Success: It’s in the Bag
March 18, 2010 by Erin Casey
Sarah Davis built a multimillion-dollar business, one step at a time.
It’s difficult to find a woman who doesn’t love a great purse. From palm-sized to super-sized, exquisitely beaded, lusciously smooth leather or sassy quilted canvas, the perfect bag is like the siren’s call… all but impossible to ignore. That truth, and a desire to pay down college loan debt, led Sarah Davis to create a multimillion-dollar business selling pre-owned designer handbags.
Davis began selling purses one at a time on eBay in 1999. At the time, she was in law school, her husband was in medical school, and they were new parents with a 4-month-old baby girl. Money was going out faster than it was coming in, and she wasn’t sure how long it would be before she could start working full time. That’s when, during the course of looking for ways to earn extra cash, she discovered that people were buying items on clearance and selling them on eBay for a profit.
“I started very small, piece by piece,” Davis says. “That’s why the Internet is so great. It used to be that there were massive costs to starting a business.” But by purchasing items at a deep discount, selling for a profit and then reinvesting her profits in inventory, Davis learned she could start a business with very little money. Today, Davis is the mother of four children and the owner Fashionphile, a Beverly Hills-based boutique specializing in pre-owned, high-end purses and trunks. Here she shares tips for building a strong and profitable business, with minimal financial investment.
Tap into Existing Markets
Davis notes the options for online auctions have expanded significantly since her business’s early days. “There are all sorts of venues today—eBay, Etsy, even Craigslist.” She recommends using those sites to drive traffic to your site. “Put up your own website, but get on other platforms and let them drive people to your site… millions of people go to those sites every day.”
Davis’s accountant was the one who turned her on to the idea of building something larger than what she could operate from her home. “He asked me, ‘Where do you see yourself in five years?’ and handed me the book The E-Myth.” That book opened her mind to the possibility of growing a much bigger and more profitable business. “By the time I went back to talk to my accountant again, I had rented an office, hired some college girls and was making it a real business,” she says. “I realized that the more people I hired, the more time I had to develop my business and build my brand.”
Take the Next Step—but Pace Yourself
Even as her business grew, Davis paced herself. The couple had paid off their school loans and she was reluctant to take on significant business debt. But when the timing felt right, Davis partnered with her brother-in-law, who was in the business school at the University of Southern California. They found a storefront location in Beverly Hills and began to see exponential growth.
“We didn’t do it overnight,” Davis says. “Fashionphile grew year by year, and every year I reinvested in my business. You can really build your business up to an amazing level by starting small and building slowly.” Every choice, from expanding inventory to finding the perfect location on Rodeo Drive, was well-researched and planned out.
Pay Attention and Be Responsive
The details matter to customers. Packaging and labeling, creating a unique and memorable brand and making sure customers enjoy a positive shopping experience are all key elements of success.
Davis uses search.twitter.com to find out what people are saying about her business and their customer experience, and to stay in tune with their needs. Her advice: If you discover a negative customer experience, reach out to that person immediately. “Before people say anything to you, they’ll blog about it and tell their friends,” Davis says. “Actively pursue what’s going on in your space; let people see that you’re responsive to their needs.”
With careful attention to detail and an eye for opportunity, it’s possible to build your ideal business—one step at a time.