Steve Traurig, Co-Founder, Director, CCO, Booktopia
Steve was a guest of StartCon, Australia’s largest startup and growth conference. It was held over two days at Randwick Racecourse in Sydney on Nov. 30 and Dec. 1.
One For The Books
The story of Booktopia, ‘Australia’s favorite bookstore,’ and how they’re conquering the competition—even Amazon.
Once upon a time, a programmer who got his start with IBM was given an enchanted opportunity to create a magical bookstore that would one day battle powerful giants. The magical power? With just a click of a button, Australians could have brand new books delivered within days to their doorsteps.
And just like in most fairy tales, our hero and his friends stumbled upon the opportunity entirely by accident. “We literally fell into it,” says Steve Traurig.
Traurig and his two brothers-in-law, Tony and Simon Nash, were running an online marketing consulting business when Angus & Robertson, the 130-year-old Australian bookseller, approached them and asked if they would be interested in getting into the book business. The pitch was a white label book retail website, meaning that everything from the website creation to the distribution would be handled by Angus & Robertson. All Traurig and company had to do was add their personal flair.
But Booktopia, the company that arose from that project, would end up becoming something much bigger. Nearly 15 years after Traurig’s brother-in-law said he “wouldn’t mind giving that book thing a bit of a go,” Booktopia has served over 4.2 million Australians and is on track to bring in $115 million this year, making it the market leader in online book sales. Oh, and they now own Angus & Robertson.
The journey from their very first book sale to squaring off against Amazon for online book supremacy in Australia was a chess game of strategic move after strategic move. Thanks to some shrewd decisions, including focusing on customer interaction and building their own ecommerce and fulfillment systems, Booktopia’s well on its way to happily ever after.
A White Label Bookshop, Transformed
In 2004, with only $10 a day to put toward advertising their new business, Traurig and the Nash brothers dove headfirst into the book world.
“When we first started, we owned nothing,” Traurig says.
When Booktopia first launched, Angus & Robertson created their website, managed their distribution and owned the brand. Traurig and his brothers-in-law were responsible only for marketing, so they created a few Google AdWords campaigns (one of which is still running today) and waited for their first books to sell. By the end of the first year, they were doing $100,000 in business a month.
This worked beautifully for the trio and for Booktopia for three years, but in 2007, they had to confront the reality that what they were building, with revenue ever increasing, could all go away in an instant. They also realized that the fulfillment company was neither able to keep up with the growth they were experiencing, nor were they able to meet the expectations Traurig held.
“We decided we had to go out on our own, because we were actually building a company of value,” he says, “and we realized that if you want to have something of value, you have to do it yourself.”
Things were going well, and they realized that in the current setup, they didn’t really own anything of substance, should they ever want to sell.
So they broke away from the fulfillment company and set out to turn Booktopia into something of their own. They set up their first warehouse, hired a warehouse manager, bought some shelves off eBay, and got to work building their own core systems.
“Dealing with those sorts of numbers in databases, in the website, in the front end, in the backend, etc., the scale is beyond almost any other retail environment, and we had to make it all work,” he says. “We built the systems ourselves and that takes particular commitment and skill.”
With all of the changes taking place, it would have been reasonable to see a marked customer drop off. Before the transfer, they did about 130 orders a day, but that number only dropped to about 110 a day, even after everything from their systems to their website changed.
Through it all, the Booktopia customers remained loyal. In fact, the focus Booktopia places on the customer experience would come to define their brand.
“It’s about the customer obsession,” Traurig says. “About putting yourself in the place of the customer.”
When Traurig and his brothers took on the fulfillment side of the business, they began with only a single book on their physical shelves, but knew that building up their stock was the only way to give their customers the best experience.
Instead of the long wait from the moment an order was placed until a supplier could deliver the order and then ship it off, all they had to do once they built up stock was grab an item from the shelf the moment the order came in and send it along.
“That was essentially a business-changing experience, because the feedback we got from the customer was instantaneous,” he says.
Customers responded with glee that their books arrived so quickly, inspiring them to remain loyal and recommend the bookseller to friends. Because of this organic growth, Booktopia has never needed to take on investors.
Even without investors, they have consistently outmatched the competition and met their sales goals. In fact, they made the BRW Fast 100, Financial Review’s list of the fastest growing Australian brands, seven times between 2009 and 2016, the only company to do so.
