I Started An Online Stencil Shop And Make $960K/Year

Colin Mitchell
Founder, Stencil Stop
$80K
revenue/mo
1
Founders
9
Employees
Stencil Stop
from Sacramento, CA, USA
started April 2015
$80,000
revenue/mo
1
Founders
9
Employees
770K
alexa rank
78.5K
followers
407
followers
market size
$8.64B
avg revenue (monthly)
$80K
starting costs
$10.9K
gross margin
65%
time to build
210 days
growth channels
Organic social media
time investment
Side project
pros & cons
42 Pros & Cons
tips
1 Tips
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Hello! Who are you and what business did you start?

I’m Colin, and I started Stencil Stop in 2015. We manufacture and sell different types of stencils, including custom stencils, which are some of our best-sellers. Our custom mylar stencils are super durable and reusable and are great for quickly painting a company’s brand, text, or designs on almost any outdoor or indoor surface. Custom layered stencils have become a go-to product for people looking to create multicolored, detailed images or logos.

Since our stencils can be used for a wide variety of applications, our customers are diverse. Our products are used by business owners to paint the outside of their buildings, to promote their companies on the top of the coffee and hot cocoa, and as giveaway items at promotional events. Then we have the DIY side of the business, where our stencils are used by artists to paint canvases, murals, and streets, but also normal people looking to recreate a design multiple times or simply use a stencil as a guide to creating the perfect project.

Today we earn around $100K per month in revenue and are continuing to grow quickly by expanding our product lines and manufacturing capabilities, as well as by solidifying our brand’s visuals and message.

i-started-an-online-stencil-shop-and-make-960k-year

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

In 2015, I had just graduated from Clemson University and was grinding every day trying to generate new business ideas. In my office, I had access to a packaging prototyping machine - I was a packaging designer at a corrugated box plant - so I’d stay late every day, trying to generate new concepts and designs of random things that could be cut on that machine. A friend mentioned the idea of stencils to me, specifically stencils of Clemson’s logo, being that the school’s logo is so detailed that it’s virtually unable to be hand-drawn.

I assumed that a stencil of Clemson’s logo would be readily available online, but when I searched, there wasn’t anything that I could find online. I quickly set up a rough site with these stencils listed, and somehow on the very first night, someone purchased one of the stencils. This was all the validation I needed to know that people were looking for solutions to assist them with painting or drawing something they couldn’t otherwise.

At that time in my life, I was generating and testing business ideas at a rapid pace. I knew I didn’t want a career in the corporate world, so I was working hard on any and every idea that came to my mind. Amongst 5-10 other simultaneous ideas, Stencil Stop was one that just kept progressing and moving, although very slowly for the first few years.

i-started-an-online-stencil-shop-and-make-960k-year
The OG cardboard stencils from 2015, photographed on the floor of my apartment

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

My approach to designing and manufacturing the initial stencils wasn’t particularly scalable.

I took the logos I wanted to work with and converted them into vector files within Adobe Illustrator. Then, I sent them over to my prototyping machine and cut them out of cardboard. The machine used a blade to cut through the material, so I had to simplify the lines and curvature of the designs to prevent the blade from breaking.

I didn’t think at all about manufacturing processes or materials that I could use in the future. I just thought, “if I sell these, I can make them right here using this material.”

Keep learning and keep working. There are inevitably going to be moments where you feel like you’ll want to quit, or you’re not sure why you’re working on something. Push through.

Since the main idea during this time was collegiate logo stencils, I did something that, in hindsight, was a good approach to minimizing startup costs. I knew we needed to apply for licensing, but the cost to do this was upwards of $1,000 after fees and a bunch of other documents that required submission.

Instead of blindly applying for licensing approval, I created some prototypes of the products and scheduled a meeting with Clemson’s licensing coordinator. Then, I went around to shops in Clemson that I knew were likely to have demand for stencils. Sure enough, the shops said that if we went through with the licensing, they’d love to place orders.

When I went into the meeting with the licensing guy, I took note of the things he wanted to see regarding the product and our application to ensure we wouldn’t waste time and money getting rejected. We got approved on the first try, and those shops still place consistent orders with us today.

Describe the process of launching the business.

Stencil Stop grew exceptionally slowly for the first three years. We’re talking hundreds of dollars per month in revenue. There was no launch strategy, no moment of explosive growth, no precise execution of ideas. It was me, working a full-time job and coming home after work to figure out what new stencils to design and how we could sell more of them.

The business was funded purely through bootstrapping. Any money that was earned, we put it back into the business to earn a little bit more. I built up the brand on Shopify and Etsy. Custom stencils started to become the biggest part of our business. We invested in a laser cutter and put it in a 900 square foot airplane hangar that cost $100 a month in rent.

Etsy and Shopify worked a lot differently and required many different processes to satisfy customers. For reference, at this time, sales were about 60% through our website and 40% on Etsy.

On our website, in the early days, we handled custom orders through a “request a quote” submission form, which worked well enough. We could run ads, make changes to the page, and were free to form the pitch in the way that we knew would give the customer the most information.

