Simas Želvys was born to be an entrepreneur.
He graduated in the early 2010s with an MSc in civil engineering and started working at Lithuania’s National Railway authority. Toiling away at a state company was not what he was made for and after a year he co-founded an engineering and project management company with a former schoolmate.
At university Simas had discovered e-commerce and began selling hand-knitted socks and scarves locally. During the winter months the average temperature in Lithuania never goes above freezing and soon his self-described “e-commerce hobby” demanded more and more of his time. By 2015, Simas was at a crossroads.
He decided to follow his love for e-commerce and leave the engineering world behind. He sold his share in the project management company to his partner and poured the proceeds into his early-stage e-commerce business.
Selling on eBay, Amazon, and Etsy was profitable and in a short time, thanks to Simas’ good command of processes and his training as an engineer, his business began to grow.
To fuel growth, Simas used his savings, but within a year he realized that he had to solicit outside funding. To his wider social circle, he pitched his expertise, his knowledge of logistics and product sourcing, and above all the business processes he had put in place that had helped him grow thus far. Arturas Vainauskas, a web developer and digital marketer, and Ramunas Zvybas, a supply chain expert, joined him and by sharing responsibilities they managed to sustain their growth and add a new product line in the accessories/jewelry category.
Simas Želvys and I were introduced in late 2018 by Augustas Kligys of Orange Klik, a digital nomad, Amazon podcaster and trade fairs organizer. Storfund had just launched and we were reaching out to the Amazon community to increase the awareness of our daily payments service. By that point, Simas had exhausted all sources of funding and was also facing delayed Amazon payments in the form of unavailable balances. Amazon wasn’t paying him the total balance on Day 14, instead reserving some of the money to be carried over to the next payment cycle. Simas calculated that he was getting paid in 30 days and sometimes even in 45. His savings were depleted. His cash cycles were getting longer and restocking in time was impossible. He and his partner were at a dead end.
During our first video call, I learned about his jewelry business and his belief that a private label, coupled with product category specialization is the way forward on Amazon. Simas was purchasing raw materials from China and Eastern Europe and assembling them in Lithuania. His recipe of product success resided on quality control and short lead times while his growth plan was all about expanding beyond jewelry. Storfund was needed to unlock the trapped liquidity and offer the much-needed cash flow predictability.
Simas had a compelling story and stellar metrics on Amazon and we ended up on-boarding the Lithuanian LLC in late Q4 2018. What I found hard to believe was his prediction that by the end of 2019 he would be a €1 million seller. I advised against over-ambition, while at the same time urging him to bet smartly on the new product lines. Unsold inventory has been a killer of business for centuries.
Over the next months, the Amazon business kept growing. Simas added private-labelled products in two categories: pet supplies and DIY tools. The expansion to pet supplies was pure happenstance, no Jungle Scout-like software, nor any mapped-out process. Simas and his partner just wanted to lessen the deep-rooted seasonality of the jewelry business and were out looking for products. They ran into dog vitamins and decided that this was ‘the thing’.
They tried – unsuccessfully – to strike a deal with the manufacturer of the vitamins. Undaunted, they examined other pet products and ended up launching a private label line without the dog vitamins. The DIY tools were added in the second half of 2019. The toolboxes are sourced from Poland, packaged and distributed from the warehouse in Lithuania.
According to Simas the usual growth strategies on Amazon are two. Either you sell 1,000 pieces of one SKU or 1 piece from each of 1,000 SKUs per day. He and his team believe that the latter is the way to go and have expanded from a few SKUs on offer to more than 400 SKUs in three product categories and across 8 marketplaces.
Success did not come without bumps in the road. Expansion to Australia and Japan turned out to be a costly endeavor and sales never really took off, probably because of the wrong product assortment. Simas managed to offset some of the cost with savings from using Storfund to convert his international sales into the local currency. Close to half of his annual turnover comes from the US, Canada, and the UK and since Storfund not only advances against these balances but also converts them into euros at low cost, Simas managed to save thousands of euros in currency fees.
Simas did become a 7-figure seller. When he joined Storfund his monthly balance net of all Amazon charges, fees, and product returns was hovering around €10Κ. In December of last year his monthly balance was in excess of €100K and his month-over-month growth amounted to 18%.
Ambition does pay off, as long as you know what you are doing.