Xero Shoes Update: In 2021, We Hit $33.6M In Net Sales
This is a follow up story for Xero Shoes. If you're interested in reading how they got started, published over 6 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
I’m Steven Sashen, Co-founder and CEO of Xero Shoes. We make addictively comfortable, lightweight, casual, and performance shoes, boots, and sandals that health- and fitness-minded men and women wear for everything from a stroll on the beach to running ultra marathons to climbing Kilimanjaro to competing in Olympic sports.
In 2021, we did $33.6M, net sales (as an SEC reporting company after completing a successful Reg A+ equity crowdfunding raise in 2017, we can only reveal statistics that we publish at this link and our Q2 2022 filing will be completed by the end of the month).
Tell us about what you’ve been up to. Has the business been growing?
Even with supply chain and logistics issues, and the global economic headwinds, Xero Shoes continues to grow rapidly. From 2020 to 2021, net sales increased by approximately 43%.
To support this growth, we’ve expanded our entire team, from the warehouse and Customer Happiness Team to the marketing, product, sales, operations, and finance teams.
We’ve moved from an agent-led manufacturing model to factory-direct. We’ve launched XeroShoes.eu (and soon will take over XeroShoes.co.uk). We’re selling in China through a partner there. And our wholesale business has grown thanks to the exceptional results we’ve delivered in that channel.
As an example, in 2019, REI ordered 4,000 pairs of our Z-Trail sandals, to be delivered in 3 batches over 2 months, and displayed at 36 stores. In between the 1st and 2nd shipments, they asked for another 800 pairs. Between the 2nd and 3rd, they asked for 600 more. After they got the 3rd, they asked for the remainder of our inventory.
In the stores we have in the EU, we regularly get large initial orders, followed by even bigger follow-up orders within just a few weeks.
We pay exquisite attention to our online advertising ROAS, tracking independently the results of top-of-funnel, bottom-of-funnel, branded, and non-branded campaigns. We aim for a 3x ROAS for non-branded, TOF... and a 15x ROAS for branded and/or BOF.
We’re starting to explore other marketing channels, like CTV. And we now have an in-house PR manager who thinks she failed if we don’t get 3-5 new media placements per week (she’s clearly mistaken).
In short, even with the global and local challenges, we continue to see significant growth thanks in large part to providing products that change people’s lives and bring them (and their friends and family) back to re-purchase.
What have been your biggest challenges in the last year?
The biggest challenge we’ve faced this year has been managing the growth of our internal teams and making the move to a factory-direct manufacturing model.
On the team side, finding the balance between giving new employees autonomy and the ability to demonstrate their expertise, with the transfer of specialized, institutional knowledge has required us to develop new systems and procedures to ensure that nothing falls through the cracks, or that money isn’t spent haphazardly.
Regarding the factory move, the challenge is that making Xero Shoes requires processes and attention to detail that most footwear manufacturers have never done before. It always takes time to convince a factory that the designs we send them are, in fact, the way we want the shoe to be made, rather than the way they’ve constructed shoes for every other company they’ve worked with.
Happily, we have team members on the ground in those factories who have guided them through the transition.
What have been your biggest lessons learned in the last year?
The biggest lesson we’ve learned is how to identify whether a new employee has fully grasped the unique and novel ways our business functions rather than letting them try to apply the playbook they’ve used in the past.
The other lesson we’ve learned is how to rapidly and inexpensively test new marketing initiatives, and equa,lly quickly iterate and optimize what we’re doing.
More, we’ve discovered – quite happily – the value of adding a level of management to each team that not only keeps their respective team on track and accountable but interacts with the other managers to keep a 360-degree view of the company and our ongoing initiatives.
Know your numbers inside out and backward so you can make informed decisions about what and when you can spend money to support your business.
What’s in the plans for the upcoming year, and the next 5 years?
We’re seeing more and more highly visible personalities – athletes, celebrities, etc. – discover the comfort, benefits, and fun of Xero Shoes. And we’re seeing continued adoption of our products in retail all around the world.
We’re launching an exciting collection of new products – both casual and performance – that will allow us to expand into new markets.
And, we plan to move into a larger facility to handle the growth of our internal team.
Silly as it may sound, we’re simply doing more of what we’ve been doing for the last 13 years: making people aware of the life-changing benefits that Xero Shoes provides and helping them find a way to get our shoes on their feet so they can have that “OH, wow! experience.
What’s the best thing you read in the last year?
This is going to sound counterintuitive, but the best things I’ve read have been articles revealing the amount of greenwashing in the footwear and apparel industry.
I say this because, for at least 4 years, I’ve been describing how companies in our industry have been misleading customers with fake “green” stories.
I think honesty and transparency about what is and isn’t possible in the sustainability domaiareis critical, and I was glad to see well-researched articles that shattered the mythology about this topic.
These reports supported our initiatives to use fewer materials and less energy in production, to make products longer-lasting to keep them out of landfills and to continually look for new materials that provide a genuine benefit to the environment.
Advice for other entrepreneurs who might be struggling to grow their business?
There are only 3 things to do:
- As quickly and inexpensively as possible, prove that you have a genuine market (i.e. get people you’ve never met to give you their hard-earned money, and make sure there are enough of them to sustain your business)
- Know your numbers inside out and backward so you can make informed decisions about what and when you can spend money to support your business
- TEST everything to see if it works or not, scales or not, can be improved or not
Are you looking to hire for certain positions right now?
The positions we need to fill change almost monthly, given our growth rate.
- We always need people to join our Customer Happiness Team (many of whom have grown into other positions in the company) and warehouse team
- A talented, conversion-focused copywriter
- Additional web developers at varying levels of skill – from handling basic Wordpress functions to a full-stack developer to a Director of E-commerce
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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