Traurig says that they have also built strong relationships with their banks, something he describes as a critical part of doing business. This gives them additional wiggle room if necessary, staving off a need for traditional investors.
“A lot of startups, a lot of founders, think they immediately need to go out and grab someone else’s money and give away bits of the company,” he says. “There’s definitely merit in doing that for certain types of models. We chose to actually build a solid business organically and build it off the back of our customers and customer service.”
And this approach has carried them through what could have been a business-ending battle.
Squaring Off Against a Giant
When Amazon announced that it would be launching in full in Australia at the end of 2017, Traurig wasn’t nervous. The institutions they worked with, however, had concerns.
The gargantuan online retailer had generated $136 billion in revenue the year before, with all signs pointing to continued growth. So how was “Australia’s local bookstore” going to keep up?
Well, according to Traurig, they had been keeping an eye on the behemoth from the very beginning and hadn’t let its success deter them.
“From our point of view, when we started Booktopia, Amazon was shipping $100 million worth of books into Australia already, and we didn’t worry about that,” he says. “We were fearless.”
They focused instead on their own business, and the most important asset: the customers.
Due to its global nature and size, Amazon has an impersonal quality to it that Traurig says Booktopia always vowed to counter. For example, Booktopia’s website has the office’s physical address, email, and phone number on every single page, not only allowing but encouraging customers to reach out and share praise, complaints, and questions instantaneously. They wanted to be accessible and feel like a part of the community.
To keep up with the emails and phone calls, they quickly hired their first customer service staff, a cheerful individual who still answers the questions of Booktopia customers today.
Traurig says they take customer feedback extremely seriously and use it to inform their continued development. With a 20-person development team on the case, he says that Booktopia is always in pursuit of the best possible user experience, a quest that can only be completed through regular, honest feedback.
Traurig says that this approach to customer service has been the key to keeping up with the competition.
“All throughout our history, Amazon has been this massive company…but we were just focused on getting product to our customers.”
And if winning 2016’s National Book Retailer of the Year and 2017’s National Bookstore of the Year at the Australian Book Industry Awards is any indication, Booktopia’s approach is working.
The Next Page
Today, Booktopia has over 6 million products available on their website with over 150,000 of those titles in stock in a 140,000 square-foot distribution center. They also acquired Angus & Robertson, along with its online store Bookworld, in 2015.
“It’s a 130-year-old company that had a very, very good chance of disappearing completely,” Traurig says. “So for us, it was also an honor.” The company currently runs as its own business unit with independent marketing, branding and customer base.
The founders also have high hopes for the company’s automated systems and distribution center. To demonstrate their capabilities, Booktopia acquired an online camera and optics company. In doing so, Traurig and his partners are hoping to show that their systems can handle more than a single type of product.
So what’s next for Australia’s favorite bookstore?
Although they ventured down the path of going public in 2016, they pulled the IPO just before launch, choosing to remain a private company. With Amazon looming, and after watching several other online companies attempt to go public and fail spectacularly, they decided to keep things as they were.
While Traurig has a “never say never” mindset toward another try at going public, there are no plans to move in that direction for now.
“Our customers have been our investors,” Traurig says. “What we’ve always chosen to do is delight the customer.”
And in true fairytale fashion, delight them they will.
Steve Traurig’s Tips on Building a Sellable Company
While founders are still scaling the challenging mountains that come with launching a business, it might seem silly to think 500 steps ahead to the day they will be shaking hands on the sale of the company. But Steve Traurig believes building a company that will someday attract a buyer starts on day one, so he offered three tips to creating a company that will sell.
- Make Sure Your Bookkeeping is Impeccable
“One of the things we’ve always done is make sure that our financials, our financial reporting and our accounting are top notch,” he says. As you might expect, well-kept books have always been a priority at Booktopia. From the very beginning, they sought financial advice when necessary and kept all of their books in perfect order. And because neither he nor his other co-founders had strength in bookkeeping, they always made it a number one priority to hire someone skilled.
“It may just all look like a whole bunch of receipts and a pain the neck…but aim to set up solid financial management right at the beginning.”
