Launching a Mini Dirt Bike Shop and Growing To £6,000/Month
Hello! Who are you and what are you working on?
Hi, I’m Stephen and I am the founder and owner of Micro Bikes UK, an e-commerce store that specializes in kids quad bikes (4 wheelers) dirt bikes, scooters and ride on toys.
We have a strong online brand already after only 18 months and we rank on the first page for many of our keywords. Our main selling products are Mini Quad bikes and Dirt bikes with petrol engines.
We are on track to hit six figures in revenue for this financial year and we dropship 90% of our products.
What's your backstory and how did you come up with the idea?
I discovered mini bikes by chance really. I didn’t know they existed until we began selling them in 2014. It was 2 years later that we founded Micro Bikes.
We were not ready for the product to be a success at the time. My initial product research brought me to Ride on Cars, so my focus was on them. However, our suppliers also sold mini bikes, so I added a couple to our eBay store (back then) and they flew off the shelves.
I sold them for one year before realizing that I hadn’t planned for their success. Instead of pivoting straight away, I took some time away and came up with a business plan centered around mini bikes, got some seed investment and Micro Bikes was born.
The reason for long-lasting success, in my opinion, is experience. If you can get experience when you’re young by failing or being an employee then you’ll already have more advantage than someone starting from scratch.
During the validation period, I discovered the main reason for the success of mini bikes is their high barrier to entry. These bikes need to be maintained and require some technical assistance. This means that the big supermarkets stay away and it opens the doors to smaller more niche businesses to dominate the market. The businesses that are successful in the space are those that offer a solid after-sales service. I now know our products inside out. This is a huge help.
The other thing I discovered is that the strength of the market is also its weakness. Many of the legacy companies in the market are run by handymen, not marketers. I immediately knew that this would be an advantage for me coming from a digital background.
I could easily learn the technical after-sales, but I knew it would be harder and more expensive for my competition to learn good Marketing. This has given us a leg up and allowed us to overtake legacy stores that are 10+ years old.
I am now full time self-employed after leaving my job in digital marketing and I am looking to use the time to create more content for the business.
Describe the process of designing, prototyping, and manufacturing the product.
Because we work in a niche market, we are fortunate to know most of our local suppliers and distributors.
So even though we dropship, we were able to identify where the product was coming from in China. The majority of our local suppliers use the same factory in China, offering different designs using the same build, those that use different factories, we monitor closely before continuing with them long term, this is to avoid quality issues.
We use 7 to 8 different dropship suppliers and feed their products into our warehouse management system (WMS), this enables us to feed into our Shopify store, as well as eBay and Amazon. It also allows us to list on all three platforms at the same time. This system gives us the freedom to import supplier stock feeds, meaning we worry less about running out of stock. Although, we still do this manually with some suppliers.
Our start-up costs were low. My initial £5,000 investment was for store design, software and local inventory. We wanted to bootstrap as much as possible.
Describe the process of launching the online store/business.
This was an exciting process for me, but also required a lot of patience. I was still in full-time employment whilst starting the store, so it required careful planning and execution.
The first thing I worked on was a business plan, this was a 10-page document which included all my market research, site design concepts, and financials. Although this plan does not apply now, it gave me clarity of mind. It helped me visualize the business on a logical level.
I answered all the questions I had over a 6 month period leaving no stone unturned. I wrote resolutions to all potential problems to minimize surprises and let ideas sink in, to the point I became sick of them and ended up trying to improve them. The problem I’ve had in the past starting projects is falling in love with an idea and rushing into it without proper thought. Allowing the idea to sink in over six months reduced the chances of this happening. By the time the business was launched, my feet were firmly on the ground.
The next step for launch was implementing systems including website, social media, WMS, and storage (for returns). This was my favourite part since it allowed me to express myself creatively. I built the store on Shopify, wrote the terms and conditions and designed a brand that I could be proud of. Then after testing every area of the process, I began running ads to the website.
It was less than a week before our first sale and it took less than six months for us to do £5,000 in revenue a month. This was whilst in full-time employment, however, it did help that it was the lead up to Christmas.
The best advice I can give to someone starting a new store is not to expect anything to happen overnight. Even though we made our first sale in less than a week, we waited three weeks until our next sale. No one creates a gorilla in a few months, and even now we have slow months.
Brands can take time for people to trust. Looking back, I spent far to much time (even now) looking at my phone waiting for a sale to come in. It just doesn’t work like that all the time, despite how good you think your business is. You need to work for your sales and be patient. Market furiously during the slow months and reap the rewards during the good ones.
Since launch, what has worked to attract new customers?
We have seen quite a few marketing channels work for us on a small scale, and we have spent the last 12 months really getting to grips with where can we increase our budgets, and how. It might be easier for me to break down our approach to our most profitable channels.
Adwords is our number one source of revenue and has been good to us since the beginning.
So far, we have managed to turn a £2.5k ad spend into £16.5k in sales. This gives us an 84.85% Gross return on investment, which is a huge part of our store's bottom line.
This kind of return in my opinion is only possible with a niche product. If we were selling iPhone cases and trying to market them via AdWords, I don’t believe we would see this kind of return.
What you’ll find is that a large majority of your loyal customers have taken weeks or even months to convert. They buy from you because they remember you.
