Often what differentiates an entrepreneur from the average business owner is the ability to recognise an opportunity with growth potential, to take the risks associated with that opportunity, and have the vision to turn it into a significant profit.
This definition aptly describes 26-year-old Anthony Nappa, who – in 2012, as a 19-year-old – launched an online store from scratch, and which will turn more than $20 million this financial year.
Throughout his childhood, Anthony watched his parents, Elio and Venessa, run their OZ Hair Sydney hairdressing salons – including their 30-year-old flagship store in Sydney's Queen Victoria Building. He saw the increasing competition in the industry, after newly emerged blow dry bars and hair technologies stole market share from traditional hair salons. At the same time, he saw the growth of eCommerce, and recognised the consistent demand for hair and beauty products.
At age 19, in 2012, Anthony was a second-year marketing student at University of Sydney, holding casual jobs as a labourer, warehouse assistant and waiter. In February that year, he launched Oz Hair & Beauty as an eBay store and in July he launched ozhairandbeauty.com, investing $10,000 of his own funds into setting up the store and running the operations in the back corner of his dad's warehouse in Sydney's Miranda.
Anthony received no financial or hands-on assistance from his parents. However, the relationships he had developed over the years with major hair and beauty suppliers enabled him to take orders, because he knew he could get product.
Anthony put his focus on the eBay store in the first few years. He made only three-to-five orders a day in the first few months, then 10-15 orders a day in the second half of that first year. He hired his first warehouse assistance when he began attracting 50-60 orders a day. By 2017, the eBay store attracted 150 orders a day, on average. It was at that time that Anthony began to put his efforts into growing consumer traffic to ozhairandbeauty.com.
In the first year the business made $174,000 in revenue and just $18,000 in profit. In the third year, Anthony's dad's business moved out of the Miranda warehouse and Oz Hair & Beauty took over the entire lease.
Early on, Anthony experienced the ruthless competition in the online beauty space. Realising that customer service would be the differentiator between the multiple online stores that were regularly launching, he went to great lengths to retain customers and maintain positive feedback. In the first three years, he worked more than 10 hours a day, up to 7 days a week, sourcing product, fulfilling orders, packing and dispatching products, establishing partnerships with new product manufacturers, and personally answering all customer emails. Customer service was so crucial to the business that Anthony saw a direct correlation between the number of hours he put into the business and the volume of sales. Oz Hair & Beauty became a Power Seller on eBay, based on a 100 per cent positive customer feedback rating. The wins didn't come without its challenges, however: Anthony almost dropped out of university due to time constraints, once exhausted all his overdraft when he ordered too much stock, and had his website go down for a two-week period.
In the first year, Anthony's 15-year-old brother, Guy, would work casually for him during holidays and weekends. At age 19, in 2017, Guy purchased a stake of the business, and the brothers became partners.
With a focus on efficiency, Guy re-designed and expanded the warehouse, and introduced new technology, processes, and employee training. The brothers invested their time in ozhairandbeauty.com, where it took 95 per cent of sales, and scaled down their eBay store. As a result of these measures, Oz Hair & Beauty doubled its order fulfillments without employing additional staff.
Today, Oz Hair & Beauty employees 25 people, and is turning over $2 million a month – establishing the website to one of the leading haircare and beauty platforms in Australia. Oz Hair & Beauty is the best-rated hair and beauty online store on productreview.com.au, with almost 1000 reviews and an average 5-star rating. It has been averaging 250,000 visitors and 20,000-23,000 orders a month.
Anthony and Guy have recently signed a new lease for a 1500 square metre warehouse space in Sydney. Anthony forecasts the business will turn over $25 million in the 2020 financial year, based on first quarter sales.
Anthony's parents, Elio and Venessa, are so impressed with their sons' growth of the business that the family is looking to merge Oz Hair & Beauty with the OZ Hair salons in 2020.
Question: What originally inspired the idea for Oz Hair & Beauty?
Anthony Nappa: The actual idea for Oz Hair & Beauty started as a hobby to get me through University, I was working as a laborer and when my boss went on holidays, I had some spare time as I was only working in a restaurant on weekends, as a waiter. I always wanted to excel and my parents owned hair salons which is where the idea to sell hair products on eBay came from. As the eBay store took off I was inspired to build a beauty brand and Oz Hair & Beauty was born. I sent an Oz Hair & Beauty business card to my eBay customers directing them to buy from the site, for their next purchase.
Question: Are you able to talk us through the risks you took in the early stages of business development?
Anthony Nappa: The main risk at the beginning was after the eBay store I funded an online store with all my savings. I didn't know a lot about eCommerce and I probably wasted money or I was ripped off by others as I had no knowledge of eCommerce at the time, which was a risk.
Three years in, I purchased too much stock and I went into debt where I was unable to pay my bills for a month, which was scary. Luckily we got through it and it's made the business stronger.
Question: How did you identify the market for Oz Hair & Beauty?
Anthony Nappa: I'd always been into buying and selling which is where I initially started, at eBay. I took the opportunity of having the supply from my parents companies and eBay made it easy to enter the market.
We now use social media, technology and experience to identify trends in product sales along with experience and knowledge. Social media drives our choice in brands as we try and sell on the back of existing branding. It's been a lot of trial and error in crafting this business.
Question: Do you believe starting Oz Hair & Beauty at 19-years-old was integral to your success?
Anthony Nappa: Yes, I definitely do. At 19-years-old I was working crazy hours and it was okay as I didn't have many other commitments or obligations. It was just me working at Oz Hair & Beauty for the first eighteen months and I was able to use that time to get my name out there. At the start it was very advantageous being young.
Question: What do you believe the biggest threat to an online store is, currently?
Anthony Nappa: I believe I can speak for everyone when saying the biggest threat is the big companies such as Amazon and Catch of the Day; these companies don't have strict policy to make margin on products and they can manage a loss especially with first-time customers. Oz Hair & Beauty and other small companies can't afford the overheads that the larger companies can and that is a threat.
Question: What has been the biggest lesson you've learnt over the past seven years?
Anthony Nappa: It's best to invest in building your own brand instead of investing in other bigger companies such as Amazon or Catch of the Day.
I learnt values from my parent's family business and that people want to do business with people. We have a "be a good person" policy in our office and this means we always reply nicely to emails and ensure we have come to a resolution rather than being angry with clients or customers.
Interview by Brooke Hunter