Jeremy Bouris started his online business with an idea to sell audio and visual equipment to consumers. He quickly honed his business model, focusing on specialised, high-end equipment.
His assumption was that the high-end of the market wouldn’t have been affected as much as the low-end of the consumer range. He was right. The business is turning over more than $6 million. Bouris spoke to SmartCompany about how he’s kept his retail business alive and thriving.
I was an accountant before I worked at JB Hi-Fi as a finance director. But I decided to branch out on my own. Back in 2007, online was a huge growth area, but it was very hard to compete because the companies like JB Hi-Fi were getting such good deals.
The other problem was that suppliers don’t want to work with online-only businesses; they want the visibility of being on a shopfloor.
It was disappointing. I didn’t lose a lot of money out of it, it wasn’t a big loss. But it was still a good learning experience.
I noticed there were a lot of brands not in the Australian market. There are only so many because it’s quite small compared to other parts of the world, and other brands weren’t exactly being handled so well.
Focusing on supply, we were able to increase the presence of one brand fivefold. We presented more brands with the opportunity to import and we’ve managed to grow the business.
For us, we’ve found the more traditional businesses have been a better opportunity. A lot of people talk about structural change in the electronics industry, and there is, but a group like JB Hi-Fi is in the perfect position for online sales because they have such buying power.
Most of our customers are enthusiasts: People who have nice homes and spend quite a lot of money on them, or just the casual fan that wants an amplifier.
A lot of businesses are facing the toughest conditions they’ve ever seen. But there are many doing okay, and maybe some of the retailers that weren’t innovative enough are suffering more than others.
We operate on a low-margin business. We have quite a lot of service costs because we’re selling a technical product. We need to provide a lot of really good pre and post-sale report. We need to differentiate ourselves in that way.
I really love the challenge of running this type of business. Certainly the first year of getting set up is hard, building that market share. We’ve had to provide exceptional service, and then we face operational changes as well.
But we’ve been able to grow steadily. We’re getting more percentage of buying power from each store.
We do have limited opportunities because this is such a small market, a specialist market. And it’s tough out there at the moment, but we’re continuing to grow strongly and we’re doing very well.