Everyone should make all their dreams come true one day. Our business partner WARAGOD challenges you to outdo yourself. A successful ecommerce project has risen from bazaar sales and a warehouse in the basement. Now it is operating in eight European markets. What is the story behind it?
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Former pastime alongside high school that turns into a business with a 4-million annual turnover? Where there is effort and determination, anything is possible with the right mindset: not giving up while building a project over many years with no certainty for a reward on the horizon.
What’s the story behind all the hard work?
Choice of the (Right) Segment
The segment in which you decide to do business is the key in many ways. Although the owner of WARAGOD started his business at the age of 17, he looked at the market at that time with a clear mind. It is important not to be blinded by misguided ideas.
Don’t be afraid of an unusual product
WARAGOD (formerly Armymarket) started out selling self-defence gear and outdoor accessories. These were products that had high margins at the time (2011-2012).
WARAGOD found its first customers although the target group was very specific.
Sell what you know the most about, what you enjoy and find fulfilling. In this case, it was army products.
When starting a business, many entrepreneurs look for the cheapest and most effective solutions. One of the most important entrepreneur qualities is resourcefulness.
Basements and bazaars
Building a business alone (or with one partner) without prior experience is challenging. WARAGOD started out selling goods on online bazaars. Initially, they had it stored at home in basements and garages.
However, being smart, reliable in delivering the goods and with good communication with customers, the business growth comes quickly.
New Challenges of the First Eshop
With the number of customers gradually increasing, the WARAGOD owners saw fit to build their first eshop.
After finishing high school, they created the eshop on their own and proceeded to expand their portfolio. Even with constant growth investment in new goods, there was no actual profit in the company.
When building an eshop, think about reliable storage space.
A marketing strategy is a must-have
To spread the brand to a wider range of people, WARAGOD decided to focus on digital marketing. The owners jointly set up Google Ads and Facebook campaigns.
Following this, they teamed up with the first marketing agencies.
When two become one
It’s natural for multiple people to start a business. Only a small percentage of new entrepreneurs venture into the risky business world alone.
But it’s even more natural if the partners’ opinions start to diverge as they grow. There is a reason for the saying: “In business, one is too few and two is too many.”
WARAGOD itself has also changed after 4 years. One of the two original owners remained, but suddenly the doors to new possibilities opened up.
Promises must be kept
With growth come new responsibilities. Promised delivery times need to be met, product returns need to be addressed, customer queries need to be answered and stock needs to be monitored regularly.
WARAGOD itself has overcome a similar challenge. Orders were piling up, customers were coming in and delivery times were getting longer. The brand also faced not always positive customer reviews.
Preparation for complex solutions
At this point, it was the turn to coordinate all processes and plan both the marketing strategy and logistics. WARAGOD aligned its processes and easily adapted to the new conditions.
As your eshop grows rapidly, think about promised delivery times and communication with customers.
Slovakia (the original country) has many “army enthusiasts” and therefore competitors are trying to meet their needs.
If a brand finds itself in a competitive battle, it has only a few options:
- Wage a price war
- Give customers added value that the competition does not offer
- Move the business into a new (non-saturated) market
International Ecommerce Expansion
After a while, the foreign ambitions of WARAGOD started to call out, so they looked around for new markets. The Czech Republic and Hungary seemed the logical step for expansion. So they secured translations of the eshop, hired a new person for Hungarian foreign support and launched the eshop abroad.
A successful ecommerce expansion strategy does not restrict abroad. As the eshops are growing, companies are becoming understaffed at the time, so an endless and lengthy merry-go-round begins.
For WARAGOD’s three employees, this meant lots of overtime and weekends at work planning for a new brick-and-mortar location.
Cooperation with Dexfinity
Later on, when WARAGOD hit a ceiling in its growth with the original marketing agencies, they decided to find a new solution: a true professional business partner. The best choice was Dexfinity.
Together we consolidated our position in the Hungarian and Czech digital market and gradually moved into six other European countries.
A spectacular rebranding
If any brand starts to expand its product range, moves abroad or needs to change its vision, one of the necessary steps is rebranding.
As your eshop grows rapidly, think about promised delivery times and communication with customers.
