Sramana Mitra: The competition for keywords has gone up in the course of this, right?
Azim Makanojiya: Significantly. What we used to pay 20 cents for, we now pay $6 to $7.
Sramana Mitra: How has that impacted the business?
Azim Makanojiya: We never stayed stagnant. We added new features into our business where rather than customizing wristbands, you can now make wristbands to a shape. We added all these little features to the wristbands to increase our margins as our net margins were dropping because of the keywords. We started adding more features that didn’t cost that much, but which customers really wanted. That was one way of dealing with it.
Another way is reducing our overhead. We always had in mind that we never want to be a manufacturing company like our competitors. One way to reduce it was to shift our call center overseas. It helped us significantly in our expenses. It helped us build a stronger, more reliable team than what we had in the States. Other things were we reduce the load of calls that we were getting by improving our website. We had a chat portal online. We had an online ordering system where you can do anything with your wristbands simply through our ordering system. It’s one of the finest ordering systems for wristbands and we’re really proud of it. Those are the things that reduced our overhead and kept us afloat.
Sramana Mitra: The whole business was self-funded?
Azim Makanojiya: Yes. It’s basically three students who started with funding of about $1,200. We started off from that. We thought about outside investors.
Sramana Mitra: You didn’t need it. You’re doing $6.9 million in revenue.
Azim Makanojiya: Yes, but remember that in November and December of 2009 through to March 2010, we took a pretty good hit. November and December are probably the worst months to do any type of marketing for promotional products. People are buying other things. They don’t want a promotional product. We took a pretty significant hit. Around March through May, things started picking up.
The interesting part of our company is that we are not a manufacturing company. We tell everyone that we make wristbands, but the beauty of our company is we are a technology company. We don’t have a single equipment that touches the product. If you order a product from us, we don’t touch it. We’re a technology company and we’re basically providing that portal for you to place your order and get your products seamlessly.
Sramana Mitra: We have very good coverage of zero logistics e-commerce players that are doing really well. If you look at the book that just came out, you will see we have covered several. This is definitely a major trend where they’re just doing the technology interface and all the logistics is outsourced.
Azim Makanojiya: I find that really fascinating. Just by itself, it’s a big company producing products without seeing them.
Sramana Mitra: It is fascinating. I think it’s great that you’re doing this. It’s great that you’re successful at it. Congratulations and all the best!