The highest converting campaigns we run on AdWords is shopping - this alone has accounted for £12.3k in revenue, with the rest coming from our remarketing and search network campaigns.
Our search campaign is targeted specifically to our own brand name. In the beginning, we noticed in Google search console that people were searching for our brand name, but not finding us. So we set up a campaign to make sure that we ranked number one for the term ‘Micro Bikes’. Since then we have moved to the front page, but continue to control our brand keyword in AdWords. To this day, 'Micro Bikes' is one of our highest conversion keyword campaigns.
We also make sure to spend time removing negative keywords so that the ad group only contains keywords related to our brand. This helps us maximize ad spend and increase conversions. A £500 ad spend will easily bring in 3k in revenue.
We turned to Facebook marketing after becoming a part of the many of the dropship forums available on the platform. We are regular posters on the likes of Ecom Empires and Kingpinning, and get lots of our information from there. We use Facebook advertising mainly for remarketing and to also promote new brands we stock. In general, our ads look like this.
We run several Pay Per Engagement (PPE) campaigns to broad match saved audiences, whilst at the same time running conversion ads to custom audiences, for example, people who have interacted with our page, visitors to the web store or people who have added to cart. At the bottom of our funnel, we run a dynamic display ad for those who have added to cart. This is the end of our funnel and tends to convert those who have reached it from our PPE ads.
Our goal is to become more than just a dropshipping store. Our aim is to be the alternative in the market.
It is also our intention to gather as much engagement as possible from our PPE ads (especially shares) since this acts as a signal for Google to help us rank for SEO. Since running Facebook ads, we’ve since a huge boost in our organic traffic. The data shows us the correlation between the two. People share our posts, then search for us on Google. This all ties into our Adwords search campaigns, which then ties back into our Google remarketing campaigns. So basically we have created a huge circle, that once in, you’re stuck in for 30 days.
The most important advice I can give to someone getting into e-commerce is to think about your marketing funnel. Someone who has only seen your business once is probably not going to convert straight away (depending on the price of your product). If you can reach your customer at several different data points then they are more likely to convert later down the funnel. What you’ll find is that a large majority of your loyal customers have taken weeks or even months to convert. They buy from you because they remember you.
How is everything going nowadays, and what are your plans for the future?
After a busy Christmas period sales have leveled out for us. We have spent more time working on our SEO, improving our sales funnel and improving the customer journey on our website.
We currently work on a 25 to 30% gross margin but will be looking to increase that margin by negotiating rates with our suppliers as we grow. We are also looking to flatline our expenses, paying only for what we need to help us become more profitable. This includes utilizing our offline premises that we pay for, to gain more offline sales.
Our goal is to become more than just a dropshipping store. Our aim is to be the alternative in the market.
Through starting the business, have you learned anything particularly helpful or advantageous?
One thing I’ve learned about starting a business on your own is that it is exhausting. It is very easy to burn yourself out. I found myself physically tired a lot of the time, but my mind was always racing with new ideas. The best thing I did to try and counter fatigue was to outsource work and hire a VA. Sometimes it’s worth paying someone a few hundred each month to save you time.
Another thing I’ve learned is that our products are seasonal. I was aware of this when starting out, but I didn’t realize how much of an issue it was until Winter. We really had to pull out all of the stops during the first months of the year to promote our products that could be used indoors as well as outdoors. I now know that the bulk of our revenue will come during the summer and Christmas months.
I think the best decision we've made so far is building a site that converts well. This is a huge advantage for us building trust with our customers. Our competition may have time in business, but we have the quality of business.
Finally, I think it’s important to have perseverance in business. There were so many times when I wanted to quit at the start, perseverance has opened doors, at first, it was me chasing suppliers, now we have suppliers asking us to sell their products.
What platform/tools do you use for your business?
We are huge fans of Shopify. It is by far the easiest CMS to use and plugs in well with a number of other tools, for example, Xero, MailChimp, Facebook and Google, which are essential to our business.
We also use a tool called Linnworks. This acts as our WMS and allows our sales channels to talk to each other in one place. On top of that, we have a number of Shopify apps for conversion, for example, Conversio for abandoned cart remarketing and reviews, Firepush for push notifications, Back in Stock for out of stock emails and DivideBuy/Klarna for 0% finance payments.
What have been the most influential books, podcasts, or other resources?
I listen to a lot of podcasts (I mean a lot). The ones I listen to the most include the likes of Startup and The Pitch by Gimlet Media, EcomCrew, The DigitalMarketer Podcast, This is Criminal by Radiotopia and about 100 others as well.
I also like to read autobiographies and inspiring books such as Richard Branson's Like a Virgin autobiography and Rich Dad, Poor Dad.
Advice for other entrepreneurs who want to get started or are just starting out?
I don’t want to get into too much detail here, especially since I’m not a millionaire yet, but my advice to someone starting out is to just start, and if you fail, fail fast, take a break and then start again.
The reason for long-lasting success, in my opinion, is experience. This makes sense considering that those who run large corporations are double our age. If you can get experience when you’re young by failing or being an employee then you’ll already have more advantage than someone starting from scratch.
Take a job in the industry if need be, learn from those smarter than you and take that knowledge into your business.
Where can we go to learn more?
You can find me personally on Linkedin.
You can also find us on Facebook and on our website www.microbikes.co.uk.
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