Imagine selling online fitness equipment for the home at the start of the pandemic. Sports clubs were closed. Consumers were stuck in their homes. According to Kaevon Khoozani, founder of Bells of Steel in Canada, the demand for weight training equipment was “obscene”.
“We encountered two huge hiccups,” Khoozani told me. “Everything we sell comes from specialty suppliers. Some large companies, like the chain stores, have devoured all capacities and raw materials. Three of our main suppliers have sold us. “
In other words, Khoozani was faced with obscene demand with no inventory. What was his solution?
“I built a completely new infrastructure for the production of iron weight plates in Vietnam. As far as I know, I am the first to do this for export from this country. It took a lot of time, money, and effort. “
Khoozani’s persistence has paid off. His company is thriving after redesigning its supply chain, logistics and inventory planning.
He and I recently discussed these developments and more. Our entire audio conversation is embedded below. The following transcript is edited for clarity and length.
Eric Bandholz: Selling fitness equipment during the pandemic makes you potentially one of the richest people in e-commerce.
Kaevon Khoozani: Theoretically yes. I could be poor soon, but I’m fine now.
Band wood: We are all rich in life. This show is not about monetary value or getting rich quick. Their website is Bells of Steel. How difficult was it to get equipment? I am a weightlifter myself. Almost everywhere is sold out.
Congratulations: For sure. And the demand hasn’t really stopped. This month will be our biggest yet.
Band wood: When I got into ecommerce, I avoided shipping heavy items. They sell products that are heavy. How do you manage this shipping process?
Congratulations: It’s tough. UPS has high package size and weight thresholds. Quite a few of our products have been specially developed for these UPS guidelines. There is a lot going into our packaging design. For fulfillment I use a 3PL in Indianapolis. I also ship from my own warehouse and staff in Calgary, Canada.
Almost everyone who works for us loves lifting weights. Many of our warehouse workers are tall and physical.
Band wood: You are in Canada. It’s a small market compared to the US. Does your business depend on sales to US consumers?
Congratulations: Canada has roughly the same population as California. Bells of Steel has been around since 2010. At that time, there were no competitors up here. So it was an advantage. Imagine you are the first company in California to sell bumper panels on the internet. We caught a ton of the Canadian market and a lot of organic Google traffic.
Amazon is nowhere near as dominant as it is in the US. It’s a lot easier and a lot cheaper in Canada than in the US. To date, our split is around 70 percent in Canada and 30 percent in the US, although the US share is growing rapidly.
Band wood: Whenever Beardbrand delivers to Canada it costs an arm and a leg. It is hugely unaffordable to serve Canadian consumers. What about shipping from Canada to the US?
Congratulations: It’s much easier and cheaper to ship from Canada to the US than the other way around. There is a difference in customs and tax regulations for whatever reason. I can ship less than $ 800 to the US and it goes through. No duty, no nothing.
But you will be amazed by everything that is shipped from the US to Canada. I’m not going to be ordering things straight from the states because I end up with these crazy customs bills, or they get stuck with customs for three weeks, or they don’t come through at all.
Band wood: Where are your products made?
Congratulations: Everything is made in China and, more recently, Vietnam. Everything comes in containers straight to Calgary and Indianapolis.
Band wood: Many large companies sell weight training equipment. How do you compete?
Congratulations: What makes us unique is that we offer the best value for money. There are competitors with thicker and stronger steel and perhaps a better fit and finish. But my barbells are the best dollar for dollar. We also offer many unique designs that are typically not available for home users. For example, one of our best-selling products is the Belt Squat Machine for under $ 2,000. Only one other company sells it for that price. And everything else on the market is off-the-shelf, which is very expensive.
And we don’t sell on Amazon. Here in Canada, maybe 10 percent of our pre-pandemic sales came from Amazon. And then the pandemic. I then decided not to give a single percentage point to a company that doesn’t do anything for my brand if there is only obscene demand. And I don’t know if we’ll ever return I like keeping all these customers on my platform and giving them the best experience possible.
Not worth fighting teeth and nails in the Amazon market.