- Create as Many Original Things as You Can
In the beginning, Booktopia was a white label website, but when it started to flourish, Traurig and his partners realized they needed to make some changes. “If we wanted to sell it,” he says, “we had nothing to sell,” Traurig says. So they decided to build all of their own core systems to create something that would be attractive to eventual buyers. Traurig encourages founders to use as many original systems as possible and innovate wherever feasible. In doing so, the value of the company you may someday look to sell increases significantly.
- Demonstrate What You’ve Built
Now that you’ve created something original, it’s time to show what it can do! Perfect its intended capabilities and then push its limits. This is what Traurig says they are currently doing at Booktopia with their distribution systems. Because they created the automation used in the center, they decided to demonstrate to potential buyers that it could handle more than one product at a time, leading them to purchase a camera company. The only thing better than an innovative creation is one that can be used in more than one way. Traurig says that demonstrating this is a great way to build a sellable company.
- How this self-professed tech guy “fell into” starting an online bookstore that rivals Amazon
- How Booktopia has remained fully self-funded for 15 years
- Why they pulled an IPO just before it went live
- How he felt about Amazon coming to Australia
- For bootstrapped businesses, how to know when it’s time to build your own internal tools and handle shipping and fulfillment yourself
- The reasons behind the acquisitions Booktopia has made, particularly Angus & Robertson
- How Booktopia approaches Conversion Rate Optimization (CRO)
Full Transcript of Podcast with Steve Traurig
Nathan: The first question I ask is, everyone that comes on is, how did you get your job?
Steve: That’s a great question. So I’ve been in business with my two brother-in-laws for 20 years this year, and we’ve gone through a couple of different companies. And at the time that we founded Booktopia we were actually running a net marketing consultancy. So I’m a tech guy, I asked the universe, the day I started my career at IBM as a programmer, and then moving into systems engineering and marketing. So I’ve always been a tech back end, as well as sales architect and whatnot.
So we were running an online marketing consultancy, helping small businesses do business, E-commerce sell stuff online, and we fell into an opportunity to actually do some search engin optimization for Anderson Robertson. And this was back in, before Christmas 2003. And we literally fell into it. We weren’t looking to start a business like Booktopia, it looked like an opportunity in the way that there was a system that was an online bookstore, that we could use and put our brand on, and someone else would do all the fulfilment.
And my brother-in-law, Tony, who’s CEO said, “I wouldn’t mind giving that book thing a bit of a go.” And my other brother-in-law, Simon, who’s looking after our founding said, “Well you can start something but it’s gonna be outside of ours, and your budgets gonna be 10 dollars a day in terms of marketing spend.” So we said, “Okay, lets do it.” So I got some branding together on this White Label Website, and we built Google AdWords, and on the day we sold our first order, the rest is kind of history.
So from that 10 dollars, fast forward 14 and a half years, we’re now looking on track to turn over about 115 million this year. So how did I get the job, I basically, we fell into it. And as founders, we literally bootstrapped up from this first 10 dollars.
Nathan: Yeah, wow. And are you guys still bootstrapped? Or have you raised any capital? Taken any investment?
Steve: So we’ve raised no capital and taken no investment up to this date, we’re fully self funded.
Nathan: And why is that? Why did you make that decision?
Steve: Because we could. So what we’ve always done is essentially, our customers have been our investors. So we haven’t need to, in terms of achieving our goals, we haven’t needed to take external investment, give away a piece of the company. What we’ve always chosen to do is delight the customer. So what we’ve done is we’ve invested in all the things that we need in order to succeed. So we’ve built our own systems, our own front end, our own backend, we’ve invested nine million dollars in our distribution capability, our distribution centre, in our staff, and we haven’t needed external investment to grow the double digit growth year on year that we have.
Nathan: Yeah, wow. And that’s quite interesting because a lot of these tech companies, as I’m sure you’re aware, it’s kind of assumed that if you want to grow you need to raise capital to fuel growth. I’d love to hear your thoughts on that.
Steve: Exactly, and that’s why I think our store is so interesting to the founder and to start com, and to the market in general, because we haven’t done that. Now, with that said, I mean late 2016 we started going down the path of an IPO because we felt that would, again be the best thing for our customers, in order to gain liquidity, and our customers love us. And for them to have a piece of this as well, and that would raise capital, and we pulled that IPO just before it was actually gonna go live. And that was for a few reasons, not the least being that the institutions and fund managers were very nervous about Amazon. Who had not yet set up their first warehouse here in Australia. But there was certainly too much nerve in the market there, it’s one of the reasons.
