How We Started A $3K/Month Local, Organic Foods Online Store

$3,000
revenue/mo
2
Founders
0
Employees
product
janori
from Munich, Germany
started November 2020
$3,000
revenue/mo
2
Founders
0
Employees
1
followers
market size
$9.8B
avg revenue (monthly)
$36.7K
starting costs
$61.7K
gross margin
50%
time to build
12 months
average product price
$7
growth channels
Advertising on social media
business model
E-Commerce
best tools
Quickbooks, Instagram, Kickstarter
time investment
Side project
pros & cons
20 Pros & Cons
tips
5 Tips
Discover what tools Johanna reccommends to grow your business!
email
social media
Discover what books Johanna reccommends to grow your business!
Start A Specialty Food Business

Hello! Who are you and what business did you start?

Hi there! We are Raphael and Johanna Spannocchi, the founders of janori. janori sells delicious, local, organic food. Like organic coffee, great, slave-free chocolate handmade in Munich, Germany, and some of the finest Gin on the planet.

We started in November 2020 and currently offer 80+ products from 14 vendors. To make it easy for our customers to support small businesses and get a great variety of deliciousness delivered without fees to their doorstep we offer a new food-box every month. The box contains a clever mix of delicacies and comes with a beautiful illustration on top. Our best-seller so far was the Christmas box, containing chocolates, sugared almonds, and more.

Our other bestsellers are the original sugared almonds usually sold at the Munich Octoberfest. Since this massive beer celebration was canceled in 2020, we were able to secure a portion of this delicious original for our customers. Made from just 3 ingredients, you get an amazing taste without the additives like wax and shellac often found in these products from bigger, industrial manufacturers.

how-we-started-a-3k-month-local-organic-foods-online-store

What's your backstory and how did you come up with the idea?

Johanna is a trained musical actress who honed her craft in various theaters in Bavaria and Austria and has a “faible” for singing at funerals, where she manages to transform a usually sad occasion into a moving celebration of departure and renewal

Raphael started as a Java developer and then became a trained audio engineer working on studio albums from the likes of Falco or local heroes EAV and then moving into live sound. Later he moved into international sales.

We’re both into food and love discovering new and delicious flavors. The more we learned about food, the more we realized that the current food distribution system is severely flawed, if not completely broken. Huge, and powerful gatekeepers continuously exert price pressure on manufacturers, who pass it on to farmers, who then have to ravage and plunder our mother earth to make ends meet.

What would happen if producers could sell directly to customers, without needing to hire a marketing department, staff a fulfillment center, and worry about SEO and FB ads? What if there was a platform that told their story and let customers get to know the people behind their food? That’s why we created janori. We want customers to be able to form connections with the people who produce what they eat. On janori.de you can watch videos, read stories, and get to know the producers personally and intimately. At the same time, you’ll find products that are not available in your supermarket and that simply tastes delicious.

The criteria for listing at janori are: largely handmade, ethically sourced and produced in Germany, organic if possible.

While I worked as a freelancer all my life, I felt strongly that I needed to be more in control of my destiny. Wanting to start an enterprise for some time, I tried to: start a used AV gear sales business (boring), do agile transformation coaching with a wonderful co-founder (she stopped because she started another business a few months before and simply had no time), sell my homemade granola (price point of the granola in stores way too high, I wanted it to be low carb - keto), and even launched a cryptocurrency focused on the use of renewable energy for mining (Bitcoin Clean, went nowhere).

Johanna and I had about 25k€ saved when lockdowns started in March 2020. Since both of our professions were considered non-essential we watched in awe, as our bookings for that year were slashed to 25% quickly, with the rest following suit over the next month. We planned to get married in June, and for some reason had decided to do our honeymoon in January, in California, where we went down route 101. A trip I’ll never forget, the beauty of nature, the ocean, the people, we just loved every bit of that.

During our trip, we talked about what kind of business we could start together so that both our career-goals would be better aligned. Selling delicacies was quickly the idea we loved the most. A physical store was our first impulse, but after lockdowns, we thought that online would be an even better option, and allow us to travel as well.

So we decided to build an e-commerce store. Our big “aha” is when we decided to feature the producers front and center. The passion and ingenuity of these entrepreneurs were simply contagious and we are still convinced that this is what will inspire customers to trust that they will receive something far more valuable than the next good thing to savor.

Creating the site with Shopify was a breeze, thanks to Aaron Berbuer, who created a wonderful visual identity for us. After that, we shot some videos with Janucz Reichenbach, a filmmaker in Munich, and then we showed that to a couple of friends.

At that point, we knew we were on to something and decided to found the company legally and start full time.

Take us through the process of designing, prototyping, and manufacturing your first product.

We started with the values we wanted to represent. After a lengthy brainstorming and elimination session we came up with: Love, Family, Support.

We then approached writing a business plan and found a beautiful online tool of a German government agency that supports startups. After finishing v1 of the business plan, we knew we needed help to get it to the next level. We met with 2 coaches and then started working with Katharina Bickel from Catlabs. That was one of the best investments we ever made. She took us through the process of creating customer personas, and a marketing canvas, and a business proposition canvas, and a lot just fell into place there.

