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From $10k in savings to $2 million a month in sales: How two teenage brothers started an online beauty business now competing with Australia’s e-commerce giants

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Anthony Nappa (left) and his brother Guy (right)

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.

Getting the business of the ground

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 challenges of business success

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 employs 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.

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