There were also a few .com IPO’s that didn’t go well in the previous 12 to 18 months before that. There were spectacular crashes actually. So the whole thing didn’t quite line up. So we pulled that, but from them on we just decided, “Well we can put enough of our own people doing what we’re doing, and we are achieving all our goals, revenue, and profitability, and customer satisfaction.” So you’re absolutely right, a lot of startups, a lot of founders, think they immediately need to go out and grab someone else’s money, and give away bits of their company. And there is definitely merit in doing that for jobs, and types of models. We chose to actually build a solid business organically, and build it off the back of our customers and customer service.
Nathan: Yeah, I see. And do you think you guys will revisit that IPO in the near future?
Steve: You never know what will happen. We don’t want to attempt it too soon, it’s very, very expensive and very, very time consuming. I’ll never say no to anything, but at this stage it’s not really on our cards. Yeah. We’ve got great support from our banks for example as well. So we’re able to call the bank and there’s fantastic support with ours, so when we need things like overdrafts, and equipment lease arrangements, they’ve always been there for us. And that’s a really important part of doing business from our point of view.
In our business, we’re very protective if you like, of our shareholding. So again, it’s past a different business model to what might be expected, but we’ve always just set out to grow a solid online business, essentially a real business but in the online paradigm, if you understand what I mean. So we’re not in an industry where we’re streaming music, or selling prescriptions of some sort, or something like that, or trying to build value through labels. What were doing is VR retailers, we’re selling real product to real customers. We have over six million products available for sale on our website, and that’s choosing from about 13 million available titles at any point in time. And we’re serviced, we’ve sold to over 4.2 million Australians over our history.
So even just looking at it from a technology point of view, and this is where I’ll talk about the investments that we have to make, dealing with those sorts of numbers in data bases, in the website, in the front end, in the backend, etcetera, the scale is beyond almost any other online retail environment. And we’ve had to make it all work, as I’ve said, we built the system ourselves. And that particular commitment focus, and skill, we’ve just had a fantastic team that helped us do all that.
Nathan: Yeah. So one thing I’m curious around is you mentioned that you guys, one of the reasons that you pulled away from the IPO was because Amazon was coming to Australia. And you guys are the tier one brand in Australia, you guys are the number one market leader in Australia, selling books. Like I’m just curious when you have a big behemoth competitor, how do you guys feel about that? How, I’m just curious as a founder, ’cause that can be quite intimidating.
Steve: Yeah, absolutely. And we get that asked all the time. And the thing about Amazon, they weren’t actually physically in Australia yet. So there was a lot of fear, uncertainty, and doubt around that. And it wasn’t our fear, wasn’t our uncertainty or doubt, it was that of the institutions, and the companies that we were meeting. So from our point of view, when we started Booktopia Amazon was shipping 100 million dollars worth of books into Australia already, and we didn’t worry about that, we were fearless. So to us it was about hooking into what the customers need. That’s why when we sold that first book after three days, and then by the end of the first year we were selling 100 thousand dollars, we weren’t thinking about Amazon. We were literally just focusing on what was happening with our customers and our business.
And what we found as we went along was that customers wanted some pretty simple things. They wanted to be able to communicate with you, so from day one we actually put our address, our street address of our office, we put our phone number, we put our email address on every page of the website. That was crazy thinking in those days. Who does that? Certainly not Amazon or anybody else. We wanted customers to actually contact us. So very quickly we actually hired our first customer service person who’s actually still with us today, to take phone calls and manage emails. And that’s been really key.
So all throughout our history, Amazon has been this massive company, obviously as they are in many, many markets. But we’re just focused on getting product to our customers. So just on that, in 2004 when we started Booktopia, I mentioned another company was doing all the fulfilment for us, and we were just doing the marketing and collecting commission. So we built it, and built it, and built it, and in 2007 we decided we had to go out on our own ’cause we were actually building a company of value, and we realised that if you wanna have something of value then you have to do it yourself.
