How a simple strategy made this entrepreneur 7 figures in a year
Svejna Teichmann cashed in using clever Amazon-SEO on Germany’s biggest retail platform
Successful businesses in today’s digital marketplace are well versed in SEO. Be it on Google, on Youtube or on Amazon, there is no way around search engine optimization. In Germany, one savvy entrepreneur has taken to SEO game to Germany’s largest online retailer OTTO. Svenja Teichmann and her company Disset Mode figured out how to optimally place name-brand products on the platform—and turn seven figures.
Actually, Teichmann’s main job is co-managing Hamburg-based content marketing agency Crowdmedia. For the past five years, Disset Mode has merely been a pet project of hers. Before that she was a long-time staff member at Otto: first as a freelancer and then as a full-time employee on the “One-Stop-Shopping” digital marketplace, where she acquired new brands for the platform. Here she learned the skills and made contacts in the fashion industry, which wound up paying off eventually. More on that later. When she launched Disset Mode, she did so with her former business partner and paid €50K in share capital out of pocket.
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During her time at Otto, she recognized the problems facing small and medium-sized fashion labels—and the business potential it entailed. “The success of many brands depends on being found on platforms, such as Otto. But so many of these brands lack the knowhow or resources more often than not. Some are even completely devoid of product images and descriptions,” Teichmann says.
If it looks and acts like an Online shop…
“We have roughly 400 articles listed on Otto at the moment,” Teichmann tells us. “At Disset, our primary focus lies on the Otto marketplace. When end customers place an order, they are unaware that neither Otto nor the fashion label itself takes on the logistics. In fact, Otto collects orders and outsources them to us. We carry out the deliveries in the background through our warehouse, but customers only ever communicate with Otto. Even for returns,” Teichmann says. “We began shipping goods from our basement, now we have our own warehouse.”
A ser look at Disset Mode’s business model.
Disset Mode purchases goods straight from the brands, as an operator of an online shop would. These are mostly name brands, like Lee, Scotch & Soda, Pepe Jeans and Desigual. Acquiring them, however, requires having contacts at the respective brands, as well as striking up partnership deals. In the end, Disset Mode is not active as a service provider, but acts on its own behalf. The company pays in advance and uses their expertise, which most brand pages lack, to better rank on shopping platforms.
Marketing costs steady at a solid zero
For every sale, Disset Mode pays the platform a commission. On Amazon that figure is 15 percent, on Otto it’s higher—but the exact figure is negotiated individually. “Collaborating with Otto, About You and Amazon means smaller margins than working as an online shop operator. But since we have no marketing expenses, the margins remain profitable for us,” Teichmann says. All marketing activities are, in fact, carried out by other parties. On the one hand, brand recognition drives sales, while on the other, the platform brings the customers.
By cleverly including relevant keywords in the product names and descriptions, the Otto SEO strategy pays off. “Generally speaking, we don’t engage in discount wars because we distribute our risk across the entire platform, which enables us to generate high sales at the original price. We have brands in our portfolio with sales rates at about 90%—without offering any discounts. Brands love that,” says Teichmann. From article sales on platforms, Disset’s revenue for 2016 increased 30% over last year—somewhere between €800,000 and €900,000.
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“Our strongest brands are Khujo, Desigual and Pepe Jeans,” Teichmann says. Her contacts from her time at Otto and her private network provides her access to brands and helps her land them for partnerships on various platforms. Since September 2015, her colleague Dominique Arnold has headed up purchasing and acquisition of brands. Previously, Arnold ran purchasing for women’s articles at another digital Hamburg-based retailer, Frontlineshop. And she, too, was able to bring her contacts with her. Simultaneously, however, the team closely coordinates purchases with Otto. She says they closely observe trademark rights, so that once a brand is offered by Otto on its platform, no other partners, like Disset, are allowed to offer such a brand. This makes Otto unique compared to other platforms, like Amazon—and makes having close contacts to brands even more important.
At Disset, company development is headed up by a team of five talented women, and Teichmann is also actively engaged with bei Digital Media Women, a group dedicated to increasing the visibility of women in business.
The competition is heating up
Disset, however, is not the only player in the game. In mid-2016, two former Otto employees financed their project “heypaula” using the crowd-funding platform Seedmatch. Currently, the company is focusing its efforts on premium brands—including Replay and True Religion. Furthermore, “heypaula” has access to Zalando’s platform and runs its own online shop with the same products listed on other products. Beyond that, the product offer is very similar.
In search of: investors and more platforms
“In the short term, our aim is to acquire new brands for our project, streamline our logistic processes and add additional platforms, such as Zalando,” says Teichmann. Until now, Teichmann says that the company has only grown using their own cash resources and has turned a profit from the beginning. However, using internal resources alone cannot bring about the level of growth that Teichmann hopes to achieve. That’s why she’s currently looking for investors, so that the company can take the next step and expand through the addition of international brands—an area where Teichmann sees significant growth potential. Disset offers its services to global brands looking to gain traction on the German market and on the largest shopping platforms—without taking on any undue risk.