My Gym Passion Led Me To Start A $15M/Year Fitness Equipment E-Commerce

Kaevon Khoozani
Founder, Bells of Steel
$1.2M
revenue/mo
2
Founders
38
Employees
Bells of Steel
from Russell, MB, Canada
started October 2010
$1,200,000
revenue/mo
2
Founders
38
Employees
276K
alexa rank
25.6K
followers
market size
$1.3B
avg revenue (monthly)
$675K
starting costs
$30.1K
gross margin
30%
time to build
720 days
growth channels
SEO
business model
E-Commerce
best tools
Instagram, NetSuite, Klaviyo
time investment
Full time
pros & cons
44 Pros & Cons
tips
3 Tips
Discover what tools Kaevon reccommends to grow your business!
email
shipping
customer service
social media
productivity
app
education
Discover what books Kaevon reccommends to grow your business!
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Hello, who are you and what business did you start?

I’m Kaevon Khoozani, and my business is Bells of Steel, where we've been passionate about delivering affordable industry-leading fitness equipment since 2010.

Our flagship product is an entire home gym. It includes a power rack, barbell, bench and plates, and drives the vast majority of our revenue. Our largest generating individual product is one of our power racks called the Light Commercial Rack.

Although we sell to a broad spectrum of customers, we base our voice and much of our marketing on our customer avatar who is essentially me.

A 33-year-old married man with his first kid. He used to work out a lot before his baby arrived and likes to bench, squat, and deadlift, but has never competed in powerlifting and has no plans to.

He makes a good salary, and his time is valuable, so he realizes he can't keep his training up without a home gym. He finds Bells of Steel — a perfect “bang for your buck” match. Prices seem too good to be true, but he checks out some of our thousands of reviews and educational content to seal the deal.

Time is money, so he clicks on our “Home Gym Builder” and kits out his entire gym — easy peasy. It gets shipped in a day, and he’s got his new dream gym before the end of the week.

This year, we’re on track to do 15 million (USD) in sales.

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

I like to say strength is in my DNA. My grandmother’s maiden name is Pahlvani, which loosely translates to “strongman,” and her brother owned a “house of strength” in Iran, where men would gather and swing traditional heavy clubs and exercise in ancient methods.

I started working out when I was 13 years old, and it opened many doors for me.

Long story short, after a brief stint in Europe, I moved to the city of Calgary in 2008 when I was 23, which was experiencing a massive oil boom.

I got a job at a local fitness equipment store and took night classes to finish my business degree. At the time, I had started to get into real strength training, like Olympic lifting, strongman, kettlebells, and powerlifting.

The problem was, there was nowhere to get the equipment. So I talked to my boss at the fitness store and told him we had to start carrying bumper plates, kettlebells, etc. He was not interested but offered to let me order from his supplier in China and share space on his containers so I could sell them on the side.

Now, this was way back in 2009. Alibaba was like the wild wild west, and the chances of you getting conned were pretty high, so this was a fantastic opportunity.

On January 10th, 2010, I placed my first PO for $2700 with a mix of student loan money and savings from my summer bouncing gig at the notorious Calgary Stampede. Shortly after, I began selling the gear directly to my network of fitness people and on craigslist - out of my $500 1991 Ford Festiva.

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Shortly after, a friend of mine introduced me to BigCommerce, and on July 18, 2010, I did my first transaction with them. In my first year, I did about 150K in sales and moved into a 3PL in 2011. Shortly after, I graduated, quit my day job at the fitness store, and went full time with Bells during the day and as a head bouncer at a local hipster bar at night.

Business was good, but up until now, I had just considered it a side hustle that would build my resume for my eventual corporate job. My girlfriend (now wife) and I decided to backpack Asia for five months as one last huzzah. I kept running Bells of Steel from the beaches of SE Asia (can you tell I read the 4-hour workweek), and it continued to grow.

