Courtesy of Boy Smells
It’s nowhere near as easy as just hitting a button, especially during a pandemic.
You’d be forgiven for thinking that now, maybe more than ever, it’s easy to run a small business. That where there’s a will (and stable wifi), you can source, produce, and automate your way to residual income. It’s what my Instagram Explore page seemed to suggest one day, surfacing a Reel announcing the “sold-out launch” of something — you never see what — from someone who seemed optimized for the platform: excited for their own success, unburdened by the intensive labor it must’ve taken to get there.
It amounts to an ad for a suite of integrated marketing tools for merchants on Instagram, a platform that I’ve personally come to rely on for my own small business. It has taken me, a millennial, years to wrap my head around the scope of this work — how to do it, then do it better, then realize my “creative class” ass has never taken a business course and can’t balance a checkbook. (Do people still balance checkbooks?) Global quarantine measures and the resulting surge in online sales might seem like a boon at first glance, but they present a host of additional challenges for small-business owners.
According to data from Empire State Development, small businesses — those with less than 100 employees — represent 98% of all businesses in New York and generated more than $1.5 billion in “economic impact” statewide in 2019. In an acknowledgement of the potential difficulty of migrating that impact to our new online-only reality, New York state recently launched the Empire State Digital initiative, billed as “an invitation for small businesses to explore the benefits of expanding beyond their physical brick and mortar location to an online marketplace.” (Never mind the fact that for many business owners navigating Covid-19 protocols, this “invitation” is a do-or-die proposition.)
The partners, including Etsy, Square, Shopify, and Clearbanc, offer perks such no fees (up to a certain amount), a free 90-day trial, and free listing credits, among others. Most of what they offer assistance with — branding, marketing, photography, SEO — is an entire department at any well-structured organization. The program assumes both digital literacy and technological access but doesn’t guarantee them. For the most part, migrating a brick-and-mortar business online is still easier said than done.
To highlight the specific challenges Covid-19 presents, I spoke with four small-business owners with varying digital footprints about what it’s been like to handle the surge in online shopping over the past few months.
The 20-person bookstore with a new dependency on data
With two brick-and-mortar retail locations in Brooklyn and Jersey City, New Jersey, WORD is nothing if not a neighborhood institution. Founded 14 years ago by Christine Onorati, the stores’ day-to-day operations were being handled by her husband, Vincent Onorati, when Covid-19 struck.
“[E-commerce] was never a huge part of our business. It was something we did because we had to,” Vincent Onorati says. At the onset of quarantine, there “were no boxes coming in or out” of either store for at least a month. Major revenue streams like school book fairs and author events — a 1,000-person launch for Jim Carrey’s memoir was scheduled in April — dried up entirely.
The business prioritized fulfilling orders from existing stock before turning to a distribution partner (Ingram Content Group) or sending customers elsewhere. Bookshop.org, which launched at the beginning of lockdown, helped independent booksellers most as an Amazon alternative for affiliate-link revenue. “There was a lot of goodwill in those first few months. It was a big ‘aha moment’ for a lot of people, and we gained a lot of customers,” says Vincent Onorati. “Then the anti-racism books became super-popular in mid-summer, and we couldn’t even keep up with the demand — the publishers had to reprint. But now what worries us is [that] people are falling into their old patterns again.”
Although WORD was classified as an essential business, no more than one person at a time was allowed inside the store, all the way through June. “We went from having maybe 10 online orders a day to 200 or 300,” he says. As quarantine measures were relaxed, WORD diversified its offerings by creating “mystery boxes” and care packages: greeting-card bundles pegged to Mother’s Day, sock bundles because “no one is leaving the house.”
“I couldn’t believe the amount of puzzles we sold those first few months,” Vincent Onorati says. Still, WORD sales look to be down between 30 and 50 percent year over year.
“There’s this insistence to lump Amazon and bookstores,” he says. “[Books] are inconsequential to them, really. Even people in my family, they don’t buy books there but they get all this other stuff. That’s worse. Independent business doesn’t just mean the bookstore — it means the hardware shop, it means the bodega. I have a friend who was ordering almonds on Amazon. I’m like, ‘You live in Greenpoint, you throw a rock you’ll hit almonds.’ It’s just this conditioning. As sensitive as people are [about] where their political vote goes, they have to realize that where they choose to shop has as much significance.”
The 10-person candle company with a massive increase in direct sales
Boy Smells co-founder Matthew Herman, who launched the brand in 2016 with his partner, David Kien, was taking press appointments in Paris when it became clear that the spread of Covid-19 was about to shut down the global economy. Herman safely made it back stateside, and “by March 17, we were up 1,500 percent in direct-to-consumer candle sales,” he remembers. “It was a weird time where we were trying to figure out what was going on, just as human beings, and then also everyone is like, ‘I’m stuck inside, I guess I need a candle.’”