Steve Traurig: So in 2007 we actually took our first warehouse, which was in Artarmon, near Sydney. With only about 450 square metres. Hired a warehouse manager, bought some shelves off Ebay, literally flying by the seat of our pants. I mean we were, we were office guys, we didn’t know anything about the distribution. We hired a warehouse manager who did and we built, that’s when we built our own systems. And when we flicked over to our new website, we were doing about 130 orders a day at that stage, and we dropped to only about 110 orders, even though we changed platforms, changed websites, but the customers stayed with us. And interestingly enough, some of those Google campaigns that we started on that first day, are still running now.
Nathan: Wow. That’s interesting.
Steve: Mm-hmm (affirmative). So we then very quickly grew out of that, because when we moved into our first warehouse, we came upon the realisation that in order to give our customers the best experience, we have to have stock. And we started off with one book, and the process, instead of waiting for a supplier to deliver us the book, and then for us to receive it in and then get it out to the customer, the difference was that we could just go to a shelf, pick that book, get it out to the customer. And that was essentially a business changing experience because the feedback we got form the customer was instantaneous. “Wow, you got it out so quick. Fantastic.”
Nathan: Mm-hmm (affirmative). Speed.
Steve: We were looking up the QA, and so we delivered them perfect product, well as perfect as we could, and that’s the manager that we still held all the way through our growth till today, where now we’ve got 13 thousand square metres distribution centre, with investments of over five million dollars in automation and process. We’ve got over 150 thousand titles in stock. And staff of, I think right now it’s probably just tipped over 200 because we’re ramping up for Christmas.
Nathan: Yeah, wow. This is really, really interesting Steve. So, one thing there is, you mentioned around, you said something that I found was interesting. You said, “To build something of value, you have to own it.” And in today’s age, there’s a lot of tools out there, there’s a lot of tools that can do all sorts of things that can help you bootstrap. Like you can do email, you can do everything, you can plug in if you’re in E-commerce, to plug into a 3PL pretty quickly, you can set up a Shopify store, you can be selling tomorrow.
So my question to you is, I agree with that sentiment, but when do you know when it’s time to start building your own IP, internally, within your organisation? Whether that is acquiring and setting up your own warehouse and automation systems, or producing your own in-house software to do everything? Like to perform a core function of what’s special about your business. Like when do you know? How did you guys work that out? Obviously as well, when you’re bootstrapping, right?
Steve: Mm-hmm. That’s a great question. So in our journey, when we first started we earned nothing. So another company had provided a White Label Website, and was doing all the distribution, and all the fulfilment.
Nathan: Mm-hmm, yeah. That’s how you’ve gotta do it.
Steve: And we reached that.
Nathan: That’s how you’ve gotta do it if you’re bootstrapping.
Steve: Yeah, exactly right. And so over the next few years, when we saw that the revenue was increasing, and had traction, so we were already turning over a few million at that stage. Still, on 99% of our systems being completely outsourced, it can be taken away very quickly as well. So we knew the ins and outs of this other company, we found they were falling behind if you like, in our expectations. From a system point of view, from a customer service point of view, from a distribution point of view, and we felt, at a certain time, we felt we needed to take control.
And then we also believed that the business was that serious now, that if we wanted to sell it then we had nothing to sell, if you like, it was all done by this other company. So in order to stop all those problems and in order to, if you like, create our value, we knew that we needed to build our own capability. Now we still use a lot of external systems where it makes sense. We constantly have a diverse build strategy. We’re using, obviously another EDM platform, we’re using heaps of tools in our front end and our back end. But our core systems, we decided way back, if you like, three years after our foundation, to build our own capability. And we constantly build the company in a way that it can be sold.
And there’s a few lessons around that as well, that I’m happy to talk about. One of the things that we’ve always done, and made sure that our financials, our financial reporting and our accounting are top-notch. And that even started before we started Booktopia. So we’ve always had financial advice, and our books have always been in absolute order. It’s not our strength, so we had a bookkeeper, and then within only a couple of years, we had a part-time financial strategist. A gentleman whose now on our board, I should say still on our board, giving us financial advice. We also, a number of years ago, decided to have our books sourced by PWC and that led us, that serves us extremely well.