When we arrived back in Canada, I began applying for corporate jobs. The problem was, nobody wanted to hire me. And I realized no one in this world realized my potential as much as I did. So I said fuck it, I’m going all in. I did one more bouncing stint at the 2012 Calgary stampede, and that’s the last time I ever worked for someone else.

being-a-gym-freak-led-me-to-start-a-15m-year-fitness-equipment-e-commerce

After a few more years, I ran into the most common problem for any e-commerce entrepreneur; I couldn’t get any funding. My now-wife was generously letting me use her 10k line of credit, but the banks wouldn’t touch me, and the alternative lenders like there are now did not exist. I was spinning my wheels at $300k in sales, and I couldn’t budge.

My fundamental error here really was I was not paying close attention to my margins. I have always been a sales guy; I just wanted to turn inventory as fast as possible, even if that meant I was continually out of stock and wasn’t making the money I should. Here’s a tip: revenue is a vanity metric.

So I did what I thought was logical and set out to sell the business. Lucky for me no one wanted it, and instead, one of my closest friends, Bryan, decided to buy half of it in December 2014 as a silent partner. In 2020 he quit his chemical engineer job and came on full time with BoS as the CFO.

One of the biggest missteps I see with new e-commerce companies is not creating a fantastic product. One of the core reasons we’ve managed to scale to $10 million+ is a relentless focus on creating a high value, well-designed and excellent product line.

Currently, 90% of our sales come from our website. We’ve always sold on Amazon but mostly used it as a side tool to increase sales. I’ve always been anti-Amazon, for really the same reason I prefer Woocommerce to Shopify: you own your customer data and experience and are not relying on a third party. A major goal in 2022 is to scale our Amazon presence for that reason.

2021 has been a different year for us. For the first time in the company’s existence, we have had almost adequate inventory and cash, which has led us to invest heavily in Google and FB PPC. But I wanted to breakdown our initial marketing strategy and the steps in order of what we focused on first to last;

  1. Word of mouth and local networking
  2. Well written and SEO friendly product descriptions and videos
  3. Organic social media posts, mostly Instagram
  4. Email marketing, I recommend this https://www.frontrowcommerce.com/ course paired with Klaviyo.
  5. FB ads
  6. Google ads
  7. Bing ads
  8. Current large project influencer marketing, trying out the agency Kynship.

A big part of driving recurring customers is our email marketing.

Another factor is simply launching new designs. I launch around 20 new products a year and regularly cull low-performing ones.

When talking about Bells of Steel, I often refer to pre-pandemic and now. 2020 was, luckily for us, a massive boost for our sales. But more so than just the temporary bump in sales/profits, it opened up a world of opportunity to keep that momentum going. We are finally in a position where our books look fantastic, and we made more money in 2020 than all other years combined. This increase has allowed us to get proper financing and be able to scale.

Bells of Steel has been profitable from day 1. Still, I think the thing I’m most proud of, and this is largely due to my partner and his relentless focus on our financials and inventory prediction, is we’ve continued the momentum from 2020 and scaled 2.5 x from 2020 and about 7 x from 2019.

One thing I did not expect from scaling is just how badly your infrastructure breaks. Everyone is always chasing that growth, but do you have any idea of what you need to do that?

If I could do it over again, I would have stuck to my guns more regarding pricing. If you can’t sell something and make money, don’t sell it. Simple, I know.

At the end of 2020, we were breaking. I was the most stressed and miserable I’ve ever been in my business. It was a tsunami, and I did not know what to do. I called a fellow e-commerce friend and told him my situation, and he had some sage advice. I could either:

  1. Sell the business and get out
  2. Focus on profitability and remain small

Keep hiring people and scaling until I no longer wanted to quit.

So I chose 3, scaling from 3 million in sales to 15 million in 18 months required:

  1. Hiring about 39 people
  2. Going from a 13,000 sq ft warehouse in Calgary to 30,000, opening a Toronto warehouse. And Indianapolis retail store and adding 3PL in LA to meet our west coast demand.
  3. Upgrading to an ERP (Brightpearl,)
  4. Completely overhauling our website, and switching to AWS so our site would stop crashing when we had a sale.
  5. Implementing a more robust customer service software (Freshdesk).
  6. Starting manufacturing in Vietnam from scratch after several key factories left us in the dust for bigger customers.
  7. Implement a project management system (Clickup)

And let me tell you, it has not been fun.

