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The Ins and Outs of Online Retail Ownership An often asked question in our mailbox: "I'm about to launch a childrenswear webstore, can you give me a few pointers?" There are so many variables involved in opening any business - add the special concerns of online children's retailers - and our answers could take several months to complete. So, we've turned to four successful entrepreneurs whose insight can help shed some light on the challenges of online childrenswear and accessories sales. Two women are owners of wholesale and retail hair accessory companies: Jonna Courson is the president and designer of UNIQUE DESIGNS BOWTIQUE and Andrea Chafetz owns and creates hair ornaments for ANDREA'S BEAU. Lori Cataquiz is the proprietor of the upscale Internet boutique COUNTESSINA; and Michelle Cowan is the owner of online retailer MY LITTLE DUCKS, a boys' clothing store. Each of the women explained her preparations for launching: the classes she attended, if any, as well as financing and advertising. Each gave tips on inventory and stocking; and they described the reality of business ownership compared to the fantasy. Speaking of the future, some of retailers plan on hanging in there for the long haul; one has codified her business so it's appealing to a buyer if she chooses to opt out.
GETTING STARTED: TINA BARRY: HOW WERE YOU EMPLOYED BEFORE YOU LAUNCHED YOUR BUSINESS? DID YOUR FORMER CAREER HELP PREPARE YOU FOR INTERNET RETAILING? Lori Cataquiz (Countessina): Prior to being a mom (now with four kids) I was a personal trainer, in Washington DC. I shopped a lot, and even dabbled on Ebay. So, really, I had no prior retail experience. Andrea Chafetz (Andrea's Beau): One might not think that being a high school English teacher would prepare me to launch a hair accessory wholesale and retail company, but it did. In the classroom, I started each day with a concrete plan and a clear mission to convey to my students my standards of excellence and aesthetics, and evaluate performance. I employ the same skills to train, encourage and critique individuals to make a quality product for Andrea's Beau. I say this somewhat tongue-in-cheek, but I would like to believe there is poetry in our products. Michelle Cowan (My Little Ducks): Before I had my children, I worked in several different areas of retail and advertising. I was a personal shopper, buyer and had done television and radio commercial production. Jonna Courson (Unique Designs Bowtique): Before launching my business, I was employed as a purchasing agent for a large poultry company. It's a long way from poultry to children's fashion hair bows. I learned a lot from having to track companies down, negotiating and purchasing items. When I started my own business, that experience in sourcing, proved useful.
TB: DID YOU TAKE CLASSES; WORK WITH SOMEONE ALREADY IN THE INTERNET BUSINESS; OR, FIND OTHER WAYS OF EDUCATING YOURSELF ABOUT THE CHILDREN'S INDUSTRY BEFORE YOUR LAUNCH? Lori Cataquiz (Countessina): I read as much as I could about online retailing. I had dabbled in Ebay. I went to a few children's trade shows in Chicago and New York to view lines. I had no formal training, just my passion for children's clothing. I had a few people familiar with web commerce that offered a lot of information. My husband is an MBA and consultant and he threw some ideas around as well. I also met a great web designer for my initial website (it has been redesigned since) who helped as well. Andrea Chafetz (Andrea's Beau): My husband had experience in launching Internet retail companies and therefore he took the lead in starting up our wholesale and retail website. We also spoke with lots of people in the online sales business to better educate ourselves. Michelle Cowan (My Little Ducks): I did not take classes. I spoke to a few Internet retailers but the best experience was scouring the Internet to see what was out there. I decided to focus on boys' apparel and accessories because I didn't see anyone concentrating in the boys' market. Jonna Courson (Unique Designs Bowtique): I didn't take courses. I gained a lot of experience from making hair bows to match my daughter's clothing.