We rewrote the business plan from step 1 and submitted it to a business plan competition. We came out in the very middle of the pack, with jurors hating or loving our plan. We saw that as validation and decided to found the company by creating a Limited Liability Company.

The webshop itself came together quickly because the visual identity that Aaron Berbuer created was compelling, and Shopify makes the creation process a breeze.

how-we-started-a-3k-month-local-organic-foods-online-store Johanna tasting some delicious food at Werdenfelserei in Garmisch-Partenkirchen. Unfortunately, they’re not supplying us yet

how-we-started-a-3k-month-local-organic-foods-online-store Raphael reading a marketing book (One Million Followers, Brendan Kane) in a break while writing the business plan in late May, in Vienna, Austria

how-we-started-a-3k-month-local-organic-foods-online-store Johanna and Raphael near the end of writing the business plan. The picture was taken by my daughter

how-we-started-a-3k-month-local-organic-foods-online-store After finishing the business plan Johanna and Raphael worked at an actual farm on an organic field for a week, to understand the impact supermarket chains and their buying tactics have on our environment. The hardest manual labor we ever did. And very enlightening

Describe the process of launching the business.

We switched the password protect Shopify store to our domain about 3 months before we went live. In the meantime, we had two newspaper articles in regional newspapers and one radio interview. That allowed us to collect 200 email addresses ahead of our launch. This is how our website looks at the moment. We only launched a couple of weeks ago, so not much has changed since then, except for some SEO optimization and speed up work, as well as some Christmas related things and a few blog posts.

how-we-started-a-3k-month-local-organic-foods-online-store

What did change is the focus. We had images of the delicious products above the fold but realized that our main advantage is the people. So we now focus even more on portraying our producers and their stories and their passion.

We financed the business ourselves. Starting with about 25k€ in savings in March, we got some government aid in April (about 8k€) and used that to cover our cost of living, the legal costs, and pay our designer and the filmmaker. These two are really our super team because they pitched right in and created so much for so little in terms of monetary reward. We’ll be forever grateful to them.

Costs were 2000€ for our filmmaker, 3200€ for the visual identity, 2000€ for the coaching by Katharina to get our business plan in shape and 900€ legal costs, as well as a few 100€ for printing beautiful flyers to put into our parcels.

After launching our store to the public on November 11th, we got quite a few customers, thanks to the newspaper coverage we had pre-launch, in the following week friends and family bought some more, so we were happy. After that came a week of absolutely nothing! 20-40 visits per day, no orders. We were desperate. We did some FB ads, but CPC was 0,50 to 1,2€. At 3% conversion that was just too high. So we took a step back, created a special Christmas box, and launched that. We sold quite a few of those, so selling boxes is clearly a good idea.

Actually, our fulfillers didn’t manage to store how to pick&pack the Xmas box in their software in time for us to ship to our customers before Christmas. So Johanna drove to the warehouse (200km one way) and got all the goods. The next morning we realized that the guys at the warehouse got 2 products mixed up, and Johanna had to drive there again! We set up a big packing station in our living room. The place was a mess because we used wood shavings (beautiful) as filling material. But we got the parcels out in due time and got great feedback from a few orders.

We learned so much during that time, most memorably:

Getting help really pays off big time!

Staying true to our core values is super important!

We’re just beginning. Beginnings are hard, and beginners are slow. That’s okay!

Since launch, what has worked to attract and retain customers?

The most important source of customers so far were local newspapers and a local tourism agency who decided to promote small businesses for free during Christmas.

Since we sell regionally produced food, our customers are often the same that also at least browse regional newspapers.

FB Ads didn’t perform well at all for us. We once did a sweepstake in cooperation with four of the producers who sell on our platform and this was an amazing hit!

We got 78 Followers, 256 likes, and 80 comments while starting with 130 Followers!

We’re trying a new agency next month that gets a performance-based rate. We’re really excited. They seem amazing and when they can’t get customers we don’t have to pay.

Email marketing is also really good for us. We use Klaviyo and have some basic flows (abandoned cart, welcome flow, launch flow) as well as some campaigns.

https://www.facebook.com/johanna.effenberger.3/posts/2440228632953030 The newspaper post that got us 200 email addresses

how-we-started-a-3k-month-local-organic-foods-online-store Signup form

how-we-started-a-3k-month-local-organic-foods-online-store Christmas campaign

how-we-started-a-3k-month-local-organic-foods-online-store

I kid you not, the best performing FB ad we ran. Reads “Don’t shop in the tropical forest, shop at real people’s places. Shop janori.

"Tired of the Amazon forest: Prime-Time for small Food startups…”

How are you doing today and what does the future look like?

We’re profitable at the moment because we don’t pay any employees.

Our gross margin is 20-25% depending on the vendor. Customer acquisition cost was extremely low until now, but the agency we will be using charges 20€ per customer delivered. Our shop conversion rate is 3% at the moment. Email open rates are above 50% and click-through on email is 18% or much more.