Our retail store in Calgary AB:

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

People and processes are the two cores we’ve been focused on to achieve and maintain over $10 million a year in sales. Pay that team well, give them autonomy, set up decent SOPs, and they will take you to the moon.

Hiring and trusting people is the single greatest thing you can do to grow.

We’re cooling off in 2022 and plan to enter Europe, put a greater focus on Ontario, and continue to scale in the US - which is about 35% of our overall revenue, despite being 10 times bigger than Canada.

We’ve been profitable from day 1. 95% of our sales are from our website, 4% from our wholesalers, and 1% from our Amazon store.

In 2021, the demand hasn’t been as high as in 2020, but we have a high ROAS for ads. While it’s very product-specific, every ad that we run is profitable.

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

As far as what I’ve learned and some time-honored advice for you aspiring entrepreneurs;

In the beginning, I was so focused on selling that I would heavily underprice my products. The razor-thin margins and lack of financing options left me spinning my wheels for a while. If I could do it over again, I would have stuck to my guns more regarding pricing. If you can’t sell something and make money, don’t sell it. Simple, I know.

I was really scared to hire my first employee. At a business Bootcamp when Bells of Steel was still just me, a mentor said that he’d pay me $5,000 if I hired someone and it didn’t work out. I’m not sure if he would have followed through with that, but hiring and trusting people is the single greatest thing you can do to grow.

A major place where I think small businesses fall flat is on their “About” page on their website. As a small-medium-sized business, YOU are the salesperson, and YOU are the brand — at least for the first little while. The landing page on that site should be a picture of you with your product and a call to action — telling your story. That’s your biggest competitive advantage as a small or medium business owner, and so many businesses lose out on building trust by leaving that out.

One thing I am quite candid about is the fact that I was raised by a single mother on welfare. There are a lot of things in life that are brutally hard when you are poor, and starting a business is no exception.

So this one goes out to all my poor brothers and sisters reading this: there is one single advantage you have in entrepreneurship - you already know what it’s like to be broke.

Use this to attack your goals with ruthless tenacity, with no fear of failure because you have lived and breathed what your well-off counterparts have nightmares about if they fail.

You also need to be so good that you cannot be ignored. You don’t have the luxury of being mediocre and succeeding.

And lastly, don’t fall victim to comparing yourself to those who had a massive head start, and don’t fall for these false narratives these already rich entrepreneurs fabricate.

It’s not the same game you’re playing when you’re walking the trapeze line, and your competitor has a safety net. Gary Vee's dad gave him a business to run; Michelle Romaovs dad was the CEO of a billion-dollar oil company; Elon Musk's dad owns emerald mines. Don’t look to them for inspiration because it’s not a grind when there’s nothing on the line - it’s playing dress-up.

What platform/tools do you use for your business?

To scale, we’ve increased the number of tools and software that we use:

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

Nowadays, I mostly stick to the ECommerceFuel podcast and forum for ideas and guidance. Back in the day before e-commerce took off, the 4-hour Work Week by Tim Ferris was pivotal in thinking differently about business.

That said, I try to avoid consuming too much information as I already have a game plan and a lot to do.

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

Perfection is the enemy of progress, pride is the enemy of profits, and you only coast one way.

Work/life balance is really difficult to achieve, It’s mostly a joke, but I think Mr Burns said it best:

being-a-gym-freak-led-me-to-start-a-15m-year-fitness-equipment-e-commerce

being-a-gym-freak-led-me-to-start-a-15m-year-fitness-equipment-e-commerce

Where can we go to learn more?

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Kaevon Khoozani, Founder of Bells of Steel
Pat Walls,  Founder of Starter Story
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