TINA BARRY: WHAT MADE YOU LAUNCH YOUR WEBSITE? WHEN DID IT DEBUT? Lori Cataquiz (Countessina): I had recently moved to Montreal, Canada with my two children (both under two) and my husband who is French Canadian. I had a very hard time finding boutique style clothing for my girls. At that time, Canadians had no real source for upscale American or European clothing. We didn't even have Gymboree in Quebec! But I did find Deux par Deux, Effigi, Romeo & Juliette and a few other Canadian brands here. I also found it difficult for Canadians to shop online. This search, and love for fashion, prompted the 2003 launch of Countessina. Andrea Chafetz (Andrea's Beau): Over 21 years ago when I started, the avenues for spreading the word about our company were limited. At great expense, I hopped on planes to meet buyers and regularly FedExed sample sets around the country. In addition, I visited top Washington, DC department stores such as Neiman Marcus and Saks Fifth Avenue to persuade the buyers to take our accessories on consignment; I hoped that our successful sell-throughs would lead to a national account, which they did. With the advent of the Internet, building a web presence was the next logical avenue to expose us to the wholesale market (Chafetz sells her items online to consumers as well). We launched our website in October 2002. The site provides us far greater exposure than the previous methods. Nonetheless, it remains a challenging creative endeavor, with much iteration past and future. Michelle Cowan (My Little Ducks): My Little Ducks debuted in early 2005. I had been looking for a business I could run while staying at home with my two boys. Jonna Courson (Unique Designs Bowtique): I launched my website in January, 2004 to make it easier for my current customers to place orders and to expand my business nationwide.
FINANCING: TINA BARRY: HOW DID YOU FINANCE YOUR LAUNCH? WHAT ADVICE CAN YOU GIVE NEW COMPANIES ABOUT FUNDING? Lori Cataquiz (Countessina): I started slow, spending money first on web design then purchased a few low cost products, bibs and shoes. Financing was done entirely with savings. I would recommend that everyone proceed cautiously and spend wisely in the beginning to see if this is something they want to do. You need to budget your money on clothing, advertising, supplies, overhead, and freelancers (for web design). Many beginners believe that a website is cheaper than a brick-and-mortar outlet but a lot of money goes into design, advertising and marketing. If the world doesn't know you're out there, no one will buy from you. Andrea Chafetz (Andrea's Beau): We financed our web launch ourselves. It was and continues to be an expensive process. We have a professional web master; all our photographs are professionally taken, so it's a costly and time-consuming process. Michelle Cowan (My Little Ducks): I financed My Little Ducks on a wing and prayer. Actually, I had a little money in savings, which I used to get started and then put my entire inventory for the first year on a credit card. Jonna Courson (Unique Designs Bowtique): I was already selling some of my products locally. I used money from those early sales to finance my website. My advice to new retailers is to start small and use the money from sales to reinvest and grow.
INVENTORY: TINA BARRY: HOW DO YOU DECIDE HOW MUCH PRODUCT TO PURCHASE PRIOR TO EACH SEASON? Lori Cataquiz (Countessina): You will only gain back what you put into the business. I decide how much I want to earn that season (spring is very slow) and budget the money accordingly. My personal life also guides me. There was a season when I was having my baby, so I didn't spend too much on inventory. I think being able to set the pace of your days is the real bonus to having your own store. I learn about inventory every season. In the beginning, I only offered shoes and baby tees. Then I branched into girls' clothing. As time goes on, I learn more about what customers like, and more importantly what customers want from my store. That knowledge helps me focus on what's selling, rather than buying randomly hoping for a sale. I now specialize in providing a large selection of Deux par Deux, as well as having it available for special order. Andrea Chafetz (Andrea's Beau): Regarding stocking, our general procedure is to stock small amounts of raw materials and inventory for each style we sell. In some cases, we keep larger inventory for our best selling raw materials and finished products. Best selling items include pieces clearly selling out during one particular season, as well as items that have sold consistently year after year. Michelle Cowan (My Little Ducks): When it comes to inventory, I don't have a set plan for how much to purchase, it depends on the lines. I have some core collections that I stick to and others I pick up and drop depending on the season. Jonna Courson (Unique Designs Bowtique): I generally have an idea of how much material to buy prior to each season. I can always order more depending on the volume of orders we receive.
