There seems to be a wave of startups allowing people to customise purchases; Shoes of Prey do it for shoes, Evolvex for furniture and JellyBeanBikes for two-wheeled transport. But providing custom products can be challenging, particularly when it comes to the technical side, says Pascale Helyar-Moray, founder of StyleRocks; a startup selling customisable jewellery.
Helyar-Moray says StyleRocks offers a mind-boggling three billion unique jewellery combinations; allowing you to choose the type of metal, the colour, the carat, add-ons, engraving, different stones, and the finish.
Developing the back-end technology to support customisation proved too much for the first web contractor Helyar-Moray engaged. She soon realised her website wasn’t going to be delivered as planned, or on-time. To-ing and fro-ing over money, the contractor asked for a fee double the original, before Helyar-Moray cancelled the deal and engaged accelerator BlueChilli to finish the development work. The BlueChilli developers took two hours to understand the concept, compared with the two months of work the other group undertook.
“It became clear to me the contractor didn’t have the capacity to deliver what I needed,” says Helyar-Moray.
“Along the way I met with BlueChilli and Pollenizer. I fired the contractor and engaged BlueChilli.”
Managing suppliers: giving equity helps
The StyleRocks site acts as an interface for consumers. Orders are provided to a manufacturer which produces the custom jewellery. Helyar-Moray won’t say who the manufacturer is, only that it’s the largest jewellery wholesaler in Australia. The wholesaler has an equity share in the startup, as does BlueChilli, and another ‘passive’ angel investor.
Providing equity to those with a stake in the business has helped make sure everyone involved is fully committed, says Helyar-Moray, as there is a financial incentive to make things work. There are other benefits to having a close relationship with your manufacturer. The arrangement means that StyleRocks receive better credit terms, has lower minimum order requirements, and cheaper production costs.
“They were known to me, although I still had to go in with a strong business plan and pitch the idea. For them, its the first dip of the toe into retail.”
She says participating in the 2011 MEGA entrepreneurship program helped practice pitching for the first time, refine the MVP and get in front of potential angel investors. Now the focus is on building strategic partnerships and growing sales. StyleRocks will partner with RosesOnly from November onwards, offering a voucher everytime someone purchases flowers.
“At Christmas time, people are buying flowers and jewellery for the same reason. We’re looking at doing a distribution deal with another retailer too.”
Improving sales: corporate vs. consumer
The site has now processed more than 60 individual transactions and some larger corporate orders from companies like the Commonwealth Bank. In terms of volume, sales are split 60/40 between corporate and consumer at the moment. Individual sales are averaging around $325, says Helyar-Moray, though the goal is to increase this. She’s hoping monthly sales increase 10-fold over the next 12 months.
Selling to corporates is a different game as it’s much more about relationships says Helyar-Moray. The economics are also better. As you’d assume, it’s cheaper to manufacture 100 customised pieces that one unique item.
“Companies will buy jewellery to say thanks to staff, for events or as client gifts.”
Pitching for investors
Helyar-Moray has been hitting the pitch circuit recently. She delivered the winning pitch at TieCON Sydney a few weeks back, and says the investment will help recruit a product manager to look after the ordering process and customer service. Her pitching skills have been honed over the past year. She says no pitch is ever the same, and you need to make sure you adapt your presentation to suit the audience.
For example, Helyar-Moray has found male audiences respond differently to female audiences. Men may be interested in the site but tend not to be as familiar with the current challenges of finding jewellery.
Any further investment raised now will help boost marketing efforts for the site, which currently include PR, online advertising and social media, brand ambassadors and affiliate marketing.
“We want to bring on some more high-profile brand ambassadors.”