The Art of the Pivot

I am glad to see the back of 2023 and in general I look forward to the New Year anyway. I have read some excellent stories on this sub and thought I would share my own.

I did OK dropshipping on Wish years ago. Since then I started a few small businesses and generally kept busy bouncing around projects every few years.

In May 2022 I launched a business selling furniture here in the UK. I outsourced all manufacturing to a company a few hours away and I just took care of the website stuff. All items were made to order and priced competitively, however competition in this space is fairly low as barrier of entry is quite high. Most people buy the same crap from China, with long lead times etc.

On launch day I had a few k worth of sales attempted on the website but all fell through because the payment processor was blocking the transactions as it was a brand new account. Frustrating, but at this point at least I knew I had something.

I salvaged some of those sales and steadily grew the business taking it to approximately £70k pm turnover by November. This was done exclusively via Google Ads. I felt like a millionaire waiting for the check to clear.

This is where everything went wrong.

My manufacturing partner began trying to make more money out of me by increasing my prices and at the same time reducing the quality of the goods they made for me. Due to the nature of the products these changes were unseen as they were inside the product. They reduced the quality of certain materials used which would create lots of faulty products once they were used for a small period of time and result in large amounts of returns. I’m unsure of exactly they made these changes but it likely started in September or October when revenue started getting serious.

In December things took a turn for the worst. I began receiving a large number of complaints and replacement requests from angry customers all isolated from our busiest months. The faults were always the same. I broke a product down and clearly saw the differences from the approved prototype made and the agreed design.

Our upwards trajectory was severely hampered by this large number of returns, even more so as the delivery partner I was using at that time was quite expensive and I was subsiding free delivery of my products and also responsible for covering the return shipping and then the outbound shipping for the replacements. This turned a £900 sale of a faulty item into a £200+ loss per sale.

I had a lot of back and forth with the supplier who accepted some responsibility for these issues and made replacements but also claimed not to have the money to pay for the return shipping costs etc. However it then became clear they were just after a quick buck and even the replacements they were making were failing. I even had the ridiculous situation of them replacing products up to 3 times all with the same fault! Crazy stuff and I was at my wits end.

At this point I decided to start my own factory and produce my own products. This was part of the original plan but I wanted to do that after about 12-18 months of running the business but had to bring it forward, urgently. This was very stressful and I had to move quickly as I had orders to fulfil and replacements to make which I could in theory make faster than the old manufacture could.

I got a factory going and was lucky enough to be able to rely on a friend of mine, who is truly a hero to me. My friend has been there every step of the way and for someone like me who prefers to hide behind a computer screen, a man on the ground like him has been invaluable.

So come New Year last year and I had gotten my factory up and running by the end of January and we were pumping out products but I was in trouble. The returns were stacking up, sales slowed down, customers were leaving us negative reviews and it was just a feedback loop of 1 issue after another. I spent a bit of time feeling sorry for myself, woe is me type of stuff and wondering how I could be in this position through no fault of my own. In reality, that’s business and I could’ve done several things differently to prevent this from happening.

After a few months we were putting out the best version of my products that I have ever had made at better margins. Further to this I had made progress on my supply chain. I dramatically reduced the prices I was paying on materials and component parts to less than half and I found a much better delivery partner who delivered quicker and cheaper than the previous one. So although my business is looking like it’s going to fail, I was slowly building a much better knowledge base of how to create better products at a cheaper price with all the experience that comes with the problems we were having.

The whole of 2023 my business has been in limp mode and I have had some rough months, not taking a wage to make sure my staff are paid, managing low cash flow but a focus on completing all orders on time and resolving any issues early on and then focusing on trying to revive my brand. Unfortunately it never really got back on its feet despite doing over decent turnover overall in those 18 months.

So my back was against the wall, I have staff members to pay, a commercial lease and all the bills associated with that and a feeling that I am not growing or doing anything productive. Just ticking over waiting for the good times to return, which they weren’t going to. So I decided to pivot.

Whilst researching keywords to see what new products I could make I came across one that had pretty good velocity. This product was using 2 of the three main components I already use and was much easier to make and assemble. Plus I already had the workforce and space to make it happen.

I then did a bit of competitor analysis, commissioned some 3D renders and then knocked up a website pretty quickly. Sales were ok but they were all organic so I didn’t spend a penny on google ads. This really helped my back end of 2023 and helped me push forward the decision that I needed to shut down the previous website which has a poor reputation and start again. I resolved to start a new website replacing my old business with a better product offering and improved functionality. I’ve now finished this website and am so happy with it.

So here I am staring at 2024 about to launch my new website with a broader product range, improved and cheaper supply chain, a better approach to social media and an improved and informed plan as to how I am going to grow as I have all of the hard lessons I have learned through the past 18 months. All thanks to a quick pivot to a product that I was able to make quickly using my already existing supply chains.

I wish everyone the best of luck with their journeys through the new year.

TLDR; My business was failing, so I pivoted to making a niche product that helped me wrap that business up and start a new one.