Bootstrapping a $10 Million E-Commerce Business: Seismic Audio CEO Steve Acree (Part 5)

Sramana Mitra: Talk to me a bit about where your revenues are today. We are getting to the end of 2015. What number are you going to close at this year?

Steve Acree: In 2012, Amazon approached us. They wanted to purchase directly from us. That has beefed up the revenue this year. Last year, we did just over $8 million. Normally, we see a big bump at Christmas. If the percentages hold true compared to what we’ve done in the last years, we should be able to hit $10 million this year.

Sramana Mitra: Terrific. How much is eBay and how much is Amazon? What’s the distribution?

Steve Acree: About 40% of our sales come from our website. 20% is Amazon Direct. About 30% is eBay and Amazon marketplace combined. The other 10% are the BestBuy, Walmart, and Buy.com. It’s slow but it’s actually doing very similar numbers to what Amazon did when we first launched on Amazon back in 2007.

Sramana Mitra: Between eBay and Amazon, which one is more effective?

Steve Acree: It’s almost like a race. One month, Amazon’s better. The next month, eBay’s better. Overall, Amazon does do better. I contribute that to Amazon buying from us and then selling our products as well. Three years ago, Amazon was killing eBay by a ton every month. Ever since Amazon’s been buying from us, our Amazon marketplace sales have dropped off.

Sramana Mitra: How many people do you have now?

Steve Acree: There are 20 of us including myself.

Sramana Mitra: What are the functions of these people?

Steve Acree: I have four technicians. If your item is damaged or if you have a warranty issue, you send them back to us and we repair it in-house. If you’re a church and you call in saying, “I’ve got a 60-foot ceiling and we sit 250 people.” My people would design and set up everything. I’ve got three customer service guys who are also DJs and bass players, so they can also do tech work. They process the orders over the phone.

I’ve gotten away from what I wanted to do, which is the HTML design and SEO. I’ve got three guys who handle the in-house web design and listings. I’m now more of a manager. I’ve got another musician here who handles all of our social media. I’ve got another guy who does our photography. Then we’ve got another musician who essentially writes the copy for the website. Then I’ve got the warehouse crew who does all the shipping.

Sramana Mitra: Is there anything else that you want to add?

Steve Acree: I’ve been frugal. I always put it back into the business. If I had to close this down today, I would have absolultely zero debt. When I first ordered the inventory, I had no clue how customs worked. The container was shipped and came in to California. They said, “We need to get this cleared through customs.” I said, “Go ahead and clear it.” I had not clue how it worked. I had to bring out the Yellow Pages at that time and find somebody. They told me that I owed about $1,600 for duties and taxes. I’ve spent every dime I had just to get the inventory here. I tried to pick up extra shifts to get money.

It came to a point where it was a Thursday night and if I didn’t have the money by Monday, I was going to be penalized $125 a day. I told my roommate, “I’ve got about $600. Can you pass out this flyer and we’re going to have a Black Jack party at our house.” I was 23 at that time. We invited all kinds of people to our party. Two days later, we had almost 300 people at our house. We ended up making up $6,000 at this party. On Monday morning, I was able to pay for my containter and have it delivered.

Sramana Mitra: Extremely resourceful and creative maneuvering. Thank you for your time.

This segment is part 5 in the series : Bootstrapping a $10 Million E-Commerce Business: Seismic Audio CEO Steve Acree
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