I’d rather have 2% of a thriving enterprise full of highly motivated people with equity than 90% of something where I work 24/7 and slowly get crushed. Also: one-man shows don’t scale.

Currently, the business is just Raphael and Johanna working full time and much more.

We are only operational for 6 weeks now and have had some repeat customers, but it's hard to know what our LTV will be. Most of our products are pretty addictive, but not something ordered every other day, so we guess customers will come back around 3-4 times per year.

We want to improve recurring revenue by offering one box with a pre-selection of our products themed to the month. We started with a Christmas box with sweets and will be offering a winter eve box with mulled wine, gin, and some savories next month.

We agreed to not use discounts but instead offer more value as an enticement for purchases. So we always look for something our customers can get on top of their order, that will excite and delight them.

We both really hate doing social media, so I want to focus on simply documenting our journey on FB and doing more content. More stories. Good food porn.

We plan to grow 20% month over a month next year and have 5 digit MRR by October 2021. Since we can not support ourselves without income for that long we’ll be looking for investments or a bank loan starting in March ’21.

Long term our goal is to create a circle of support for our suppliers. Offer them a pain-free and thriving marketplace for their products, and offer our customers the closest thing to a personal connection with the producers they can get online. We will do that by creating lots of filmed and written content and if possible want to organize tasting tours and factory visits for our top customers.

Through starting the business, have you learned anything particularly helpful or advantageous?

The biggest mistake so far was not milking the launch more. Newspapers love launch stories and we just started with our outreach way too late.

The best decisions so far were every single decision that meant not doing something ourselves but hiring someone to do it. Somehow it was always cheaper than we imagined and much more valuable than we dared hope for. The best example was Aaron Berbuer for visual identity and Katharina Bickel for coaching. Worth every cent x10.

What really helped was the general trend to localism, supporting small businesses, and a marked uptick in the perceived value of food quality in Germany at the moment. Germany was a country where quantity ruled supreme in the 80ies and 90ies. That started changing in the 00s and now many small creators and entrepreneurs develop excellent food. The stereotypical German focus on craftsmanship and quality really comes to shine here. We’re often completely floored by the disciplined pursuit of excellence our suppliers exhibit.

Raphael had 3 full careers so far and dabbled in dozen other things. From WEEE recycling to sound design for contemporary dance pieces. So learning quickly and experimenting really comes easy to him and that has helped a lot. Johanna has a great way to work with people and that opened more doors for us.

What platform/tools do you use for your business?

We use Shopify as a platform for our website and so far have been extremely happy with that choice. Not having to worry about payment integration, check out optimization, hosting choices. And having access to the app store and community has been a huge boon for us. It’s quite clear why Shopify grows so quickly. An amazing source of free stock images is Burstby Shopify. Simply great.

Other than that we love Klaviyo. It’s easy and powerful. We also use Billbeefor our invoices and are quite happy with that. Currently, our email hosting is Yandex. Yandex is a Russian search engine that offers free email hosting with custom domains, unlimited email addresses, and tons of storage. How cool is that?

Fulfillment is done by Logsta Germany. They ship quickly and the setup was relatively painless. Lately, they have caused us a ton of pain. They grew massively during the last year and have lots of new, often unprepared employees.

We hope we can continue to work with them during 2021 but at the moment this is definitely not certain.

For freelancers, I use Fiverr or post to Facebook. As well as Shopify’s own expert freelancer portal.

What have been the most influential books, podcasts, or other resources?

Patrick Lencioni’s books were super influential in writing the business plan, really doubling down on values and setting up the company. Patrick is a management consultant in California. In his books, he uses stories to illustrate the learnings he shares, and I found the stories a lot of fun to read, and extremely instructive.

Other than that I use Twitter a lot! So much great advice there, and all of it for free. Amazing.

Advice for other entrepreneurs who want to get started or are just starting?

We’re just budding entrepreneurs and apart from that, we’re not business people. My advice is this: If you dream about your own business, there was never a better time to start it than now. Jobs are mostly boring in huge corporations and the stifling bureaucracy there is only going to get worse. At the same time, there is a huge, open, transparent, thriving community of founders and entrepreneurs out there who share all of their learnings, their mistakes, their hits, and their passion for free and easy to find.

It’s simply mind-blowing how much information and support there is out there, just for the taking.

My tip is to get as much help as you can. If you don’t feel you’re good at something or you feel you don’t like doing it: hire someone or convince them to work with you. It’s worth every penny and every percent of dilution in my opinion. I’d rather have 2% of a thriving enterprise full of highly motivated people with equity than 90% of something where I work 24/7 and slowly get crushed. Also: one-man shows don’t scale.

And a quote I love: “obsession is the motor, doggedness is the break” said famed dancer Nurejev. And I love it. When the work loses its playfulness and its sense of purpose and service it just gets worse.

Are you looking to hire for certain positions right now?

We’d love to hire a part-time social media freelancer. Right now we don’t have the funds to do so, but this should happen this year.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Johanna and Raphael Spannocchi,   Founder of janori

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