How Luxyhair.com Built a Seven-Figure Ecommerce Business With YouTube Marketing
by Mark Macdonald Case Studies Dec 16, 2013 6 minute read Leave a comment Email Pinterest Facebook Twitter LinkedIn
When Alex Ikonn and his wife Mimi realized how hard it was to find good hair extensions, they knew they had stumbled on a business opportunity.
They took their problem and solved it by creating Luxy Hair – an extremely successful online store selling hair extensions for women.
And the coolest part? Their business is powered almost exclusively by tutorial-style YouTube videos.
Their YouTube channel was created in 2010 and since then has amassed 1,474,246 subscribers and 173,657,125 total video views.
In other words, Luxy Hair is the perfect example of an audience enabled business that relies on a loyal community of fans instead of other channels like SEO and paid advertising.
I caught up with Alex to find out how they took their site from idea to million dollar business.
Describe your business and product(s) in 1-3 sentences.
Luxy Hair is a customer-centric hair extensions ecommerce retailer.
How much revenue are you currently generating per month?
I believe a more important measure for businesses is profitability and I can confidently say we are profitable in the seven-figures (annually).
How did you come up with the idea for your business/product(s)? What kind of market research did you undertake?
My wife Mimi and I were getting married and she was looking for hair extensions for the wedding. She wasn’t able to find what she was looking for and I was lucky enough to be in the room when she was talking to her sister Leyla about her predicament. At the time, I didn’t even know what hair extensions were.
And this was all of the market research we needed, as I knew if she wasn’t able to find a solution for her dilemma, we were going to try to solve it!
How did you create, manufacture or source your product? What were some key lessons you learned during this process?
I started sourcing the same night. I went on Alibaba and probably contacted every hair extension supplier that was there and just started asking questions about how to make it happen. I asked many stupid questions, however, that made me learn more about the product and how to actually make the idea a reality.
In choosing our supplier, ultimately it came down to the quality of product. From my initial list, I narrowed down to about 10 that I had pretty good communication with and then started ordering samples. The supplier with the best quality product and communication won our business.
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To our surprise, there was no minimum order with our supplier, however, we still had to place a pretty big order as the product itself is very expensive. Our initial order was $20,000.
A key lesson I’ve learned is the communication you have with your supplier is really important. As weird as it sounds, you have to feel a connection and trust your intuition. It’s fluffy but it worked for us and we still work with the same supplier.
How did you promote your business initially and where did your first sales come from? Any major media mentions or PR wins since then?
Our business was entirely grown through our YouTube channel, the YouTube community and word-of-mouth. We only recently started experimenting with paid marketing – up until then it was all organic.
And our initial biggest win was a YouTuber with about 15,000 subscribers reviewing our product. This did way more for us than any magazines mention can do as we’ve been featured and it’s nothing compared real people on YouTube.
Your YouTube channel has over 173M views. Why is video working so well for you and what advice do you have for other businesses looking to leverage it?
YouTube works well for us because of the way we approach the YouTube community. Our approach is to try our best to give people value and a personal connection when we create our videos. We honestly don’t focus on selling and instead focus on these two factors. The sales and word-of-mouth come as people can feel we genuinely want to help people. We don’t even use our product in most of our videos.
Learn More: Find out how to make money on YouTube.
I can also tell you that YouTube is not for every business. It works so well for us as you can see how the product looks and how it can transform your hair to help you create different hairstyles and look great! It’s a visual product.
How do you handle shipping and fulfilment and organize the back-end of your business? Key lessons/tips for doing this successfully?
The most important thing I would recommend to anyone is to work with a third-party fulfillment warehouse from day one. It will save you a lot of headache. We used Shipwire when we had a crazy idea and no sales to growing to be one of their biggest customers.
The key lesson is shipping takes a lot of time and you want to use a service that will enable you to scale quickly and not interrupt your growth.
What software, tools and resources are crucial to your business?
Definitely, Shopify and Shipwire! These are my secret weapons and they integrate so seamlessly together.
The Shopify blog is my go to ecommerce learning resource. Sometimes, too much content that I can’t even absorb it all.
Sounds like a pitch for Shopify but I honestly love the service.
What were your biggest mistakes or wastes of time and money (if any)?
Our biggest mistake was not giving into crazy customers and my lesson was that it’s better to lose a little money than to be right.
For example, we’ve had instances when the customer didn’t follow a certain refund policy and still wanted a refund. Sometimes it’s better to play nice and not follow your refund policy as angry crazy customers can make you lose a lot more money. With social media at everyone’s disposal you have to be very careful.
What other key advice can you offer to entrepreneurs looking to start a successful ecommerce businesses?
Stop thinking about yourself and your success. No one cares.
Start thinking about others and how you can bring value into their lives and help them solve their problems.
When looking for product ideas, examine your own everyday life and look for pain points that you can solve. Chances are, if it’s a product or service that you need, others will need it as well.Don’t be afraid to learn from suppliers and ask lots of questions – even if you know nothing about a product or industry. When it comes to video and content marketing, focus on creating content that has independent value and lacks a direct sales pitch. This will help you build an audience, position you as an authority and ultimately sell your products in an under-the-radar way.Keeping customers happy is important and sometimes making small customers service concessions can save you time and money down the road.Provide as much value as possible through your content, products and services and you’ll be much more likely to find success.