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As a management consultant at PwC, Daniel Scott, now 27, found himself on the hunt for the perfect leather briefcase—but most of the options he loved were too pricey for his budget. He’d only recently graduated from the undergraduate program of the NYU Stern School of Business.
Scott continued his sartorial quest after he left consulting and worked as an English teacher in Vietnam. “As a teacher, I thought it was important to look really adult and responsible in front of my students,” says Scott.
Realizing there were many young men on budgets like his own, he decided to fill the gap in the marketplace himself. He reached out to a contact who manufactured leather bags for advice on how to make a leather briefcase he could sell for $100.
“She laughed at me and thought that wouldn’t be possible,” he says.
Scott soon found himself teaming up with her to develop a design he was happy with. He found a local factory that was willing to manufacture 200 brown briefcases and 200 black ones, put them up on a simple site—Danielnyc.com—and ran some Facebook ads to drive traffic there. They sold out. Without middlemen involved, his direct-to-consumer brand was able to charge $195 for a briefcase, lower than for comparable brands.
That success led to a second production run and, eventually, a Kickstarter campaign that ended in July. Scott raised $243,918 from 1,337 backers who placed pre-orders on the crowdfunding platform.
Since his launch, Scott estimates his profitable business, Daniel’s, which is based in New York City, has brought in $500,000 in revenue.
Here are some of the strategies that have helped him pull it off.
Put on your oxygen mask. Like most working people, Scott didn’t have the luxury of spending 100% of his work time on the business—so he did the best he could. He got a 20-hour-a week, weekend job at a startup so he could pay his bills and still keep investing in the business. He runs Daniel’s more than full-time during most of his other waking hours. It’s a far cry from The 4-Hour Workweek at the moment, but Scott is pumped up by the potential of his business. “I do feel you can run a million-dollar business with an internet connection,” he says.
Personalize it. Scott did not have a huge marketing budget at first, so, on the first 850 bags he sold, he looked for creative way to build on his relationships with customers. “I wrote each of those customers a handwritten thank you note,” he recalls. “It was fun,” he says.
Simplify logistics. After his first two production runs arrived in New York via ocean freight, Scott he had to drive to the port in New Jersey to pick them up and store them in his apartment. He soon realized it would be important to move his production to North America, so it would be closer to where he is physically located and he’d have other shipping options. Now the briefcases are made in Leon, Mexico, a leather-goods hub.
He also began using a fulfillment center in Long Island City to store, pack and ship the orders. Accustomed to a student’s budget, he had to get used to writing five-figure checks to cover the fulfillment of all of his Kickstarter orders, but it made no sense to him to keep packing boxes himself. “It’s not a good use of the CEO’s time,” he says.
Outsource advertising. Scott taught himself Facebook and Instagram advertising so he could place ads to drive traffic to the Daniel’s site and spent $70,000 on this. He soon decided that hiring an outside agency with expertise in this niche would prevent him from wasting money on ads that didn’t work and free him to focus on growing the company. “Every hour I’m spending is an hour I’m not running the business,” he says. “As a one-person business, there are only so many hours in a day.”
Scale your thinking. With his briefcases taking off, Scott introduced new versions with pattered linings, such as a sailboat motif, so customers could build a wardrobe of them. He credits his mother, who always had a flair for fashion, with introducing him to details like what what good stitching on leather products should look like. “Without that education, I don’t see how I’d make the decisions I do today on a daily basis regarding design and production.”
Scott has been so inspired by the success of the briefcases that he’s now planning to branch out. “Now I would say my goal is to be the next Brooks Brothers,” he says.
He plans to expand to leather goods like belts, wallets and shoes, as well as shirts.
“Legacy retailers are not digitally sophisticated,” he says. That leaves an opening for scrappy, one-person startups like Daniel’s.
December 24, 2018 at 08:39PM
Forbes – Entrepreneurs