Eventually, we created a full-fledged product page, complete with scalable pricing and volume discounts, which is the main way we take orders on our website today.

We grew increasingly disenchanted with Etsy over the years, and we stopped selling on there in early 2020. While I do believe launching on Etsy is the absolute best way to achieve initial sales and test initial assumptions, it didn’t feel like it was scaling up with us as we began to take more orders.

They would constantly make unilateral updates to both their back and front-ends, making it difficult for us to achieve consistency without frequently checking for changes.

For example, they’d roll out product page updates without informing sellers. This frustrated me because when you’re selling something online, it’s really important to understand how and where customers can see information - especially with a product like stencils, which can require lots of education before purchase.

They also rolled out a pared-down advertising platform, which changed the statistical reporting from showing Google’s actual costs and stats to only showing Etsy’s version of these stats - meaning, in my mind, that Etsy could start taking a piece of ad revenue as their own since they weren’t truly showing every cost associated with advertising.

Look, I get Etsy’s sales pitch - it’s eCommerce for people who don’t want to worry about all the technical stuff, concepts like CPC, and just want to spend time hand-making their products. However this made it hard for us to adjust, and as we learned more, it felt like they were oversimplifying their product for advanced users, and we couldn’t implement the things that we were learning.

Additionally, when you sell on Etsy, you’re competing with people who are willing to take way less money to create a custom product.

At the time, our $35 minimum price was $20 higher than anything else on the “custom stencils” search page. As of this writing, our custom products start at $66. So we’d constantly be battling with people trying to ask us to lower our prices, or who asked us to provide proofs before purchases were made. It just wasn’t worth it in the long run.

At first, it was a tough decision, but it helped us consolidate our customer service processes and fully control our products and brand.

Eventually, in March of 2018, I quit my job. At the time, the entire company’s revenue wasn’t even matching what I would make in a month at my real job. But I knew that I wanted to run my own business, and I had to make a move. If there was a real inflection point in the business, this was it. Within 4 months, revenue increased 5x.

I truly would love to write out a story about how when we launched the brand, the sales started rolling in and we hired all kinds of employees and couldn’t keep up with orders. You know, the classic things you hear about flourishing new companies. But it was an absolute grind of an experience. I had no idea how to do anything, so every decision was like solving a puzzle with infinite outcomes. The only thing I knew was how to work, so I kept working.

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

We’ve been able to attract and retain customers by being the best option for custom stencils on the internet. We decided early on to simplify the product as much as possible, so we don’t have any design fees and we’ll make a custom stencil out of any design, file, image, or URL a customer sends us.

We didn’t want a situation where the customers would be marginally up-charged with a bunch of different, seemingly random fees - they want to order stencils, then get their stencils.

In terms of advertising, what’s worked best for us over the years is Google Ads - both search and shopping - and Facebook / Instagram video ads, where we’ll take our social media posts and convert them into ads for the products. These have been the primary sales technique to grow the business.

Right now, we’re scaling up our SEO strategy, creating specific articles for stencil use cases and questions that will be both searchable and shareable, so our customer service reps can use them to assist customers at any point in the order process. But you’ll have to check in with me in about 6 months to see how that’s going.

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

During Q4, we’re taking a step back from our growth-focused goals to solidify internal processes, both on the order and fulfillment side of the business, as well as the marketing side. We’ll make a profit for the first time this year, and about 40% of our revenue comes from Amazon, while the other 60% is direct revenue through our website and business customers.

We’re planning on expanding our fulfillment capacity by 50% in the first quarter of next year and expanding into more materials to take our successful custom stencils template into other products and industries. We’re super excited about refreshing our marketing and branding, which will create a better foundation to scale to new levels over the next few years.

What platform/tools do you use for your business?

  • Shopify - Stencil Stop’s ecommerce platform
  • ShipStation - allows us to buy all our shipping labels in one place
  • Zapier - for connecting orders between different apps and platforms
  • Trello - for visually processing our orders through different approval and scheduling stages
  • ADP - for processing payroll
  • QuickBooks - accounting software
  • Adobe Creative Suite - for designing stencils, editing photos and videos

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

The book Four Hour Workweek by Tim Ferriss was super influential at the beginning for me because it allowed me to understand that a real business could be scaled using people you’ve never met on the internet. I also constantly get great insights from business podcasts Masters of Scale and How I Built This.

Masters of Scale gives hyper-specific strategies and examples of how founders and CEOs have massively scaled up their businesses, usually directly from the source. How I Built This is about the origin stories of businesses that did end up becoming successful and shows how all different kinds of people can find business success. They’re both motivating as hell for me.

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

My advice to people who want to get started: keep learning and keep working. There are inevitably going to be moments where you feel like you’ll want to quit, or you’re not sure why you’re working on something. Push through.

Are you looking to hire for certain positions right now?

We’re looking for an experienced marketer right now to assist us with scaling our marketing initiatives over the next few years. Feel free to reach out if you know anyone who might be interested!

Where can we go to learn more?

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

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Colin Mitchell, Founder of Stencil Stop
Pat Walls,  Founder of Starter Story
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