“We ran into two giant hiccups,” Khoozani told me. “Everything we sell comes from specialty providers. Some large players, like the chain stores, gobbled up all of the capacity and raw materials. Three of our most important suppliers dropped us.”
To put it differently, Khoozani faced obscene demand with no inventory. What was his solution?
“I put up an entirely new infrastructure for the production of iron weight plates in Vietnam. So far as I know, I am the first to do it for export from that nation. It took plenty of money, time, and energy.”
He and I recently discussed these improvements and much more. Our whole audio dialog is embedded below. The transcript that follows is edited for length and clarity.
Eric Bandholz: Selling gym gear throughout the pandemic might make you one of the wealthiest people in ecommerce.
Kaevon Khoozani: Theoretically, yes. I could be poor shortly, but it is going good now.
Bandholz: We are all rich in life. This show isn’t about the monetary price or get rich fast. Your website is Bells of Steel. How hard is it to get gear? I am a weightlifter myself. Pretty much everywhere has been sold out.
Khoozani: For sure. And the demand has not actually stopped. This month is going to be our biggest ever.
Bandholz: once I got into ecommerce, sending heavy things was something I avoided. You sell products made to be heavy. How can you manage that shipping procedure?
Khoozani: It is tricky. UPS has high thresholds for package dimensions and weight. Quite a number of our products are designed especially to fit within these UPS guidelines. A lot goes into our packaging design. In Terms of fulfillment, I use a 3PL in Indianapolis. In addition, I ship from my warehouse and staff in Calgary, Canada.
Most everyone who works for us is into strength training. A number of our warehouse men are big and physical.
Khoozani: Canada has roughly the same population as California. Bells of Steel has existed since 2010. There were no competitors here at the moment. Therefore it was an advantage. Imagine being the first business in California to sell bumper plates online. We could catch a lot of the Canadian marketplace and a great deal of organic Google traffic.
Amazon’s not quite as notable here at the U.S. It is much easier in Canada and much less costly than in the U.S. To this day, our divide is roughly 70-percent Canada and 30-percent U.S., although the U.S. share is growing quickly.
Bandholz: Whenever Beardbrand ships into Canada, it costs an arm and a leg. It is tremendously cost-prohibitive to serve Canadian customers. What about sending from Canada to the U.S.?
Khoozani: It is a lot easier and cheaper to ship from Canada into the U.S. than vice-versa. There is a difference in the tax and duty regulations, for any reason. I can send anything less than $800 in value to the U.S., and it goes right through. No obligation, no nothing.
However, you will get dinged on everything and anything sending from the U.S. to Canada. I won’t order things from the States right because I’ll wind up with these crazy duty accounts, or it gets stuck at customs for three weeks, or it never gets whatsoever.
Bandholz: Where are your products manufactured?
Khoozani: Everything’s made in China and, more recently, Vietnam. Everything comes in containers directly to Calgary and Indianapolis.
Bandholz: a great deal of large companies sell weight training gear. How can you compete?
Khoozani: Our large unique is we are the best deal for the price. There are competitions with thicker and more durable steel and possibly a better fit and finish. However, my barbells are the best dollar for dollar. We also offer a whole lot of unique designs which are typically unavailable to users. By way of instance, one of our best selling products is your Belt Squat Machine for under $2,000. Just one other company sells it for this price. And everything else on the market is commercial grade, which is extremely costly.
And we do not sell on Amazon. Here in Canada, perhaps 10 percent of our pre-pandemic earnings came from Amazon. And the pandemic hit. I chose not to give up a single percentage point to a thing which does nothing for my brand whenever there’s just disgusting need. And I really don’t know if we are ever going back. I like keeping all those clients on my platform and providing them the best experience I could.
It is not worth it, fighting tooth and nail on the Amazon marketplace.
Khoozani: We ran into two giant hiccups. The first was that everything we sell comes from specialty providers. We do not use trade agents. We purchase barbells from a mill that just does barbells and nothing else. For a few of those factories, we’re a larger customer. For others, we are not.
