Sramana Mitra: Somebody else is sending these letters from Indiana and you were an affiliate partner of that particular business.
Angie Stocklin: Correct.
Sramana Mitra: You were generating traffic in your website and monetizing those letters in that affiliate model from that original business?
Angie Stocklin: Yes.
Sramana Mitra: How much did he charge for these letters and how much commission were you getting?
Angie Stocklin: I remember that we got $5 per letter. I don’t remember how much the customer was being charged. I want to say somewhere between $10 and $15.
Sramana Mitra: So they were paying around 30% commission? That sounds very high.
Angie Stocklin: It could have been more but I can’t imagine it was much more than that.
Sramana Mitra: In the two months that you did this business, how much money did you make?
Angie Stocklin: We made $2,000.
Sramana Mitra: Come January, you decided that you were going to start an e-commerce business. What kind of e-commerce business were you going to start?
Angie Stocklin: We had a few qualifications that we needed. We needed it to be small enough to fit in our house. We wanted something that had high enough margins that we could have enough money to market and advertise the business. We just started looking at websites like bizbuysale and we came across a sunglasses business for sale. We got really interested in the product. At that point in time, I think my husband sent out inquiries to several different sunglasses brands that we found online.
Sramana Mitra: How much did you purchase that business for?
Angie Stocklin: $10,000.
Sramana Mitra: What sized business was it?
Angie Stocklin: I want to say he was doing about $40,000 in revenue a year.
Sramana Mitra: How can you purchase a business like this doing $40,000 in revenue for $10,000?
Angie Stocklin: Because he was doing it by himself and he had just a new child and wanted to get out.
Sramana Mitra: He was completely out or he remained a shareholder?
Angie Stocklin: No, he sold everything to us.
Sramana Mitra: Great. You had a business that had about a residual $40,000 residual revenue built into the business. Tell me more about what happened next?
Angie Stocklin: At that point in time, we had to learn everything from scratch. We essentially did it all on our own with some contract work for design and writing, and a little bit of contract work on the technical side. The brand was on Yahoo! Stores at that time which had a proprietary code base. There were only a few people in the US and abroad that understood the language. That was one of our first challenges – to find somebody that we could trust to code.
Sramana Mitra: How did you meet that challenge?
Angie Stocklin: We found someone from India on a freelance website. We communicated with him via email.
Sramana Mitra: You basically used Elance to find somebody who knew the technology and you were successful in finding somebody good.
Angie Stocklin: Correct.
Sramana Mitra: What was the customer acquisition strategy? How were you going to grow this from $40,000?
Angie Stocklin: We had a small email list that came with the business. We started learning email marketing. We dipped our toes into paid advertising and we spent some time doing search engine optimisation. Those were the three main channels that we targeted.