How I Started A $110,000/Month Business With My Father Selling Green Tech Products

$110,000
revenue/mo
2
Founders
10
Employees
product
tutiendaenergetic...
from Pamplona
started November 2009
$110,000
revenue/mo
2
Founders
10
Employees
1.43M
alexa rank
290
followers
6.03K
subs
shipping
customer service
productivity
payments
analytics

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

My name is Borja. I am a 36-year-old father-of-three from Spain that runs a retail business called tutiendaenergetica.es (it translates as “yourenergyshop” in Spanish). We have a shop in Pamplona - yes, that’s where the Running of the Bulls happens! - and an ecommerce site aimed at the Spanish market. We sell - mainly to end users - 2 types of “green tech” products, as I call them:

  1. Solar PV components , such as solar modules, inverters, charge controllers, batteries… We also provide ad-hoc technical proposals - based on each client’s energy consumption patterns - and professional installation services across Spain.
  2. Electric Mobility vehicles , such as e-scooters, electric bikes, e-kits, motorcycles, mobility scooters, e-skateboards…. We have our brand, Fotona Mobility, that has recently started offering for distribution to other retail businesses on a B2B basis. Also, we have specialized in manufacturing/renewing lithium-ion batteries which allows us to offer our electric vehicles with different range options depending on the user’s needs (and pocket!). Finally, but not least important, we have a repair workshop to provide an excellent after-sale service to both our clients and users from other brands.

What’s so unique about our business is that we offer a rather large catalog of these 2 types of products that, although they are obviously different, they “make sense” together to our eco-friendly audience. This reinforces our image as a one-stop-shop that you must visit if you want to go green in your life.

Since we started using our sales/invoicing program in late 2015 we have built a database of +7000 clients - unfortunately, we didn’t keep a proper record of our clients for the first few years. Year to date (Jan-Aug) we have already made as much revenue as in 2018 Full Year. We are pushing to achieve 900k USD this year but, if we manage to capitalize on the Xmas period (which we have never been too good at) and some new e-mobility formats we’ll present in the next we next few days, I think we have a fair chance to reach 1M USD in 2019. That would be an awesome milestone to celebrate!

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products

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

As with many things in life, the start of tutiendaenergetica.es was a consequence of a number of circumstances. Back in 2010, I was living in the UK working as a Revenue Manager for a local hotel chain - I studied International Hospitality Management in university, by the way. I had a good progression in the hotel business since leaving college, working my way up in the London hotel scene. I worked for world-renowned companies such as Jumeirah and InterContinental (IHG group) and by the age of 27 I was making $43,000 + incentives per year (which was an acceptable wage for someone my age within the hotel business at the time), taking care of the Revenue Management strategy of 2 hotels totaling +700 rooms.

However, in my last position, I was very miserable and soon grew quite apathetic about the job itself. In the beginning, I blamed the working environment, which I disliked, but with time I realized that I had pursued a professional path that I wasn’t cut out for in the long-term. That was a tough moment of clarity for me. I was well aware that any career move to different disciplines would mean a sudden drop in income and a few years of waiting to regain a certain seniority level at the new job.

Back home in Spain, my dad had resigned from his job in banking around 2006 and had founded a company (fotona) specializes in designing and installing Solar PV projects. Given my background, I knew nothing about solar at the time (neither did he!), but I did accompany him to his first business trips to trade fairs in China or Germany as an interpreter during my holidays, and helped him exchanging emails with suppliers and investors on his behalf at nights.

Soon he started asking me to leave the UK and join him in his new venture. For the first few years, I declined his advances as I was absolutely focused on my hotel career but the more I got involved with the business, the more I liked the strategy and sales side of it. I had many business ideas since my days in college - mostly related to the hospitality industry - but had always missed the drive and overall business knowledge to see them through. However, seeing my dad transiting from a desk job to a flourishing new career at 50 inspired me more than anything in life.

In the summer of 2010, things sped up for me and I had to make a tough decision about my life. After much thinking, I finally decided that it was the right time for me to say adios to hotels and go back home with my well-earned savings. I was single with no major attachments in the UK other than personal relationships.