At the start of the pandemic, some big players, like the chain stores, gobbled up all of the capacity and raw materials. Three of our most important suppliers dropped us. Only,”See you later. Go get your weight plates from someplace else.” But we could not get them anywhere else because nobody was taking on new clients.
So I put up an entirely new infrastructure for the production of iron weight plates in Vietnam. And as far as I know, I am the first to do it for export from that nation. There’s some national production there, but not much export. I moved from the ground up and constructed that supply chain there. It took plenty of time, money, and energy.
The next hiccup was a serious container deficit from Asia to North America. For many years we used a reliable freight forwarder who put up everything. We did not have to pay the cargo until the product came. Then came Covid. It was a frantic scramble, calling forwarders daily, asking,”You got space? You got space? You got space?”
And the cost of shipping containers, even if you’re able to get themhas tripled or quadrupled since the start of the pandemic. Tons of dirty tricks, like middlemen selling VIP space on the containers to get an additional $4,000. Crazy stuff.
It has been tough. We learned the hard way. Ahead of the pandemic, we had been doing plenty of pre-selling. We would inform customers they could get it today we would send in the exact same month. Then Covid hit. We have burned pretty hard. We could not meet those requests with containers sitting in port for months, not able to offload.
We are much better now at monitoring containers and planning stock. We are working much closer with our providers, asking,”How do we optimize your efficiency? If we purchase 100 SKUs, is that going to expedite the production and shipping?”
We have completely researched how we purchase and how we plan our logistics and inventory.
Bandholz: Shifting management, what is your ideal customer?
Khoozani: initially, I was focused on top-line earnings, which all of us know is a ridiculous number. I was hoping to market where I could — retail shops, gyms, home gyms, whatever. Three decades back, we looked carefully at our numbers. It was clear that we had to concentrate on the home gym user. That is our bread and butter. That’s who we will need to cater to. The section has the best margins and the fewest guarantee difficulties. So, yes, our attention is the home user.
Bandholz: Your website’s built on WooCommerce. How do you like it?
Khoozani: Good and bad. I was whining about it just a couple of hours ago. I began on BigCommerce and stayed on this platform for maybe five decades. I can’t remember why I switched to WooCommerce. I believe BigCommerce had jacked their prices. Perhaps I did not like dealing with them . And I met a programmer who offered me on WooCommerce.
Since that time, it has been a double-edged sword. I love that I could do anything with it, totally within my hands. The notion of Shopify or BigCommerce dictating what I sell isn’t good.
WooCommerce has a lot of performance. It is so far ahead. It is somewhat clunkier, but it’s far more features, and it is way more cost-effective. However, the downside is it requires far more maintenance. There are several more bugs. And we struggle with pace, always.
However, I don’t think I will ever change. We are hoping to start a new website within another month or two. It should be a good deal faster. If I were starting over, I probably would go with Shopify. But I’m glad we are on WooCommerce now.
The degree of sophistication we could do with WooCommerce is such a competitive edge. By way of instance, one of my top products is known as the garage gym builder. It walks you through picking a bench, selecting a rack, and picking a bar. And as far as I can tell, there isn’t a great contrast to it on Shopify or other platforms. That item generates most of our earnings. We utilize a plugin, a WooCommerce composite builder.
Additionally, WooCommerce’s product package system is extremely sophisticated. It works in combination with WooCommerce composite.
Another terrific feature is quoting freight prices in the checkout procedure. We utilize cargo carriers to deliver products to clients. However, it’s been a pain to estimate freight charges because none of those companies had a system like UPS does, for instance.
Then one of our cargo carriers generated an open API. A programmer used it to create a live freight-quoting plugin for WooCommerce. Now I can offer clients cargo quoting in the checkout, which is a massive benefit.
Bandholz: Where can people learn more about you and Bells of Steel?
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