TINA BARRY: WHERE DO YOU PURCHASE YOUR INVENTORY? AT NATIONAL TRADE SHOWS, REGIONAL SHOWS, THE INTERNET? Lori Cataquiz (Countessina): Originally, I went to the ENK Children's Club markets for inventory. It wasn't easy in 2003 to find a designer willing to sell to a webstore in Canada. Now, I have manufacturers contacting me, as well as local sales reps trying to earn my business. Andrea Chafetz (Andrea's Beau): For our wholesale business we attend sourcing shows, we comb the Internet, we find materials everywhere and anywhere. Michelle Cowan (My Little Ducks): I come to New York for Children's Club in August. The timing works out well for me - I can order cruise and spring/summer while sneaking a little "me" time in before school starts. I finish my spring/summer ordering at the Florida Kids Expo in September. Jonna Courson (Unique Designs Bowtique): I look to the Internet and other wholesalers for materials.
TINA BARRY: WHAT ADVICE CAN YOU OFFER NEW INTERNET RETAILERS ABOUT STOCKING? Lori Cataquiz (Countessina): I have a few pointers for new retailers: 1. Don't go overboard. Don't feel that you need to buy multiples of each size. Just because you like it, doesn't mean everyone else will. Once you establish a relationship with a designer you can reorder during the season. Reordering is your chance to purchase multiples of those items you know are selling well. 2. Ask sales reps how items are doing. Most reps will tell you what is selling well, and what isn't. 3. When selecting designers, always ask about minimums. You don't want to pick up a new manufacturer with a 1,000-piece minimum without trying them out first. And find reliable drop-shippers for gift products and accessories. It adds variety to the store and you don't have to stock the product. Michelle Cowan (My Little Ducks): Keep the amount of space you have available for display (on your website) in mind when you're considering inventory. And don't over order on a new line until you see how it performs.
WHAT SELLS AND WHAT DOESN'T: TINA BARRY: WHAT'S YOUR BEST SELLING PRODUCT CATEGORY? WHAT'S THE TOUGHEST ITEM TO SELL ONLINE? Lori Cataquiz (Countessina): My best selling category is girls' dresses. Pants are a difficult sale. I think pants have different cuts and fits and are generally something that needs to be tried on. Andrea Chafetz (Andrea's Beau): Headbands are our best sellers, especially right now during this wonderful headband craze. Customers love our selection, from hard to soft, wide to thin, all made with exceptional trims and ornamentation. The toughest items for us to sell on the Internet are Communion and Special Occasion pieces. Because every computer screen displays color differently, customers can be reluctant to trust matching colors on the Internet; for Special Occasion accessories, people want the hair accessory and the dress to be a precise match. This is where customer service plays a strong role: whether by e-mail or phone, we work closely with customers to discuss their color concerns so that we can steer them to the best selections. Michelle Cowan (My Little Ducks): My best selling category is boys' apparel for sizes four to 12. I also do well with toddler shoes. I have not been as successful with gifty items such as blankets and burp clothes. Jonna Courson (Unique Designs Bowtique): Our funky bows are big sellers. Customers love the different ribbon combinations and the big bow look. Luckily, we don't have any trouble selling anything in our product line.
THE REALITY OF BUSINESS OWNERSHIP: TINA BARRY: DO YOU HAVE A PARTNER(S)? HOW DO YOU SPLIT THE LABOR? DEAL WITH ANY CONFLICTS? Lori Cataquiz (Countessina): I don't have partners. I have part-time staffers that work for me as assistants, shipping and receiving orders. No conflicts there. Andrea Chafetz (Andrea's Beau): My husband Marc Chafetz is my partner. Obviously, working with one's husband isn't ideal for all couples (however, historically, it was the case out of necessity). I am in charge of design and product. My husband does finance, website, marketing, shipping, EDI, (and whatever else I order him to do). Michelle Cowan (My Little Ducks): I'm a one-woman show! Jonna Courson (Unique Designs Bowtique): No partners.