However, I also knew I didn’t want to “work for my dad” having left my hometown when I was 18 and led an independent life ever since - I needed the challenge to invest my money and time in. Around that time, my dad was going on about opening a large wholesale warehouse for Solar PV products to supply other professionals. Like a big supermarket aimed at electricians, installers and similar trades. I took on that idea but suggested we focused on online sales and end-users, and we include other range of green technology products such as solar-thermal systems, small wind turbines, LED lighting, solar water pumps… and, just to fill up some gaps in the catalog, we’d include some electric vehicles like electric bikes and motorcycles which I had never seen IRL. So we gave it a very obvious name and both happily invested in it - tutiendaenergetica.es was born.

Do your research. Make sure that your product or service brings something different to your market.

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

As a retail business, we didn’t design any of the products to be sold. Our challenge was to find quality and cheap suppliers for our range of products, and obviously China is the place to go for that. However back in 2010, Alibaba wasn’t as comprehensive as it is today and the online presence of Chinese manufacturers/suppliers was very limited (even more than today!).

Luckily for us, we had already collected tons of brochures from different Chinese manufacturers in past trade fairs. We also managed to obtain good business contacts through our steady Chinese suppliers of Solar PV components. To be absolutely honest, we knew we had a good idea, but in hindsight, the execution was very poor. We didn’t do enough research on the Spanish market needs nor we understood the technical details of the components we were ordering. Since there were no other businesses we could benchmark ourselves against, we didn’t know what range of products would be successful so we did what you should never do when starting a new business you have no experience in: we purchased a large amount of basically every product we thought would fit the target audience of the shop, just because they were cheap and we had the cash.

We rented a (too) large warehouse in an industrial park outside Pamplona and 2 months later we received 8-9 40’ HQ containers from China full of electric bikes, solar modules, batteries, wind turbines, helmets….

At that time we didn’t care/understand much about brand strategy, we knew tutiendaenergetica.es was a new and unknown company so using the name on the products could have been counterproductive. However Fotona - my dad’s company - was fairly known locally after 5 years in the solar business so we decided to stick the logo on every product.

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products First shop

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products First exhibition we attended in Barcelona

Describe the process of launching the business.

We launched the e-commerce a few weeks after we opened our (too large) shop in Pamplona. I’ve been a heavy internet user since the mid-90s but by 2010 I had never really shopped online so I wasn’t sure what e-commerce should do or look like. Since I had just returned to Spain and didn’t know any IT providers, we commissioned our website to the same marketing firm that had developed my dad’s company website.

To be honest, I can remember our first website to be more aimed at being indexed by Google and let local potential customers find our contact details than anything else. Of course, it was functional in the sense that you could make a purchase in it using your credit card, but that was about it. No videos, no good pictures, copypasted product descriptions… quite cringe-worthy when I think about it.

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products

Despite the big expenditure on renting the shop and purchasing our first range of products, initial funding was not a big issue. I had piled up some savings over my years working abroad and house-sharing and my dad had done quite well with his Solar PV company, so we went solo - no banks involved.

The first months in business were quite profitable due to 2 facts:

  • We were the only online shop that sold (and stocked) solar panels and related PV components to end customers, not requiring minimum order quantities.
  • Spain was just coming out of a 3-4 year boom period concerning solar energy due to the (now extinct) Feed-in Tariff program, so it was a good time to be out there with the right product for those who wanted to install solar panels in their homes or business as an investment.

However, the rest of our catalog was getting very little attention, including our brand new range of electric mobility products, which proved to be a logistic and maintenance problem in the next few years. But, what really hit us was the 2012-14 period due to the dire consequences that the Financial Crisis had in the Spanish economy.

For us in particular, not only did the Solar FIT programme ended abruptly, but the entire policy of the government towards solar took a 180º turn making it less appealing for customers. At a wider level, many Spanish businesses failed due to the negative effects of the crisis such as never-seen-before unemployment rates (see chart below)

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products

The Biggest lesson learned? If you are going to introduce a new product in your market, it’s much better if you settle for a small varied range of products to showcase and put the extra money into a good marketing campaign.

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

Three words: You must specialize. I don’t mean that you have to drop your entire catalog and focus all your efforts on selling/marketing the best pink cotton socks in the world so when somebody wants to buy a pair of nice pink cotton socks, they will definitely buy them from your shop.

I just mean that you must keep an eye on trends within your business and react on time in order to offer the products or services that are sought after in your market - even if it’s only for a few months. For example, there is this particular model of electric scooter that sells very well in Spain due to a nice design and very aggressive pricing (it costs 100USD less than our cheaper e-scooter).