And being a private company, we didn’t need to do that, but we just knew that it was important. We knew that when people were looking at our company, and they were asking the questions about our finances, they wanted to see rock solid financial management and order to the accounts. So I would definitely give any founder the tip that it may just look like a whole bunch of receipts, and a pain in the neck, and you wack your monthly hosting on a credit card and whatnot, and that’s all true, but they need to set up solid financial management right at the beginning. And if it’s not your strength, invite it in.
Nathan: Mm-hmm. Love it. So talk to me around these acquisitions, because you guys have made some interesting acquisitions. In particular, you bought Angus & Roberson’s Bookworld business from Penguin Random House. Would you care to comment on that? So was that part of the retail front as well?
Steve: What happened was that a number of years ago Angus & Robertson merged with Borders. If you remember that, when Borders was still around. And the VP, private equity group when Borders sold it, they essentially took all the Anderson & Robertson stores with them, the Anderson & Robertson business. So Penguin bought the brand, and the Angus & Robertson website, had it running for a few years, lost a tonne of money trying to do it, and I don’t really believe publishers can do retail very well. And then that essentially put the Angus & Robertson Bookworld, they were two websites, and the brand on the market, and we saw an opportunity to actually buy it because it was a perfect fit for us.
So we actually bought the website, the whole business, and we integrated their website into our distribution facility within 30 days. So it was a very strategic buy. Not the least is that it was almost a 130 year old company, and it was literally gonna go, it was a very, very good chance of disappearing completely. So for us it was also an honour to save such an amazing, well known, long standing brand. So we kept the Angus & Robertson part running, we absolutely believe in the brand, it’s a very, very powerful brand. And it works out of the same distribution centre, and it’s a great business.
Nathan: So I’m curious, you said it was very, very strategic to buy it. Can you tell me the merits of the strategy in particular?
Steve: For a couple of reasons. Number one was the brand, as I just said. Being such a well known Australian brand. And the second is that their, Angus & Robertson were the second or third largest online book retailer in the Australian market. So it was extremely strategic to get it in our hands and not somebody else’s.
Nathan: Ah, I see. So then-
Steve: Does that make sense?
Nathan: Yeah, that makes sense. So basically you bought the brand, so all that brand equity, you keep that. And then when people are selling the books, like when you guys are selling the books whether it’s through Booktopia or Angus & Robertson, the customer would not know the difference because it’s still just going through you guys because you have you’re own distribution centre set up. So it’s just basically plugging in and bolting on another channel almost, for sales.
Steve: Yeah, that’s exactly right. I mean we have, the parcels have their own labelling. Angus & Robertson is run as a business unit. So they actually do their own marketing, they’ve got their own customer base. The pricing is different on the website, some of the stock is available if you like, the stock or the titles that are in stock are available from the same distribution centre. But they very much have their own marketing, and their own branding, and their own customer base. But it benefits from shared services obviously, but they need our location, and sharing customer service, and finance, and IT, and whatnot.
Nathan: Yeah, you get economies of scale.
Steve: The actually Angus & Robertson brand is extremely strong.
Nathan: Gotcha. Okay, that makes sense. No, thank you for sharing. So we have to work towards wrapping up, so talk to me, you also bought an online camera and optics company, which is kind of, still online but different niche, different market.
Steve: A bit left field.
Nathan: Yeah. What was, why that?
Steve: Yeah. It’s interesting, there’s two reasons for that. Number one is my business partner, Tony was the head photographer, and got into a conversation and cup of coffee, that ended up owning the company. But this simply was that, at the same time we were actually looking for other types of products that could demonstrate the operational capabilities of our DC.
So we invested in automation, process, etcetera and a distribution capability. One other thing that we felt was important was to show that we could actually sell other products, and in particular move them, and distribute them. So that cup of coffee if you like, came at a great time, that enabled us to buy the website. DC Cameras was a company that had, at the time that we bought it, also had a store in York Street, and the founder of that business was gonna close the store anyway, we’re not interested in opening stores.
So it just came at an opportune moment, and that actually happened within a couple months of us buying Angus & Robertson. We actually had to buy and ingest two companies, two brands, both at the same time. And that worked, we actually showed that we could buy a small company, with a different type of product set, and as long as it was a product that could fit in our totes, in the warehouse, the bins, then it had the potential of actually being a success. And that’s what we did with DC Cameras and Optics, which is still running today, it’s a nice little business too. It’s got it’s, again its own customers base, its own website, its own branding. But we fulfil it out of our distribution centre.
