How Matt’s ecommerce business hit $1m in turnover
At a glance
With a Prospa Line of Credit, Matt was able to:
- Buy the bulk inventory he needed to keep his business growing
- Partner with a third-party fulfilment centre so he could spend less time packing and more time planning
- Maintain a short turnaround time from order to sale to maximise growth
Sniffing out a good opportunity
Matt Stanley had been on a business trip in early March 2020 for the travel company he worked for in Australia. There was no mandatory quarantine in place when he arrived home but, after only a couple of weeks back, working in the travel industry felt very precarious.
“Flights were being cancelled, airline staff reduced, huge cost-saving measures were being put in place,” says Matt. “I thought it was only a matter of time before my job would be over. I had to do something else – have a backup plan in place. So I decided to start an ecommerce store.”
That was the beginning of My Perfume Shop.
“I’ve always been a huge fan of colognes and perfumes. I have a big collection and a real passion for it. But I’ve never really been satisfied with the buying experience,” he says, explaining his choice to sell perfume.
“There are two worlds of buying when it comes to perfumes. You can either have a beautiful buying experience at a department store but pay a very high retail price, or you can have a very ordinary buying experience from a discount pharmacy or online retailer and pay a bit less.”
Matt saw an opportunity for a different kind of experience – what he describes as affordable perfumes and a beautiful buying experience. No knock offs, no out-of-date perfumes, and fast, free shipping.
And there was another pain point Matt wanted to address: how perfume is described, which just didn’t work for sales that weren’t in-person.
“Perfume descriptions are often very abstract – ‘smells like the dark side of the moon’, ‘inspired by Scandinavian wolves’. What does that even mean!? I wanted to give customers clear, informative descriptions of what the perfume smells like, how long it lasts and what occasion it’s appropriate for.”
Sleepless nights for a sell-out product
Matt spent two months building a website, researching and writing descriptions, and started approaching distributors at the beginning of June. It wasn’t that straightforward though. Matt says that as ”just some kid in a Marrickville share apartment”, he got a lot of knock backs when he tried to order commercial quantities of perfume.
He was eventually able to place his first order – about $8,000 worth of perfume that arrived on 17 June. Two days later, he sold his first bottle.
“It was a weird moment,” he remembers. “I thought it must be a mistake – why would someone buy from my little business?”
Fast forward three weeks, and every unit of perfume was sold, with Matt packing them in his apartment and walking each delivery down to the local post office. Another slightly bigger order also sold out and he quickly got into a three-week cycle of ordering, importing and selling.
Matt placed a much bigger order in time for Black Friday sales, and says it was a nerve-wracking moment: “I had nightmares about the plane crashing with $50k worth of stock in it!”
But it paid off.
“Orders went ballistic. And because I’d guaranteed same day shipping, I had nearly 1000 orders to pack and send on the Monday.”
He spent 48 sleepless hours packing and sending the orders with help from his flatmates. They had to rent a van to move the packages 200m down the road to the post office.
Revenue had reached $100k and Matt had reached a tipping point in the business in less than six months of trading.
“I’d definitely outgrown the garage!”
Matt decided it was time to give up his day job, engage a third-party fulfilment service and order the large quantities of stock he needed to continue to grow.
A winning cycle
“I didn’t know anything about the small business lending space,” says Matt. “I didn’t even know what a line of credit was. So I did some research and that’s how I discovered Prospa. I looked at a lot of different options and found that Prospa had been very well reviewed”
Matt looked at the eligibility requirements, saw that he was well past the six months’ trading necessary, sent an email and started the application process for a $75k Line of Credit.
“It was very straightforward. I completed it while waiting in Singapore airport for a flight to Dubai to meet with a distributor,” Matt says.
“With Prospa, most of my contact is over the phone and it feels very personal which makes a nice change from the sterile process of previous loan applications. And I have a consistent point of contact. Whenever I make a call, I always hear back the same day.”
Matt has used the Prospa Line of Credit to maintain momentum, and has tailored his repayment timelines to suit his business’s cash cycle and minimise interest.
“Our business model and Prospa’s lending model work really well together,” says Matt. “I use the funds to purchase inventory, the order arrives in two to three days and is ready to sell in another day. So within four to five days of using the capital, the product is ready for sale and orders usually sell out in about four weeks, which means I can make additional repayments really quickly.”
“My favourite aspect of the Prospa platform is that I can make the additional repayments on my own time. The minimum weekly payment is easily met and then I can pay off large chunks quite quickly after.”
Matt has discovered that the gap he spotted – that beautiful shopping experience without the hefty price tag – was a good one to choose. In June 2021, after starting with $8,000 worth of stock the previous year, My Perfume Shop reached $1 million revenue and is now on the way to becoming the highest-rated perfume store in Australia with a 4.9-star rating on TrustPilot.
Matt continues to be able to expand his product range and move into other marketplaces like Catch and Amazon. Next year he is launching My Perfume Shop in New Zealand and plans to partner with Prospa there as well.
And the flatmates that helped him pack those first orders?
“They are very proud. And they’re enjoying all the free samples!”
Speak with one of our small business lending specialists about how a Prospa Line of Credit could help you achieve your business dream.
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