Online niche product businesses buck trend of big business failure

AUSTRALIA'S craftiest small business owners are bucking the trend of high business failure rates by starting online with a niche product.

AUSTRALIA'S craftiest small business owners are bucking the trend of high business failure rates.

Mum and Dad business owners are taking the less risky business road to success by starting small with their handcrafted goods ranging from greeting cards to furniture.

Online retailing allows businesses to have a huge potential customer base, according to Jason Chuck from Etsy Australia who supports businesses in selling their handmade goods.

"These businesses create niche products that may only tailor to the one per cent," he said. "But when you look at the world as your customer base, that one per cent is big business."

Some of these small businesses are also finding a niche on the market circuit.

"It's small business providing a new twist on retail," said Rachael Zelensky, Managing Director of Boutique Markets who operates quarterly markets selling hand made goods around Australia.

"Customers want to get away from the normal retail format and are looking for something personal and unique."

Small business statistics from the Department of Industry reveal 40.3 per cent that began in 2007 did not survive until 2011, higher than the failure rate of 24.2 per cent for medium businesses and 25.7 per cent for large businesses.

But markets and online stores are allowing artistic Australians to start small and find their niche customer base before expanding.

"There is too much at stake in owning a store" ... Kirsten Devitt from Each to Own

"Once you're online, you can build your confidence slowly," said Kirsten Devitt from Brisbane, who sells handmade jewellery from her store Each To Own

Almost two years old, Ms Devitt's online business allows her to earn a decent income while caring for her young son. But she would never have considered becoming a business owner if she had to start with a store, staff and a business loan.

"There is too much at stake in owning a store," she said. "I couldn't afford to outlay a crazy amount of money for something that might fail."

Online success has led to talks of expansion ... Anna Blandford and Gareth Meney of Able and Game. Picture: Chris Groenhout

Anna Blandford, from Melbourne, has been selling cards and stationary from her store Able and Game for four years and proudly names Nepal as a country she sells to. And her online success has led to talk of expansion.

"We now wholesale to the UK, US and New Zealand," she said. "We are always looking at expansion and have recently attended trade shows in the UK."

Fending off stockists who want her products in their stores ... Kylie Jackson from Wallfry.

Kylie Jackson, also from Melbourne, was coerced by friends into establishing Wallfry three years ago to sell her artwork for kids rooms. Now she is fending off stockists who want her products in their stores.

"The key for my product is being able to personalise the colours," she said. "It's a unique service I offer that I don't want to lose."

The demand on these businesses mean some have to open physical stores.

"We had so many people wanting to view the products," said Krystal Ruchs. "This was the next logical step."

Selling items produced from recycled wine barrels ... Peter and Krystal Ruchs of Winestains Barossa.

Krystal and Peter Ruchs, are a father and daughter team from Barossa in South Australia selling items produced from recycled wine barrels.

"We didn't think there would be such demand. And we only sell within Australia," Ms Ruchs said.

Producing handmade soaps to customers worldwide ... Amy Ta of Seventh Tree Soaps.

Amy Ta from Sydney will soon be marking her one year anniversary as a business owner.

"I really wanted this year to be different," she said. "I wanted to do something that I loved."

A fan of buying and selling online, Ms Ta's New Year's resolution for 2013 was to create her online store, Seventh Tree Soaps. She now produces handmade soaps to customers worldwide.

"One third of my business is in the United Arab Emirates," Ms Ta said.

Stockists are also flocking to get a piece of the quality products she produces.

"People want products that are unique and well crafted," she said.

Now her full-time job, Ms Ta's online store has performed so well she is considering expansion.

"I am already thinking of putting on staff to help," she said. "It's amazing. For now I have unofficial help from my husband."

Figures from Etsy Australia show that 90 per cent of sellers are women.

The online marketplace launched in Australia in 2005 and now has tens of thousands of sellers, with 60 per cent of orders going to international buyers.

Ms Zelensky said market stores were also incredibly popular with women - with mother's making up 75 per cent of owners.

"The markets are a platform for interaction," said Ms Zelensky. "They start as small businesses but get bigger."

ocally, the demand for something special that is not mass produced is also huge.

"We recently had our Melbourne Christmas market at the Caulfield racecourse," said Ms Zelensky. "Three ATMs were on site and two were cleared of cash."