“There are only so many TVs you can sell a customer”: Ruslan Kogan tells why he’s expanding into 15 new categories
Thursday, January 8, 2015/
Online electronics retailer Kogan has quietly launched at least 10 new private label brands, expanding into categories such as pet supplies, camping and outdoors, men’s grooming, health and wellbeing, and children’s wear.
Owner Ruslan Kogan told SmartCompany the move to expand into different category ranges was part of the growth strategy of the company, which is worth around $300 million.
“We have built a very effective business model getting our products from the factory to consumer as effectively as possible,” says Kogan.
“We were able to scale and make profit from selling TVs. We’d be one of the only companies in world to make profit from that, because there are such small margins [in TVs]. So we knew we could scale the processes to any vertical and add profit,” he says.
Kogan’s new brands include pet product label Pawever Pets, vitamin and supplement label Nutrivance, baby and toddler line Bubbli and camping and outdoor brand Komodo.
The brands were launched quietly over the last few months and Kogan says there are plans for at least 15 labels altogether. He says the retailer has gone from listing around 400 products on its site, to more than 24,000 in recent months.
While Kogan says the expansion has meant hiring new employees, taking on category managers to facilitate its move into new product areas, overall the transition from predominantly selling consumer electronics was relatively easy.
“The processes and the technology remain the same no matter if you’re manufacturing a TV or manufacturing a tent,” he says. “The hard work has been done in the last eight years, creating those processes.”
Kogan says these private labels now represent the largest slice of the company’s revenue.
“They are the fastest growing area of the business. Some of them are huge industries – the vitamins industry is a huge industry, the power tools industry is a huge industry,” he says.
“There are only so many TVs you sell a customer. We are enjoying our product range expansion.”
Kogan says the retailer is basking in the glow of its “biggest” Christmas yet, thanks to the new ranges, and has even bucked the traditional post-New Year slowdown, saying the spike in sales has not ended yet.
“We’re just getting started and we expect to keep growing these categories,” Kogan says of the future.
“Any consumer, no matter what product they are after, will know to come to Kogan.”