WARAGOD abandoned its original products and started to focus on an active lifestyle, outdoor hobby clothing or accessories and gear for a variety of non-traditional sports.
Coordinating the entire rebranding process in several countries at the same time requires careful preparation. However, through mutual communication, all activities were coordinated perfectly and the new brand was launched in a few hours.
Ecommerce Case Study: How Did the Cooperation Work
Planning was very important, which we managed to do flawlessly. We didn’t underestimate the analytics, campaigns or the reporting itself. We evaluated turnover, costs and efficiency using monthly projections.
During the collaboration, we used the Asana project management tool. It made our communication more efficient.
What are turnover projections?
Based on data from the current month (e.g. it is the 10th day of the month and based on the first 9 days), a linear model predicts what the total turnover, costs and ACoS will be for each country and channel.
This allows us to immediately see if we are meeting or deviating from the marketing strategy plan and, if necessary, identify which country and marketing channel are not meeting the plan, so we can take the necessary action.
The secret behind marketing doors
A strong success factor was a solid team of Project Managers, PPC specialists and others who got to know all the specifics of the project, including seasonality.
Even though they have been on the project for a long time, they still don’t slow down but look for new solutions to achieve even better results.
The sweet taste of results
By combining activities and following our international ecommerce expansion strategy, we achieved 38% year-on-year turnover growth (from 2020 to 2021).
We have increased campaign efficiency despite significant turnover growth and we have opened four new countries in the last one and a half years (Poland, Austria, Germany at the end of 2020 and Slovenia at the beginning of 2021).
The health of the company comes first. That’s why we maintain reasonable cost efficiency, therefore, high efficiency.
Trust is the basis for success
Another specificity for this project is that we include not only the cost of the credits and our administration in the cost and total ACoS, but also the cost to the client of having an in-house MKT and holding the agreed ACoS.
This is an indication that we treat each business individually. Every client has their uniquities and our attitude is to approach them as such.
The biggest ecommerce expansion challenges
The big challenge was the new countries that we launched at the end of 2020. Slovenia, as the smallest country among them, has run above our expectations and generates the highest turnover with the highest efficiency (within these four countries).
In the nest of competition
The next country we entered was Germany. This is a very challenging market because there is a lot of competition (1. Amazon, 2. eBay, 3. Kaufland), which significantly increases the CPC.
At the same time, it’s a big country, so either one has to invest a lot of money there (otherwise it’s just a drop in the ocean and the brand is unknown to potential customers), or be patient and expect a slow rollout.
However, there is a third option, which we have chosen.
A sophisticated solution
Based on last year’s data (revenue per session, conversion rates, CTR from Google Ads), we selected only a few regions in Germany that performed the best and decided to invest the vast majority of our resources there.
This way, we are more “in the eye” of this more prospective target and we can expect results (in the form of increased sales and efficiency) sooner.
We will gradually expand the number of regions. Given that the client (and of course Dexfinity) want to maintain a healthy business and prefer stability, we have evaluated this as the best strategy.
Every country is different
Another challenge we are currently addressing is the dynamic pricing strategy. Every market is different, has different solvencies and specificities. The Germans have no problem paying a premium if they have a relationship with the brand or know it is a product of high quality.
The Poles, on the other hand, simply do not have that creditworthiness. Everything is cheaper there and therefore, logically, we cannot sell at German prices. However, the strategy needs to be designed so that it works dynamically in all markets, across all categories, and so that we do not have to make big concessions in the ‘cheap markets’.
WARAGOD Stands for Strength of Mind
The WARAGOD brand challenges you to go beyond yourself and show your true strength. The story that is associated with it is also closely related to its history.
If you too feel that your brand needs a new twist and a stronger position on the market, tell us about it. Our ecommerce specialists will expose the weaknesses of your business, come up with solutions you didn’t know about before and you will overcome all limits.
Who knows, maybe in a year or two such a successful ecommerce case study article will be written about your business.
Thanks to the Dexfinity Editorial Staff for Creating This Article
Author: Veronika Svajčiaková
Editor: Martin Bartl
Translator: Mária Streďanská
Published by: Róbert Hošták
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