Brand Spotlight

From rucksacks to riches and Sunday Times FT status

Posted by:
The Scale Up

02 Nov 2020
Growth

The backstory – Velocity Commerce

PJ Scott and Eddie Latham first met while working at Play.com and, during this time, the pair identified that sales on online marketplaces, such as Amazon and eBay, were the fastest-growing of all retail outlets, which led them to create an opportunity for brands.

They took the risk to go into business together, putting up £1,500 each of their own money to buy 3,592 end-of-line Belkin rucksacks. They started selling the rucksacks on Amazon and eBay, making just a small profit, but, importantly, growing their knowledge of how to best optimise products on the marketplaces.

Velocity Commerce grew from there.

Do things you love.
The easiest thing to do is turn a
hobby into a profit.

- PJ Scott and Eddie Latham, Directors, Velocity Commerce

So, what’s Velocity Commerce up to now?

Today, with seven years’ experience selling on online marketplaces, Velocity Commerce manages product sales for a number of large consumer brands, and has built strong relationships with eBay and Amazon.

Over the years, we’ve expanded our services and now offer full Amazon marketing consultancy as well as a fulfilment service. We manage product sales from end to end, including listing, optimisation, distribution and customer service. We also offer an outlet for returned and refurbished stock, helping to prevent excessive wastage of usable and resalable products.

Since starting out, Velocity Commerce has experienced incredible growth. In our first full year of business, we saw sales of over £500,000. In 2014, sales reached £1.4million, then grew phenomenally every year to reach £30million in 2019.

Those are some seriously impressive growth stats. How did you manage to achieve such great success online?

By staying true to our entrepreneurial spirit. Diversification of both the company’s clientele and operations has been crucial to sustaining growth.

We never partner with our clients’ direct competitors, and our new business approach is data driven. Instead of seeking the next big product, business development is led by what consumers are already searching for and we’ll approach brands which are missing out on those opportunities.

Through this approach we identified a gap in the market for affordable, quality consumer electronics and an opportunity to grow a new brand on Amazon and eBay. We launched our own brand of consumer electronics, ‘Majority’, which is now the second largest brand of DAB radios in the UK and recently launched in the USA.

By working closely with Amazon and eBay, we’re able to access and use consumer data, allowing our team to better understand consumer behaviour and capitalise on this, informing business and sales strategies.

As owners of a Direct-To-Consumer (DTC) brand, we understand the pain points that brands face when selling on Amazon and eBay, and are proactive in making the process as seamless as possible.

There’s a perception that you need to be brave to start a business and that if it goes wrong then it’s a failure.

- PJ Scott

What does the Velocity Commerce team look like now, seven years later?

We’ve never forgotten where we came from. Seven years ago we were working out of a garage, working all hours of the day and night to pack up deliveries, while managing the operations of the business too.

To us, every Velocity Commerce employee is crucial to the success of the business and we want to enable every individual to make key decisions within the departments that they have clear ownership of. Everyone can make a difference here. When building the team, we believe that if the business has staff who are driven and ambitious, over and above simply proficiently skilled, they will be better placed to keep pursuing consistent growth.

By coupling apprentices just starting out with experienced and dedicated mentors, and fostering an environment which promotes collaboration and learning, the company never gets stuck in the mentality of doing things a certain way. In the past 12 months, we’ve grown the number of employees from 15 to 30 and have expanded to a second UK premises.

With these new hires, the level of staff expertise within the business has increased. We’ve invested more in individuals with unique skillsets in the eCommerce industry, with a view to growing the services Velocity Commerce offers.

New employees include Barney Sturrock, Category Manager, who previously worked at Tesco where he was part of the team that built the Tesco Hudl branded tablet; Stuart Pogson, Velocity Commerce’s Business Intelligence Manager, who has extensive experience in improving the effectiveness and efficiency of merchandising, supply chain and retail businesses; and Carl Farrow, Operations Manager, who has vast experience in managing the logistics and fulfilment of customer orders.


Giving back is also clearly important to Velocity, what sort of initiatives do you support and why?

The whole team has an aspiration to give back. Everyone is passionate about getting out there to raise valuable funds for the charitable and community causes they believe in.

One area the entire team is passionate about is sport and, at the start of 2020, Velocity Commerce launched the #BackedByVelocity initiative to support grassroots sports teams from all over the UK with sponsorship and funding.

Since launch, we’ve partnered with a range of local and community sports teams from football, to water-polo, providing funding for new kit, season subs, coaching and much more. Sports teams, community clubs and local charities and organisations looking for funding and support can get in touch via an application form on our website. Clubs and teams can be part of a school, college or university, or can be run by the local community, and funding can be for anything, big or small, depending on the needs of the club or organisation.

Through ‘Majority’, our own brand, the team has been supporting charities that help isolated and vulnerable groups by donating radios to provide lonely residents with entertainment and a window to the world. During self-isolation, we’ve extended this initiative by donating digital radios to care homes in the local area. We’ve also worked with Cambridgeshire based housing charity, CHS Group, to donate gifts to vulnerable young people celebrating milestone birthdays while in isolation.

Believing in the potential of young people, and as huge advocates of learning while doing, we work closely with local schools as part of the Young Enterprise programme. The programme aims to motivate and prepare young people to succeed in the changing world of work by equipping them with the skills, knowledge and confidence they need. We’ll often visit the schools and give talks to groups of students, discussing entrepreneurship, business, strategy and everything in between.

And finally, do you have any key advice for eCommerce businesses looking to take their growth to the next level?

At Velocity Commerce we admire anyone who starts a business. There’s a perception that you need to be brave to start a business and that if it goes wrong then it’s a failure.

We don’t agree with that and think learning from doing, whether it’s ‘successful’ or not, should be encouraged. As such we really admire anyone who is willing to just give it a go, not worrying about the outcome or stigma attached to ‘failure’.

We learned a lot very fast when we first started out and to learn you have to go through, and get through, the losses, but it’s important not to be afraid of them and even more important is not to regret them.

In the early days we used to get sucked into things like the race to zero, for example: in online sales, a distributor sells you a product for £10; you sell it for £15; the same distributor then sells the same product to a competitor for £10 and your £15 sales price soon gets undercut. Before long, you’re in a race to the bottom. But we found a solution to that by sticking to end-of-line stock.

The beauty of clearance stock is there’s no more of it. You’re buying the whole market, so you control the price. You can also take a product that’s been unloved first time around and tweak the marketing, re-angle the description, update the images, and give it a new lease of life. We’ve taken that learning and in our consultancy business, we never work with brands and products that are in direct competition.

Don’t expect to make money from day one, take small risks, trial things, and try not to lose too much while you build up knowledge. The experience you will gain will allow you to carve out your own space in the industry or market you enter.

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James and James Fulfilment

It all began in 2010, when James Hyde and James Strachan couldn’t find a modern shipping service for the eCommerce business they ran. Faced with messy warehouses based on out-dated systems, they decided to build their own.

We’ve not stood still since, helping hundreds of online brands scale up – and scaling with them.