GoLights co-founder opens up about a hard year
By Vince Hansimikali (pictured above left, with co-founder Nick Nicolaou, right)
There comes a time in every business when it’s make or break. For GoLights.com.au, that time was August 2015, three years after I co-founded the company with Nick Nicolaou and Andrew Proestos in the lounge room of a three-bedroom house. But let me provide some context first.
In 2013, the business was growing at a rate we could not keep up with, so we decided to move into a shared warehouse in Hillsdale to make space for more staff and a small distribution facility.
As growth continued, we were feeling pressure on all fronts – from the lack of inventory updates from suppliers causing us to sell products that were not in stock, to being able to ship orders out on time, to growing our sales team to keep up with calls.
We knew we had to make some changes. Little did we know that each attempt to ‘fix’ the most pressing issues in the business would lead to more problems down the road.
Our first decision was to start manufacturing our own products to control some of the inventory issues we were having. After a few visits to China, we found a factory that we felt comfortable dealing with and started our importing operations.
But this came with its own challenges – from capital expenditure, to quality control, to coordinating container deliveries to our warehouse.
Space became an issue, so in 2014 we moved to a larger facility in Botany, which allowed us to have our office upstairs and a suitable warehouse and distribution facility downstairs. We also hired phone staff to help our two-man team.
But just one year later we found ourselves questioning our ability to run the warehouse, as orders were not going out fast enough due to the high volume, and we felt that we could not scale the business with our current systems.
The idea of outsourcing the warehouse function and concentrating on sales and marketing was the logic behind the plan to move to a 3PL provider. And in mid-2015 we embarked on the quest to find a 3PL provider. We soon realised that this would entail changing our process to suit theirs.
Our model is a hybrid that includes the sale of our own product and products we resell from other suppliers. As a result, we have 10-20 inbound deliveries from suppliers every day, including products we have already sold that customers are waiting for.
In order to pull this off and ensure that customers receive their goods in a timely manner, these deliveries need to be processed and orders picked and packed the same day they are received. This dynamic causes a number of problems and we found ourselves unable to conform with the model that 3PL providers use.
Meanwhile, our importing operation was in full swing and we had grown our head count to 10. But by October 2015 our fulfilment processes were falling apart and the staff were struggling to put out all the fires that came up on a daily basis.
We were growing and falling apart at the same time and our promise to make our customers happy was becoming harder to keep.
At the end of 2015, we decided to take back control of our fulfilment and purchase a property in Pagewood. We moved our entire operation in March 2016 and GoLights HQ was born.
We now handle all aspects of our business and when problems arise we address them quickly and in the way we want.
There comes a time in every business where it’s make or break, the eight months from August 2015 to March 2016 was our time. We faced battles on every front and we came out the other side a better company. We wear our battle scars like a badge of honour.
There is much to be said about our team and how they handled themselves, we couldn’t have done it without them and we thank them. This period has created a culture that can now get us through anything.
And it turns out that during the turmoil we managed to grow year-on-year at 77 per cent and made the BRW Fast Starters list with revenues just under $4 million.
In July 2016, we underwent a restructure which saw investors who believe in our story and our vision come into the picture. In addition to adding capital to the business, a vast knowledge bank of business experience is now at our disposal.
Notably, James Dunphy has been instrumental in providing guidance and advice over the last six months, which has seen us expand our imported product range, launch a wholesale division and secure a deal to acquire one of our smaller suppliers.
We now have expansion plans for the next six to twelve months and a sound business strategy.
Vince Hansimikali is the co-founder of GoLights.com.au.