Nathan: Gotcha. So you’re-
Steve: I guess all of the capabilities stuff.
Nathan: Yeah, look I really understand now, like where your guys power now is, because you’ve doubled down, and really invested in the automaton and the back end, and the fulfilment side, and you can control that whole supply chain. You can just find other products, and websites, that you can just bolt on and they can plug into your back end, which allows you to, and obviously you’re finding these distressed assets, which you can do really well with.
Steve: Yeah. Now that we can, exactly. So we’ve proved that we can, it’s not our core strategy, but we can. Our core strategy is to be Australia’s’ bookstore, but you’re absolutely right, we showed that we can do that. So if somebody else that’s looking at our business may very well at some point in the future wanna do that, well we, you don’t have to ask the question, we can answer it straight away.
So the other core, you talk about the back end distribution and the supply chain, but the, at least that’s the engine room, the capability that we have in out IT team, and our front end development, and our systems and processes, are world leading. So we have a conversion rate that is much higher than what people might expect for the averaging online retail, and we have a development team if you like, development team that’s second to none. And they are obsessed with the customer experience on our website, and the conversion rate.
And sometimes they can be two competing things, our team are obsessed with those two elements, and that’s why when you go to the Booktopia website you have a very clean and simple experience. And when you’re interested in a product, the site pretty quickly gets you to the place you actually can purchase that product that you can buy, and that’s really key. So again it’s about the customer obsession, putting yourself in the place of the customer. Most of us do online shopping, what is it that we like? Well that’s what we actually need to deliver.
Nathan: Yeah. That’s, I did have a point here to note down, we have to work towards wrapping up, a moment of your time, you have to go, around the CRO. Yu guys are world class at that, I agree, I often look at your website for inspiration. Just one, two last questions and we’ll wrap. The first one is when did you start making CRO, conversion rate optimization, a focus? And how big is that team now? And then when should founders get started, or focused on CRO? And then the last question is, what’s next for you guys, and what’s the best place people can find out more about yourself and your work?
Steve: Yes. So we’ve been focused on conversion in one respect, from the time that we built our first advertising campaign, so when we launched Booktopia. So I know we’re not talking about onsite optimization at this stage, but we’ve always been focused on conversion and acquisition costs, so what you don’t find coming out of Booktopia is a lot of brand marketing. You know, we’re not on bus shelters, were not doing all this massive marketing, it’s always been conversion based.
It’s always been marketing where we can actually see, and measure, the results of the spend. Now for the first three years, we had no control, or not much control, around what was happening on the website, because it was somebody else’s White Label site. However, from 2007 we built our own site. Over the next couple of years we developed, if you like, this hunger for optimization, and so it’s been developing for years and years.
We have an IT development team of around 20 people, and that covers back end developers, front end developers, UX designers, users analysts, and whatnot. So a very, if you like, traditional team structure, but with obviously an agile focus. And so that obsession that I talked about in the back end, absolutely is in the front end. And the, whether it be the UX or the feedback that’s coming for example from the customer service team, or marketing, about what’s happening on the site, and what customers are telling them, is absolutely critical and might as well back in to our development cycle. And in terms of, I think you asked where you can find out more about us?
Nathan: Yeah. Where’s the best place?
Steve: I’m on LinkedIn.
Steve: So people can certainly find me there. But from a personal perspective, most of my work history is Booktopia, so you can go to booktopia.com.au, there’s plenty of information there also about all the awards that we’ve won. And literally last week we picked up the National Telstra Business Award, the People’s Choice Award.
Nathan: Oh, congratulations.
Steve: Which was absolutely … Thank you. It was absolutely fantastic. And earlier in the year we picked up the Best Pureplay, online Pureplay Award at the ORIAS, the online retail industry awards. So we’re constantly winning awards. We’ve been in the fast 100 list for seven years. And yeah, we’re, that’s a great way to find out about us as well.
Nathan: Awesome. Well look, thank so much for your time Steve, this was a great conversation, and congratulations on all of your success thus far. And I know you guys will continue to dominate the market, I love what you guys are doing.
Steve: Thanks so much, I really appreciate it.