TINA BARRY: IS OWNING YOUR OWN BUSINESS WHAT YOU EXPECTED; OR ARE YOU SURPRISED BY CERTAIN ASPECTS OF THE WORK? CAN YOU GIVE AN EXAMPLE? Lori Cataquiz (Countessina): I think every business owner who is passionate about her work will tell you it can consume you. Working at home can be a burden at times; it's great to be able to work in you're pjs, but "work" is always there. I can easily be at my computer all the time, as early as 5 a.m. and as late as 10 p.m. But, I always try to move away from my desk when my kids get home from school. Andrea Chafetz (Andrea's Beau): The process always surprises us. It's incredibly hard work and it's difficult to make obvious judgments about where and how to focus. We are always reconsidering our direction. Still, we love having our own business. Michelle Cowan (My Little Ducks): I am just so proud that I created a legitimate business on my own, that continues to fulfill and excite me. I feel lucky that I can stay home with my boys and still have something else that is "mine". After they go to bed I sneak in a few hours of work that is more enjoyable than any work I used to do. Make no mistake, it is hard work, but it's on my terms and I love it! My kids are fully on board as well - they are my models and product testers. And my three-year-old likes to be the "package man," dragging boxes out for delivery. Jonna Courson (Unique Designs Bowtique): I never expected the amount of time that is invested in running your own business. As an owner, you oversee a lot of job titles so there's always something that needs attention.
THE FUTURE: TINA BARRY: DO YOU THINK A LULL IN THE ECONOMY WILL AFFECT YOUR SALES? IF SO, WHAT KIND OF CHANGES, IF ANY, WILL YOU IMPLEMENT? Lori Cataquiz (Countessina): I don't think high-end children's clothing will be impacted too much. We market to a specific crowd, and I think they are always going to be willing to spend for their children. I think designers understand that market; there are so many new manufacturers offering "couture" collections for kids with pieces in the $180-$250 range. That includes high-end denim. Andrea Chafetz (Andrea's Beau): Historically (we have been in business for twenty-one years), we do well in downturns. An accessory is a relatively inexpensive way of dressing oneself up. Also, dressing a young daughter is every parent's delight: this fleeting experience is not given up lightly even during a lull in the economy. Nonetheless, we are fiscally conservative. We don't plan on making major changes. Michelle Cowan (My Little Ducks): I don't think my business will be affected by a slowdown in the economy. Babies are always being born; kids always outgrow their pants. I try to offer a variety of price points in all product categories. Jonna Courson (Unique Designs Bowtique): The economy may affect our sales. If our sales begin to slow, we may offer more discounts on certain items.
TINA BARRY: WHERE DO YOU SEE YOUR BUSINESS IN THREE-TO-FIVE YEARS? Lori Cataquiz (Countessina): My husband and I recently put a lot of money into programming and a redesign of our store so that it can be easily maintained. Prior to this, all the web pages needed to be coded individually. One of the reasons we also did this is to make our store "sellable." Owning a webstore is truly an enjoyable job, but at this time I think I've taken Countessina as high as I want to take it. With a bit more money invested in marketing and inventory Countessina could do extremely well, as it does rank high in Google and Yahoo searches. Like I've said, I put into it what I want to get out of it. I still have a family to raise, so I don't want to invest too much on inventory. In a few years I would consider selling the business, but it will be hard, as it is one of my babies. Andrea Chafetz (Andrea's Beau): We are in the continuing process of establishing a brand name that means something to both retailers and consumers who care about quality and flawless design. Michelle Cowan (My Little Ducks): I am looking forward to controlled growth. I just added a "tomboy" section for the not-so-girly girl and I am continuing to add more clothing for larger boys' sizes. Jonna Courson (Unique Designs Bowtique): We plan to continue expanding our products and sales in the U.S. and internationally. -Tina Barry
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