Nelson boarded at college in a nearby city and started his accountancy degree at Charles Sturt University at Wagga Wagga in 1994. He switched to company administration but in his second year began with heroin and dropped out of college, while maintaining a full-time job with an appliance retailer.
When he lost that job, Nelson answered an advertisement promising high pay and training as a door-to-door vacuum cleaner salesman for Kirby.
Nelson was highly motivated and over nine months he had a group traveling all over New South Wales.
After he discovered Dubbo — population 30,000 — had a vacuum shop, he approached a national series to establish a franchise in much bigger Wagga Wagga. The chain agreed.
Nelson started a six-month training program in Sydney. His heavy heroin abuse continued.
“I tried to get clean a couple of times. But I did not conquer my addiction before we opened our very own shop in Wagga Wagga in 1998.”
Nelson, who secured the franchise for no cash as the franchisor effectively offered vendor financing, built the business from roughly $5,000 to $17,000 a week.
In 2002, he opened That Repair Shop, servicing vacuum cleaners and other appliances, and started listing vacuum components on eBay.
“But the head office noticed we were getting sales outside our land and we were advised to shut down the internet channel, or leave the franchise,” Nelson said.
He left the franchise, getting money for his inventory but nothing for the goodwill, losing about $150,000 by his quote.
Around the same time, Nelson, who was using his Kirby contacts to obtain traded-in vacuum cleaners, then repair and sell on eBay, had his supply dry up.
“Ironically, our $12,000 per month eBay earnings hid the appliance repairs were losing money,” Nelson said.
His accountant was supporting on the books, suppliers had not been paid, and the building that he was renting was sold, giving him a month’s notice to proceed. Nelson was over $100,000 in debt.
The month before he had purchased his first home, which included a massive shed. Nelson set up a vacuum repair centre in the drop and kept the repair store phone number.
Within a month, he was repaying almost $800 a week to old providers — using profits from the repair surgery — and within six months he had been selling $1,500 a week of vacuum cleaner parts and accessories on eBay.
Then he launched his own site, NelsonVacuums.com.au, in 2007. He tried a design and setup from friends. It was unsuccessful. He transferred to Ashop, an Australia-based hosted shopping cart. He obtained his first sale in hours. By 2008 gross monthly earnings were approximately $15,000.
In the end of 2008 Nelson hired a prominent Sydney programmer for $20,000 to make a sophisticated new site.
“The website did not go live until July 2010. Customers complained, were not able to find out the fancy new navigation and search mechanism, and costs blew out and earnings dwindled to $3,000 a month,” Nelson said.
He redesigned it to be plain, with easy navigation, used apparently every search-engine-optimization strategy to get discovered, and had earnings again.
VacuumSpot received $334,000 in gross earnings in its first year. It climbed to $669,000 the next year and climbed to $1,030,000 in its third year ending in October 2013.
Ecommerce Shopping Cart and Web Design
“Ashop cost $50 a month including hosting, and we spent about $500 on a skin for this but we could not add customized features. We spent $20,000 with the Sydney-based programmer, who dropped us money and clients,” Nelson said.
The Ashop website wouldn’t let him access the site’s code to perform A/B testing, nor to execute Google Analytics and user friendly URLs.
Nelson then moved VacuumSpot.com.au into the open minded Magento platform in December 2011, employing a programmer sourced from Elance for $2,000.
“Our [Magento] programmer did not implement URL redirect codes and our indexed pages had mistakes. We also had server problems — being responsible for our own hosting — which slowed the website down. All these mistakes cost us revenue for two months,” Nelson said.
Credit Card Payments
Nelson uses PayPal Payflow Pro and ANZ eGate, a payment gateway and chip from ANZ Bank. Now that his site has high volume sales, he’s renegotiated the ANZ prices from 2.2 percent to 0.87 percent on many cards, not including corporate cards, American Express, or Diners Club. VacuumSpot also accepts direct transfers and money orders.
“Every day we publish the orders and just grab and package them. Anything not in stock goes to an email for ordering and it arrives the following day. It’s beautifully straightforward and it works,” Nelson said.
Nelson has progressed from cheap, shared hosting, to VPS hosting, to cloud hosting.
“We’ve just migrated to Amazon Web Services for reliability and scalability. This is an enterprise level of hosting and although it’s pricey at $400 a month, website speed is important to customer conversion,” Nelson said.
“We’ve grown in three years from being just me part-time to three full time workers — one each in the warehouse, administration, and customer service — and two part-timers,” Nelson said.
“Our advice is built into the web site for our customer care department. So as we expand, we all will need are additional order packers.”
Search Engine Optimization
Nelson has participated two Sydney-based companies, but he says that they didn’t deliver with no penalty on the next Google update.
“About a year ago we hired Evolving SEO [a Massachusetts company ] to assess URL structures and search-engine issues, utilizing analytics tools to root out damaging links and have them disavowed to help us return to positions following a penalty, while we created the articles,” Nelson said.
After experiencing a reduction parcel rate of about 2% using Australia Post’s standard mail service, Nelson now only uses Australia Post’s eParcel applications for all shipping, which will be monitoring at 0.03 percent for lost parcels.
Product Sourcing and Inventory Management
With over 15 years in the vacuum sector, Nelson has close relationships with all the major providers in Australia.
“Since we have such critical purchases, we could get exceptional deals [from providers ] based on quantity. We often request a quote comparing to a provider’s competitor,” Nelson said.
Nelson purchases in bulk to receive a discount and re-orders when stocks are low.
“We order on demand for slower moving inventory; many of our suppliers ship overnight and so there’s absolutely no delay to the client,” Nelson said.
After using the Banklink accounting applications for three decades, Nelson has just changed to Xero, a cloud-based accounting platform, for $50 a month.
“Xero integrates with Magento. However we are linking it only with our bank accounts, not the site, until we feel comfortable with it,” Nelson said. “We’ve learned our lesson about adding too many functions to the site simultaneously.”
“Pinterest isn’t a good match for vacuum components,” Nelson said.
VacuumSpot’s YouTube channel.
Nelson reinvests profits in his site, hosting, and website technology. But he’s become more cautious about spending.
“After two quite expensive errors we now pay ourselves correctly and don’t have any debts, so we’ll grow completely organically,” Nelson said.
“Most individuals do not know their vacuum version. We ask the correct questions to direct them to the proper item,” Nelson said.
While site conversion is 6%, over 50 percent of mobile queries convert to sales.
“We list all sorts of obscure stuff, whether it’s a motor for an old machine or a circuit board. We’ve got diagrams and parts lists for virtually every vacuum ever made and since we dictate daily we could get one-off parts within a day or so,” Nelson said.
“Initially we didn’t monitor gain, so even though we had a fantastic turnover we were not making money,” Nelson said.
His company also had highly trained technicians. “But since they were in short supply, when two of these were seriously under-performing I could not replace them.”
Nelson is upset by the costly site, for Nelson Vacuums, his first website, which cost him money, time, and clients.
“We very nearly lost everything,” Nelson said.
“Being forced to learn about SEO and user experience has been critical to our success; we lead the field in conversion because our content is so rich,” Nelson said.
“Recently, I got a distress call from a client needing a enormous quantity of product overnight to repair a problem for him. Due to brilliant provider relationships I delivered the goods and earned myself my largest single day gain,” Nelson said.
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