Bootstrapping a Niche E-Commerce Venture: Elite Fixtures CEO Steven Annese (Part 5)

Sramana Mitra: It looks like that at the end of 2006, you were back to being able to have multiple distributors for your business and were able to get back to your top ranking in Google bids. Is that correct?

Steven Annese: Correct, in Google and Yahoo!. That was probably about 2007.

Sramana Mitra: What else happened in 2007?

Steven Annese: Between 2007 and 2009, we started building volume and focusing on key brands. At that point, I was probably open direct with about 70% of the manufacturers that we sold.

Sramana Mitra: Where was the revenue at this point?

Steven Annese: Revenue in 2009 was probably about a million.

Sramana Mitra: What are the next major inflection points between 2009 and 2015?

Steven Annese: We had a dip after 2009. Our peak was probably about $1.6 million at that time. Then the housing bubble happened. We saw a dip in the business. Come to about 2011 to 2012, we actually were about half the size that we were. We were probably doing about $700,000.

Sramana Mitra: How did you recover from that?

Steven Annese: The same way anybody else tries to recover. You put your head down, get to work, and you get up everyday and try to do your best and advance the business. From 2012 to the following year, we more than doubled. In 2013, we doubled again.

Sramana Mitra: Is there anything that you did at this point that is worth mentioning from a tactical point of view?

Steven Annese: There were so many things that went on. When we started to shrink, what we wanted to do was to stabilise. We went out and reached out to more brands. We looked at synergistic brands. When I first started, I was doing maybe 15 to 20 brands. Then in 2011 to 2012, we probably were up to 60 brands. That’s what propelled the growth. Pay-per-click, obviously became much more expensive. The competition got more fierce. It was a combination of things of why the business was shrinking. The economy and the housing bubble were directly correlated to that. Competition was also a factor. Things started popping up left and right. Showrooms tried to get into the business because it was almost like Field of Dreams. The old adage was, “If you build, they will come.” That was no longer the case in those years. SEO started playing a big role. Social just started to come into play. Bing and Yahoo! had their agreement. Yahoo! was faltering in search and Google was dominating. But Google was getting much more expensive. While there were new channels of marketing opening up, the traditional e-commerce marketing channels were getting much more expensive.

Sramana Mitra: Up to this point, did you build the bulk of your business on the strength of Google PPC?

Steven Annese: Yes.

Sramana Mitra: In 2009, it started shifting?

Steven Annese: I would say between 2008 and 2009.

Sramana Mitra: What was the next major customer acquisition channel that you put in place that started really converting for you?

Steven Annese: We started going after the B2B market. We realised that if we can move some volume, even though the margins are smaller, the volume is greater. The relationships build better with the manufacturers because they see volume. It’s a win-win.

This segment is part 5 in the series : Bootstrapping a Niche E-Commerce Venture: Elite Fixtures CEO Steven Annese
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