At the end of 2019, just 25 percent of Boy Smells’ business was direct-to-consumer (DTC). Although they’d brought on a digital marketing agency to scale that part of the business, quarantine mercilessly hastened the shift on its own terms. “We had these huge supply-chain dilemmas because some component parts [for the candles] come from China and they were shut down, then the paper for our boxes comes from northern Italy, of all places, and the wax and fragrance comes from the USA, and then we shut down,” says Herman. “We had to work from home for a long while — we were diversifying our supply chain like crazy. Someone we knew who used to work in candle production was making 2,000 units a week for us out of their garage; me and David and our staff were pouring candles from home, trying to do 1,000 units a week that way.”
The ship has since righted itself to some degree, with China reopening for production “in the nick of time,” and a number of wholesale accounts were added back into the fold. (The brand was 100 percent DTC for a period during lockdown.) The now-10-person company invested in a planner and a CFO, launched a new collection in September, and remains structured for further growth in 2021. “Everyone I talk to is surprised by how well retail has bounced back,” says Herman. “I know I’ve spent more online this year than I did last year, [because] I’m not eating out, I’m not traveling — I’m not spending the way that I used to.”
The two-person vintage store with a huge following (but no e-commerce)
Brandon Veloria Giordano and Collin James Weber, the creative couple behind the five-year-old vintage business James Veloria, went into the pandemic in a precarious situation — at least on paper. Their website, a makeshift storefront hosted on Squarespace, badly needed updating. They didn’t have access to their retail space (or the inventory inside) during lockdown; their landlord, who collected each month’s full rent, didn’t let them back inside the building until the beginning of July.
But the duo’s business flourished on Instagram, where their personalities took center stage in compelling (and shoppable) Instagram stories. Brandon would model designer pieces in the couple’s living room, and shoppers would claim their favorites via direct message; the shopping has since migrated to the website via swipe-up functionality. (Direct messages admittedly got a bit messy.)
The couple “used every inch of space” to shoot products in their living room while also processing and fulfilling orders right off screen; this way of working allowed the store to stay afloat but also required a lot of physical, logistical, and, at times, emotional maneuvering. “[The stories] are fun and community building, but I was basically doing them to pay our rent,” adds Giordano. “I felt like I needed to be on all the time.”
Only time will tell if their newly launched website can sustain the same growth as Instagram without Brandon “putting on a miniskirt and rolling around on the floor” to draw shoppers in. “We try to make special collections that go up every week, plus daily stories where you can see new stock,” says Weber. “It’s just a lot of work that wasn’t part of our schedule before.” The pandemic, in essence, transformed the couple’s business model from brick-and-mortar retail into that of a social media influencer. Trade shows, for which the couple would travel up to eight times a year with upwards of 200 pieces of inventory, didn’t happen at all in 2020.
“Compared to last year at this time we aren’t that far off,” says Weber, “but it was a lot more work to get here.”
The one-woman retailer with a “pandemic-proof” business model
Monica Khemsurov launched her smoking accessories company Tetra five years ago. At the time she had two partners in the operation; now it’s just her, and the entire business is automated. Her store runs on Shopify, and a fulfillment partner is responsible for all shipping and logistics for a monthly fee. “It’s expensive,” she tells me. “As a small business with low order volume, the issue is, can your margins sustain it?”
Machine automation doesn’t free Khemsurov from labor so much as it creates new kinds of work for her to focus on so that she can achieve scale. Her sales doubled during lockdown, which means she’s had to shave more off her profit margins to spend money on not only marketing to retain those customers but also on product development, production, logistics, and inventory management.
As a cannabis-related company, Khemsurov can’t run ads on Facebook or Instagram, though she’s sent product to photographers to create original smoking-related content for Tetra’s social media accounts. “The really hard part during Covid was that so many businesses moved online, so I had to decide where the cutoff point was [with wholesale accounts]. At a certain point, if you have too many people online then retailers are competing with each other for the same Google searches.”
Despite the influx of new competition for keyword buys, Khemsurov continues to post to her brand blog to help with the site’s ranking and offers a 10 percent discount for newsletter sign-ups, as well as free shipping on orders over $150. These are common practices for online businesses, but again — you need the margins to sustain them. “I’m just gonna do what I can,” says Khemsurov. “If I get three people and one person buys something, that’s one person I didn’t have yesterday. I lost so much work during Covid that I’ve been able to focus on Tetra, and like everyone else I’m not spending very much money. I’m looking at this time as an investment.”
Millions turn to Vox each month to understand what’s happening in the news, from the coronavirus crisis to a racial reckoning to what is, quite possibly, the most consequential presidential election of our lifetimes. Our mission has never been more vital than it is in this moment: to empower you through understanding. But our distinctive brand of explanatory journalism takes resources. Even when the economy and the news advertising market recovers, your support will be a critical part of sustaining our resource-intensive work. If you have already contributed, thank you. If you haven’t, please consider helping everyone make sense of an increasingly chaotic world: Contribute today from as little as $3.
via Vox – RecodeRecode, tech