400% growth in 18 months – from $3m to $15m
Seven to 50 members of staff
Saved 80 hours per week – equivalent of two full-time staff with new tech doing the heavy lifting
“There’s a philosophy in e-commerce: when you’re making below 10m it’s about the hustle; about your products and marketing. When you start to make over 10m, it’s about processes and people. If you don’t switch that focus, everything will break and you’ll never scale.”
Kaevon Khoozani, Founder of Bells of Steel
With a love of lifting that seemed to seed before he was born (his great uncle owned a ‘House of Strength’ in Iran), perhaps it’s fate that Kaevon Khoozani became the self-made founder of a multi-national fitness brand worth $15M. In reality, he owes the phenomenal success of his ‘proudly Canadian’ company, Bells of Steel, to a set of smart business moves, and an unflinching faith in himself during times of unprecedented challenge.
Back in 2009, Khoozani was supplementing his business degree with a job in a Calgary fitness store when he noticed a lack of Olympic-level equipment, such as bumper plates and kettlebells. His boss wasn’t interested in stocking it, and so led Khoozani to discover an e-commerce niche that would make him $150k in his first year.
What began with selling to people on Craigslist from his Ford Festiva became a full-time career move for Khoozani. He dropped his plans for a corporate job, set up a BigCommerce e-store, took on a silent partner and hired staff. An entire at-home gym kit – complete with power rack, barbell, bench and plates – became their star product, and Bells of Steel held its own as a popular DTC home-gym supplier for the next decade.
“I often refer to Bells of Steel in ‘pre and post-pandemic’ terms”, Khoozani said. “As everything changed for us in 2020.”
In a similar story to thousands of retailers, the pandemic hit the business like a storm. A mass shift to online shopping, particularly for home fitness equipment, meant Bells of Steel’s team of seven couldn’t keep up with surging demand.
Khoozani hit a crossroads. “I was the most miserable I’d ever been in business. My choices were, sell the company, stay small, or hire a bigger team and keep scaling until I no longer wanted to quit. I chose option three.”
He hired 39 new staff, opened a larger warehouse in Toronto and a retail store in Indianapolis, added 3PL in LA to cover West Coast demand, and completely overhauled the website.
The risks associated with rapid scale paid off – with the increase in staff-power, stock levels and channels, Bells of Steel could meet demand and revenue soared. But as consumer hunger for kettlebells charged on, the company’s increasingly complex workflows were losing them money and causing them operational headaches.
“I’m a sales guy,” Khoozani says, “So I was fixed on revenue. There’s a philosophy in e-commerce: when you’re making below 10m it’s about your products and marketing. When you start to make over 10m, it’s processes and people.
“If you don’t switch that focus, everything will break and you won’t scale. That’s exactly what happened to us.”
As is often the case when companies rapidly expand, increased complexity in the back end caused the team endless operational problems – and their manual inventory management and accounting inaccuracies spiralled out of control.
The company was made up of ‘a patchwork of software’ with little cross-communication, and had two full time staff dedicated to keeping figures accurate. The lack of visibility, especially in inventory, meant Bells of Steel’s margins suffered, and staff weren’t able to make well-informed decisions.
Though growing with such speed was the right choice for the business, Khoozani’s financial partner insisted on a solution to their breaking infrastructure behind the scenes.
“My CFO said, ‘This is a mess – we need more sustainable processes, it becomes more important the bigger you grow.’
“That’s when the hunt for a suitable operating system began.”
A HEAVYWEIGHT SUPPORT
Khoozani wanted to avoid a traditional ERP. “Some friends had given up on ERPs like Netsuite and Odoo after they took over two years to deploy,” he said. “I’d also seen MS Dynamics in action and was shocked at the complicated back-end, which just looked like a mass of spreadsheets.”
After being turned off by the overly complicated and clunky offerings on offer from classic ERPs, Khoozani started looking for alternatives and came across Brightpearl’s Retail Operating Solution.
After seeing Brightpearl mentioned in e-commerce forums and reading its customer stories, Khoozani was drawn to its retail focus and ease-of-use, alongside its great financials and reporting functionality. He soon signed Bells of Steel with the flexible Retail Operating System and was set up in a speedy 120 days.
“Brightpearl took only four months to deploy and the UX can’t be understated,” he said. “It has easy cross-compatibility with the apps we use like Xero and Freshdesk, and its Plug & Play integrations made it the most progressive solution for us in terms of connectability.”
Since Brightpearl stepped in, the benefits for Bells of Steel kept on coming.
Their lack of inventory visibility was solved with Brightpearl’s powerful Automation Engine, which automates and streamlines processes such as ordering, inventory, warehouse, shipping and fulfilment, and offers in-depth inventory insights across multiple warehouses and channels. The team can now manage and replenish stock in just a few clicks, saving them tons of time in manual processing.
The team also turned to a game-changing forecasting tool to replenish individual components of its flagship product, the at-home gym kit – as well as boost profits on their margins with accurate, data-driven sales forecasting for all products.
Khoozani says: “There’s so many moving parts to Bells of Steel, so bringing them together into one central source of truth has not only saved us time on operations and improved cross-department communication, but enabled us to allocate costs correctly.
“Basically we have full visibility of what’s going on, therefore a tighter grasp on our spend. The impact of that has been huge for our bottom line.”
Time certainly has been saved with the team’s new tech-led approach. The two members of staff hired to double-check financials are now used more effectively, saving the business a phenomenal 80 hours a week.
Khoozani’s courageous risk-taking in the face of the pandemic sales boom – choosing to hire staff, open more warehouses, and uplevel their tech to support their expanding infrastructure – means Bells of Steel has grown 400% in 18 months: from $3m in revenue in 2019, to an incredible $15m in 2021.
BETTER, FASTER, STRONGER
Unsurprisingly, Khoozani says the last couple of years have been a huge learning curve.
“One thing I did not expect from scaling is just how badly your infrastructure breaks. Everyone is always chasing that growth, but do you have any idea what you need to have in place to do that successfully?
“Taking on cutting-edge systems was a vital part of our scaling journey. We’re now making smarter data-driven decisions across the board, whether that’s in stock management, product, hiring and more.
“Now everyone is focused on the right goals rather than wasting time putting out fires.”
The retailer is on track to Grow Fearlessly in the years to come. With more time and funds to spend on product innovation, paid ads and influencer marketing, they’ve even got a couple of WWE stars on deck to push the brand forward.
Khoozani says the initial stress of the pandemic couldn’t have been more worthwhile.
“2020 was lucky for us, but more so than the huge bump in sales, it opened up a world of opportunity to keep the momentum going.
“We want to enjoy that sustainable growth in 2022 – putting focus on Ontario, increasing our US sales, then branching into Europe and beyond.”
The post Bells of Steel and an Iron Will: How This Fitness Retailer Grew from $3M to $15M in 18 months appeared first on Retail Minded.