aren’t sure exactly what we are making! Then we start sourcing as many of the product parts as possible, such as gray drawcord and cord lock, leaving the other details for later.

Word of advice: The factories are just about always late on big orders - if they quote you August, you count on September. Just the way it is. Never have a promise date of early March if you’re EXW-China - their Chinese New Year is not only several weeks long, but there can also be a lot of employee turnover, meaning upon vacation return, there aren’t enough workers to finish the job in time.

Once production is done, and 166 emails have changed hands, the goods get shipped! And then the real fun begins.

Describe the process of launching the business.🔗

Just launch it! So many people want it to be perfect the first time - and it probably won’t be. Once on the market, your customers will have ideas or thoughts that you’ll want to add to the next production round - so just get started! That is for us what helped - we dove it!

Launching Gobi Gear was a moment of excitement and trepidation - as well as one full of opportunity to learn. We built our first site on Dreamweaver, long before Shopify. And here is the thing - it could always “be better”, but honestly, it’s probably good enough! I fussed and tinkered so many times I finally broke the site, and had to just go back to basics. *New rule: if it is too hard, we don’t do it. *

The first orders that come in are so exciting! Even if it is friends and family… and then the one dude whose name you don’t know. Who is this hero??!

Over time we re-launched our website on Shopify, but eventually left that for WooCommerce and WordPress, as they allow much more flexibility in design (and hey, gotta put all of my coding skills to work now, right?). Might go back to Shopify. TBD :-)

We also love Amazon - first we sold as “seller fulfilled”, but I still recall the day we got approved for Prime. What a difference! Now we ship boxes of 100s of units to Amazon and they do the rest (okay, not that easy, as they make errors too, but it is still awesome). Amazon is a huge marketplace, and who doesn’t live Prime?

To get started, I financed the business with my savings. As the business grew, we sold our inventory (recovered our cash), but then needed more inventory, and thus more cash. The best platform was Kickstarter! We launched in July of 2014, and raised over $80,000! This was great cash as it allowed the funding of a new inventory order, as well as other things such as a new patent, a website redesign, and paid for a good PR team for a year.

From the beginning, Gobi Gear has always been very good at paying its own bills from its sales; but pushing growth forward is where the extra cash comes in - always finding that next customer.

So we learned three important things about launching and money spent:

1 - Do it as cheaply as possible.

It is so easy to spend it big to get started, but you don’t need to! Word-of-mouth, referral campaigns, and 5-star reviews are great ways to get new customers. Good customer service keeps the previous ones coming back for more.

2 - Have multiple products or colors.

As long as they are curated and not just any old thing. It really helps sales, as customers like choices.

3 - Get your brand out there from the start!

We did not know this, and didn’t have a logo that was prominent or even have our website on our packaging! How do you find us? We now have a backpack with our logo on the outside - this is huge.

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

Google, Facebook Ads

Marketing used to be far outside my comfort zone, but I am getting a lot better at it. And we really have tried it all - Google Ads, Facebook, YouTube, paid PR and social media teams to do it for you.

In general, I have not seen a good ROI on most paid advertising. It could be that my ad graphics and messaging are not spot-on, so they don’t convert as well, or that our products are not super photogenic.

It could also be that our average product sale is $20 - not a lot of meat on that bone. Our ad spend hit $16k/mo at one point, and barely moved the needle. Bummer. At least we tried!

Amazon Ads

We have had success with Amazon ads, as well as with retargeting ads on Google. We spend about $200-600/mo now, and get and ROI of 1.5-6x, depending on the season. Advertising on Amazon is so much easier than Facebook or Google.

You don’t add graphics or copy. You can only bid on keywords, and they do the rest. Either it works, or it doesn’t. I actually love the simplicity. I find better than changing keywords is changing the time of year that you run the ads - some months, like September, are just quiet, so we don’t bother running ads anymore.

Amazon Sales

Amazon itself is a fascinating sales channel - they do a lot of the work for you, and you get in front of a huge marketplace.

But there are knock-offs, and Amazon has mixed up our inventory more than once, then shut down our account because customers were receiving products “not as described” - well, yea, because they mixed them up!