In the beginning, we saw it as a threat and actually looked at adding a very similar model to our catalog to compete at this low-end level. As we were trying (and failing) to react to this new product at our doorstep, we started getting users of this new e-scooter coming into our shop with a flat tire, asking if we had a repair service as the tire was so tightly fixed onto the rim that they were unable to repair it themselves. After a couple of services, we found a quick way to have the tire repaired and the word spread out quickly as the number of users grew, so now there are days we were fixing 6-8 e-scooters (same model, same problem)... and, what’s funny, we are charging an amount similar to the profit we would have got should we have sold that scooter in the first place.

Of course, soon some other shop in town will realise that there is a large number of these e-scooters going around and that they tend to get flat tires very regularly so we don’t think of it as a long term business, but by then we will have made quite a large sum of easy money just by offering the right service at the right time.

As I was saying earlier, the financial crisis hit Spain harder and for a longer period of time than it hit other European countries, so we cannot speak of proper growth till late 2014 - early 2015. In particular, the turning point was in Summer 2015 when I convinced myself that in order to increase a wider market we needed to set up a proper online strategy - at this point we had a framework agreement with the same marketing agreement that had launched the first version of our website by which they took care of a basically everything to do with business promotion both offline and online.

In order to achieve that objective, I hired a young girl from my town that had been working on digital marketing in Madrid for a few years. This was a gamble because there were not many local professionals in town and this girl really didn’t know the product we sold at all nor had worked for e-commerce before. However, after a few months of working closely with her, redoing our website from scratch, resetting our pricing policies, rewriting our product descriptions and launching our youtube channel with a fair number of presentation, unboxing and tutorials...the results started to show, and we dropped the marketing company on the way.

how-i-started-a-110-000-month-business-with-my-father-selling-green-tech-products
This chart shows online visitors by month 2018 vs 2016

Another important point for us was understanding what type of online business we are and reacting to it. For starters, our typical client is a male in his 40s/50s (hey, who else can afford products with an average price tag of 1500USD?) with access to the internet but yet reluctant to make a purchase online without having a certain level of previous interaction with the seller.

Because of the nature of our products, we get many inquiries from potential customers who are interested but, given the “technological” aspect of them, they have a bunch of questions to ask… or simply they just want to make sure there is somebody at the other side of the phone. That’s why we have made an extra effort in creating a wide range of communication channels that allow us to provide real-time answers to all of them. What channels are these?; email, phone, webchat, WhatsApp, social media (Youtube, Facebook, and IG) and several contact forms throughout our website. So, while we might not get many clean, straight-to-the-point online purchases, we have learned to capitalize on those previous inquiries to build additional trust with the client and upsell whenever possible.

Concerning other online sales channels and actions, we run several campaigns on Google Shopping that we renew regularly. We used to invest in Adwords at the beginning but after comparing the result with Google Shopping, we only run ad-hoc campaigns concerning some of the services (not products) that we offer such as repairs, Li-ion battery restorations, installation of solar PV systems…. We used Amazon during the recession years in order to get some cash in and get rid of some cheaper products and others that were taking up too much space in our warehouse, such as regular bicycles (non-electric) and e-bikes with lead-acid batteries that were bound to deteriorate quickly, however, the complaint rate concerning the e-bikes was high so ended up deleting our catalogue.

You must give it your 100%. Perhaps quitting your day job (if you have one) is not a good idea at the beginning but, sooner or later you will have to take the leap in order to make it successful.

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

Today it’s the best time to offer the type of products that we sell for both e-mobility and solar energy are current affairs with constant exposure in the media, and both have a positive outlook from the public as eco-friendly, proven technologies. So yes, the future looks rather bright but, as with every business, we cannot afford to be complacent and need to keep an eye to new formats, trends and pricing from competitors.

While we have steady growth via on-line and off-line sales (revenue +55% YTD), we are well aware that major growth will only come from finding new sales channels. This year we have taken an important step by launching fotona mobility which is both a showcase for our products and services (nice studio pictures, Google-friendly descriptions…) and a B2B website where verified shops and retail professionals can register and make their own quotations, download marketing material, obtain invoices and open tickets. Since we only managed to launch it this August, we missed much of the summer season but we’ll definitely be ready for Christmas with some new additions to our catalog.

There a few other projects in the pipeline that I hope will materialise in the coming months, namely:

  • I am in talks with an international firm to become their official repair service for their e-mobility sales in Spain, which is basically what we already do al workshop level now but at a much larger scale.
  • We will be launching another e-commerce that will offer refurbished, second-hand e-mobility products. The idea would link well with a trade-in plan or renewal scheme in tutiendaenergetica.es, by which new clients could hand in their old e-bikes o e-scooter for a discount in the purchase of their new Fotona Mobility product.
  • Franchising. This is an idea I’ve been gathering info about but, while tempting, I think it would take up most of my time and resources so it’s not something on top of my list at the moment - although maybe it should.

