Lights turn on opportunities
IN Business Daily’s ongoing series, we meet an entrepreneur who’s cottoned on to a Fairtrade winner.
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IT was while studying community and international development that Julie Dal Pra had her light-bulb moment.
The idea came to her to start a business that would not only earn her an income but help people in need.
“The role that business and trade could play in development work struck a chord with me,” she said.
“I had run my own business previously in the UK and I wanted to start a new business here that was ethical in its products and business decisions and made a difference to the lives of people.”
Ms Dal Pra said she saw Lummi & Co lights in Europe and investigated how she could sell them in Australia.
The lights are colourful cotton balls strung along lengths of cable, from 240cm-340cm.
They are powered by LED bulbs which mean the lamps are more economical.
“A trip through Europe with my partner turned into a research trip and by the time we returned, I knew where I wanted to take the brand and the business,” she said.
Ms Dal Pra discovered the light balls were made in Chiang Mai, Thailand, where unemployment is extremely high.
After initially employing locals to make the cotton balls she decided the logistics were too difficult and joined a Fairtrade co-operative in the area.
“Going the Fairtrade route for production was important to me, to know that the people making the products were treated and paid fairly for their work and people were put first before profit,” she said.
Once she had her production set up in 2015 she started doing markets in Melbourne to test the “create your own” lighting concept, get immediate customer feedback and work out her target demographic.
“I was pretty excited that my first sale was to Bec Douros from Channel Nine’s The Block and the sales kept coming. I took that as my tick of approval that I was onto something and with a deep breath ordered my first container load of stock,” she said.
Ms Douros, who appeared in the 2013 series of the renovation show, has gone on to pen a popular blog, Bec Marks the Spot.
Ms Dal Pra said there is still much to do but the product is ticking boxes. It is on trend, fun and has a wide application, from nurseries to events and living rooms.
“After such positive feedback and customers asking which shops they could buy the Lummi lights in, I started stocking independent retailers and we are now stocked in over 60 shops in Australia,” she said.
Like many start-ups, Ms Dal Pra said she had little cash to splash. “To keep start-up costs low, I developed the first website in Wordpress and the social media marketing saw orders come in from across Australia,” she said.
“Customer inquiries and website orders from New Zealand led to attending the NZ retail trade fair in 2016 and we now export to retailers across New Zealand.”
She said partnering with potential inbound competition via the Chiang Mai co-op proved a wise move.
“We have agreed territories for distribution from our Fairtrade organisation, they set the pricing that provides a fair wage to all the homeworkers and no-one can undercut or sell into another partner’s territory.”
“There are now 80 workers in the Fairtrade organisation producing 4.5 million light balls a year for this collective group. As partners we can tap into each other’s expertise, conduct joint photo shoots and product development and offer moral support at other times.”
She said the model operates with workers mostly home- based in rural villages. They collect their supplies every couple of weeks, make the products at home and return with their work and receive payment.
JOHN DOWNES - MENTOR, MEDIUM-SIZED BUSINESS, ACORRO GROUP
WELL done, Julie. You’ve established a business supporting workers in home-based Thai rural villages to produce such a lovely niche product via the social ethos of the Fairtrade organisation.
I see two issues. Firstly, the balls are a niche decoration product that is on trend now, but could easily date. This provides the opportunity and the urgency to expand your range either in size, style, application, format, demographic or segment.
The lampshades look like a natural complementary product which could be used to expand into the rest of the home/office. And your website needs to celebrate these applications more.
The second is cashflow to finance your inventory.
Buying by the container from offshore must be very hard on cash while still recovering the investment from the previous container from distributors and direct customers over the web.
It is also very difficult to pick the stock combinations to carry, six months in advance of receiving them.
Cashflow forecasting for the year ahead is vital to see where the revenue and expenditure bumps are in your year. It also helps you look for opportunities to smooth out these bumps well in advance.
Seeing over the horizon is the key to sleeping at night.
I wish you pleasure, fulfilment and to earn a just financial reward from your passion.
VIVIAN VO — MELBOURNE INNOVATION CENTRE
LUMMI and Co is a colourfully creative idea, incorporating the popularity of DIY, while lighting up a powerful and genuine story.
It is wonderful to hear the support you have received, as it really does make a difference. The start-up community in Melbourne is definitely one based on support and knowledge sharing.
Great work on Lummi and Co’s prominent and active online presence. The website has good quality visuals, is functional and user-friendly.
Consider adding more widely used keywords on product pages to increase acquisition and rate of conversion.
Researching and publishing trending topics as blog posts will also assist.
There’s fantastic engagement from fans on social media. The visuals are fun, creative, and consistent with the brand’s image.
Consider collaborating with industry influencers on Instagram to help reach niche markets. Influencer marketing will also build brand awareness.
Growth costs money, and at some point, start-ups will run into the problem of cashflow management.
Ensure you have proper systems in place to track inventory and manage cash activity.
Monitoring costs (fixed and variable) against sales volume is tricky. Seek expert advice and guidance to determine whether you are operating viably.
BRUCE HALL — MENTOR, SMALL BUSINESS MENTORING SERVICE
JULIE has tapped into something here! These products scream creativity, fun, elegance and taste.
They are visually strong and come with a great backstory — all the ingredients needed for success in the marketing space.
Although well suited to children, her target audience could be expanded to include interior designers, event managers, wedding planners, architects and retailers looking to improve their visual merchandising.
Sometimes the answer is not so much looking to expand a product range, but rather targeting different or new niches.
To connect with her audience, it will be important when the new website is launched to ensure pages are optimised to target search terms with reasonable search volumes.
The Google AdWords Keyword Tool indicates a good range of search terms beyond “cotton ball lights” are available.
On the social media front, adding the recently introduced “Shop Section” to her Facebook page could be a way of converting some of those who like what they find, into paying customers.
While this is in its infancy, most social media platforms are now looking for ways to lock users into their platform. “In App” purchasing will become increasingly important.
In addition to Facebook, I also suggest establishing a presence on Pinterest.
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