Detangling these issues can cause a lot of headaches. Overall? Worth it.

Editorials

But our biggest success for attracting new customers has been bloggers and editorial reviews of our product - we’ve had some as big as the Chicago Tribune, Men’s Journal (print edition), and Cheap Flights work with us! That brings the product to new eyes.

Pop-ups

Another huge marketing tactic that turned a corner for us was pop-ups on the website. By not having a pop-up, visitors who aren’t ready to purchase are lost forever.

This may seem “duh” now, but years ago it wasn’t so. Sumome made it very easy to get your own pop-ups that integrate directly with automatic email campaigns.

SEO

There are other things that I feel are necessary but harder to quantify: SEO is something you always need, and could spend thousands if you aren’t careful - or you can download Yoast (Wordpress sites) and do it yourself. Better than nothing yea? After obtaining numerous quotes on SEO, and deciding it was unaffordable, I went with Yoast and took it upon myself to learn all about it.

Moving forward, I think Google, with its overly complex platforms and too many ways to track tiny variations of the same thing, will be losing ground to Amazon and Facebook - which are much easier to advertise on. So, I did the SEO myself, and didn’t worry about the rest. I am focusing my energy instead on easier platforms. If it’s too hard, I don’t pull my hair out trying to make it work - I just move on.

Viral Contest

When launching a new product we have found that viral campaigns or giveaways really help get a solid email list. Before our last Kickstarter we gained 2500 new email addresses through a viral campaign & landing page we made through KickoffLabs. We sent out an initial eblast to 5000 people, and got 2500 new email addresses - so a 50% increase!

Email List

Once grown, our email list has been the best for sales. We cherish it, nurture it, offer special discounts and sales, and encourage social sharing and referrals to friends.

Customer Service

Taking good care of customers is important to us and helps our sales - many times I personally reply to customers, and not just about their particular issue, but I ask for pictures of their last vacation or find out what adventure they’re looking forward to. Gobi Gear is a company, but it is also an extension of me, and I am just another adventurer like you :-)

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

Our gross margins are 58%, on average. This is after cost of goods, shipping and fulfillment costs, and include a blend of B2C and B2B sales.

Most of our business is B2C (direct to customers), through our website and Amazon. While we do have retailers and work with subscription boxes from time to time, we enjoy the higher margins of direct sales.

One variable for us is ad-spend, which as mentioned before is usually relatively low, but can increase during holidays or during a Kickstarter event.

We have a new website visitor rate of about 85%, and they usually browse for over 90 seconds, with a bounce rate just under 50%. Monthly traffic averages 2500 users.

Once we get new customers to our website, we do the following:

1. Obtaining their email

We use SumoMe to offer various discounts or sales in the form of a pop-up. We have an average of 4% opt-in during most of the year, and 15% during Black Friday and Christmas sale events. Even if the customer doesn’t convert right away, we can follow up later with emails, offering incentives.

2. Upsell

As the customer adds goods to their shopping cart, we have little messages that appear letting them know they “only need to add $15 more to get free shipping”. This helps us sell more goods in each order, keeping fulfilment costs down.

3. Follow-through

After the customer makes a purchase, we send them follow-up emails to ensure they are happy with what they received and suggest uses for the product they just purchased. We feel this helps them make a more meaningful connection to the company they just made a purchase from.

Email marketing is huge

I mentioned it already, but our email list is our biggest converter! We use ActiveCampaign to enter customers and potential customers into email funnels, sending them various messages based on their behaviour - we can get more targeted this way, instead of sending out a generic message to everyone over and over.

Our daily routine involves checking new orders and getting them shipped out, replying to customer service messages (if any), some social media posting, outreach to a few key retailers/checking in on current ones, PR outreach, and planning for the release of our new product line in 2019. Perhaps a little accounting if I need a nap (just kidding).

New Product Line

Gobi Gear will be entering the lifestyles marketplace - taking the high-quality, durable gear to the everyday consumer, with a new line of affordable, multi-purpose organizational day bags and tote bags.