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

Loads. The list is large but I will summarise in a few ideas within 2 groups: Thing I did wrong vs Things I did right.

Wrong

  • As ignorant as we were, when we first opened the business, we purchased all e-mobility vehicles with batteries. At the time, most of them were sealed acid lead batteries which, after 1-2 years in storage resulted in some nasty, corrosive leaks that damage the vehicles (in a few cases, luckily) but more importantly forced us to buy new batteries at an extra cost.
  • Our first location choice was wrong. We rented a large warehouse in an industrial park just outside the city that cost a lot of (our) money to convert which lead to (surprise, surprise..) a few daily visitors. Those who came in did it either by word of mouth or because of our off-line advertising in our local newspaper, mainly.
  • Not taking e-commerce (really) seriously from the beginning. I think it would have helped us to suffer less stress during the recession and, who knows, maybe we would have already taken some growth-oriented steps that I am planning to take in the future. We could be a few years ahead.

Right

  • Launching our own brand - Fotona Mobility. We only sell this brand and this gives us some extra credibility as a business. Silly example, but when you go to a hotel, and they have these nice looking shampoo bottles with the hotel brand/logo on them, you can help thinking “wow these guys are in business”.
  • Changing locations just when the business proved it could be profitable. Also, from a personal point of view, it has been a good investment as I purchased this nice shop downtown and rent it out to our company at the same monthly price as it used to pay in the outskirts. So the shop gets much better exposure and I get my mortgage paid by… well, our company. Win-win. Whenever possible, do not rent your premises from someone else but you.
  • Choosing products that people actually want to buy. This is my first experience in retail so I don’t know when it would have been like to sell groceries or clothing, instead. My market might not be huge and on-line sales may be problematic at times but this only encourages us to find ways to simplify the process and after-service. Hey, if it were easy everybody would do it.
  • Taking on manufacturing our own li-ion battery packs. They are the core and most expensive part of any electric vehicle, so it was worth going through the whole trial-error learning curve. Now we manufacture for ourselves and other local brands that prefer to have a local manufacturer than a Chinese one (even if it’s cheaper).

What platform/tools do you use for your business?

We designed a custom-made software (via a local programmer) to control our inventory, website descriptions, quotations, invoicing and client database. It’s like a big database which is connected to our website so, if for example, we change the price of a product, we do it in this program and the change appears on the website too. We just keep including new features as we need them.

For emailing, we use MailChimp. We run weekly emailing campaigns. We also try to upload videos regularly which takes quite a lot of my time (I’ve self-taught to edit them) but the feedback and ROI are better than via Facebook, for example.

Another major discovery (at least for me) has been Google Drive. My marketing manager had suggested a few times to me in the past but, busy as I always am, I never saw a use for it. Now I realise that being able to share files (spreadsheets, mainly) with marketing, accounts, technicians, and salespeople separately, saves me a lot of time and is much more effective. All changes get registered instantly and I can access the files whenever I am.

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

I am not a big book reader - I just don’t have the time - but I do read the world news constantly on the internet. I just try to be informed all the time. I need it. It’s amazing how many ideas come to your mind just by keeping your eyes open in your daily routine.

I am also a big fan of documentaries and films based on real business leaders. I have seen many, but the last one I remember enjoying was The Founder about the guy that bought McDonald's from the McDonald brothers and franchised it. And he was 52!

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

Do your research. This sounds very obvious but, believe me, not everybody does it. Make sure that your product or service brings something different to your market.

Unless your personality is very “accommodating” towards others and you are known as a good peacemaker DO NOT go into business with others, especially if they are friends. Believe me, you will lose them. If you need money, take a loan. If you need expertise, just ask. I haven’t experienced this myself but have seen it repeatedly from people very close to me.

You must give it your 100%. Perhaps quitting your day job (if you have one) is not a good idea at the beginning but, if you are going to go into business for real, sooner or later you will have to take the leap in order to make it successful.

Are you looking to hire for certain positions right now?

Not today but I am always on the lookout for good technicians (electronics and/or mechanics).

Where can we go to learn more?

-  
Borja Eraso,   Founder of tutiendaenergetica.es

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