Band wood: You sing my notes right in my alley Let’s talk about the crazy demand for your products due to Covid. How do you keep customers happy?
Congratulations: We encountered two huge hiccups. The first was that everything we sell comes from specialist suppliers. We do not use commercial agents. We buy dumbbells from a factory that only makes dumbbells and nothing else. We are a major customer for some of these factories. We are not to others.
At the beginning of the pandemic, some big players like the chain stores devoured all capacities and raw materials. Three of our main suppliers have sold us. Only: “See you later. Get your weight plates from somewhere else. “But we couldn’t get them anywhere else because nobody was taking in new customers.
So I set up a completely new infrastructure for the production of iron weight plates in Vietnam. And as far as I know, I’m the first to do it for export from this country. There is domestic production there, but not much export. I went from the ground up and built this supply chain there. It took a lot of time, money, and effort.
The second hiccup was a severe shortage of containers from Asia to North America. For years we used a reliable freight forwarder who set everything up. We didn’t have to pay the freight until the product arrived. Then came Covid. It was a hectic mess that called hauliers every day and asked, “Do you have space? Do you have space Do you have space “
And the cost of shipping containers has tripled or quadrupled since the pandemic began. Lots of dirty tricks, such as middlemen selling VIP space on the containers for an extra $ 4,000. Crazy stuff.
It was hard. We learned the hard way. We pre-sold a lot before the pandemic. We would tell customers they could buy it now if we were shipping in the same month. Then Covid struck. We got burned pretty badly. We could not fulfill these orders with containers that had been in port for weeks and could not be unloaded.
We’re much better at tracking containers and planning inventory now. We work much more closely with our suppliers and ask, “How can we maximize your efficiency? If we buy 100 items, will it speed up manufacturing and shipping? “
We’ve completely redesigned the way we order and plan our inventory and logistics.
Band wood: Change of direction, what is your ideal customer?
Congratulations: In the beginning I focused on sales that we all know are a stupid number. I tried to sell wherever I could – retail stores, gyms, home gyms, whatever. We took a close look at our numbers three years ago. It was clear that we needed to focus on the home gym user. This is our bread and butter. We have to adjust to that. The segment has the best margins and the fewest warranty problems. So, yes, our focus is on the home user.
Band wood: Your website is based on WooCommerce. Do you like it?
Congratulations: Good and bad. I only complained about it a few hours ago. I started at BigCommerce and stayed on that platform for maybe five years. I can’t remember why I switched to WooCommerce. I think BigCommerce had raised their prices. Perhaps I didn’t like to bother with them anymore. And I met a developer who sold me on WooCommerce.
It’s been a double-edged sword ever since. I love that I can do everything with it, completely under my control. The thought of Shopify or BigCommerce dictating what I sell is no good.
WooCommerce offers a number of features. It’s so far ahead. It’s a bit clunkier, but it has a lot more features and it’s a lot cheaper. However, the downside is that it requires a lot more maintenance. There are many more mistakes. And we always fight at speed.
But I don’t think I’ll ever switch. We hope to have a new website launched in the next month or two. It should be a lot faster. If I were to start over, I would probably go with Shopify. But I’m glad we’re at WooCommerce now.
The level of sophistication that we can achieve with WooCommerce is one such competitive advantage. For example, one of my leading products is called the Garage Gym Builder. It walks you through choosing a bench, rack, and bar. And as far as I can tell, it doesn’t compare well on Shopify or any other platform. This product generates most of our sales. We use a plugin, a WooCommerce Composite Builder.
WooCommerce’s product bundling system is also very sophisticated. It works in conjunction with WooCommerce Composite.
Another great feature is the ability to display freight prices at the checkout. We use freight companies to deliver products to customers. However, it was difficult to report freight costs as none of these companies had a system in place, as is the case with UPS, for example.
Then one of our carriers created an open API. A developer has used it to create a live plugin for freight offers for WooCommerce. Now I can offer customers freight quotes at the checkout, which is a huge benefit.
Band wood: Where can people find out more about you and Bells of Steel?
Congratulations: Our website is BellsOfSteel.com. To get in touch with me personally, send a message on the website. Somebody will show me.