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

You know your brand better than anyone

In the beginning, it is easy to outsource, thinking that other people will be better than you are at various tasks. But in the early stages it behooved me to do those things myself. Outsourcing costs money, which is tight for a start-up. And they’ll never be quite as good at selling your brand as you are. I know because I tried it both ways. Others might seem more professional or have all the “tricks”, but everything more genuine when it comes from you - and early on, that is what customers want, to connect with you and your brand.

It also helps you really dive in and understand what your value proposition is and what you are providing to people. And it allows you to be a better manager later, having some understanding of the task you have just assigned.

Resisting outsider money

To this day, I am still resisting the offers of investor money, and instead keeping it all in-house and in family. That is really hard on the bank account sometimes, and we are strapped for cash more oft than not, but, you learn to get scrappy, get clever, and get by. No one owns us - I have no one to answer to, and that freedom is worth a lot!

This might not be the best path for everyone; we are a small family business and I am happy to keep it that way. Aggressive growth would be very hard without extra inputs from investors.

Manufacturing is always going to be a headache

It seems that no matter how on top of it we are, things always come up. Whether it is hiring the wrong agent, or having the factory deliver an entire month late (and missing your subscription box deadline and losing the entire sale - eek!), these things are out of your control sometimes and the best you can do is damage control. And that in itself can be very important. How you respond to issues can make or break your business.

We have learned over the years to 1) work with the factory directly for as long as possible; 2) add in 2 months cushion; and 3) have a contingency plan!

Don’t try to do everything perfectly

When I first got started, I would get paralyzed sending out a MailChimp eblast to my 146 subscribers, because I didn’t love the font, or the border color, or maybe “this image could be brighter”. In the end, what mattered was that I sent the email in the first place.

Fretting over the details - from emails to product features - wastes time. Just get it out there. Don’t overextend yourself on your first product production. Just go for it! Your customers will tell you what they think. Then you can make necessary changes.

Helpful Skills

I taught myself web coding and design, graphic design, marketing, branding, and how to automate as many processes as I could. These skills have greatly helped me because I do not need to outsource, and now that I’ve given up on perfection, I am very happy with where the company stands today and the lack of cash burn.

What platform/tools do you use for your business?🔗

We have tried both Shopify and WooCommerce. I prefer Woo as it is more flexible and you host your own domain, which is better for SEO.

When you are on Shopify, your site is actually “website.my-shopify.com” - meaning Shopify gets a lot of your SEO. That being said, Shopify is way easier to use as everything is all part of the package deal.

With Woo, you need to download plugins and connect the dots. We are considering a homepage in Wordpress and a checkout cart in Shopify.

Sales Platform: WooCommerce
3rd party apps: Abandoned cart; X-theme as it is the most flexible and responsive!
Email Marketing: ActiveCampaign
Email Capture: SumoMe
Affiliate Program: AvantLink
Internal Organization: Basecamp
Fulfillment: CliqueHere & In-House
Customer Service: ZenDesk

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

I really like books that pull out my creative flow. There are of course books that were great for me as it directly relates to business, Poorly Made in China is one, but in general I find it more valuable to get lost into books about the botanical explorations of the Amazon, or journies by motorbike through the Congo. These type of books allow me to relax and step outside of my world, and then later I find it easier to focus on the creative flow of Gobi Gear.

I also dive deeply into daily meditation, yoga, and exercise. These activities help me clear my mind and give me the ability to tackle issues that may arise, as well as have the right perspective going forward.

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

Just go for it! The products you see today are not the first iteration - but you have to start somewhere.

Listen to others, but in the end, remember to hear your own voice. You will know deep down what is best for your company. At least for me, it seemed that everyone had an opinion. Some were right, some not. And be wary of those just trying to sell you their services. Their advice may be skewed (naturally).

Don’t worry about the mistakes - and use it as a chance to bond with customers. Some of our biggest fans today were our angriest customers - good service and old fashioned caring turned them around.

Are you looking to hire for certain positions right now?🔗

We are not looking to hire, but anyone who is interested in marketing/branding and has clever ideas for us - we’d hear you out, and possibly work out a gear-for-work exchange.