The founders of expondo started their business just like many on the internet. They traded on auction sites and turned a small website into a store that sells products for 120 million Polish zlotys (28 million euros) and increases its sales by 50 percent each year.

By Filip Kowalik

Piotr Stach and Waldemar Moss sit at the desk, above their heads hangs a picture. In fact, it’s just a frame with a small plastic device: The first series product they sold in their online store, a pocket scale. Like countless young people, the founders started their business at online auction houses – initially on eBay. Both entrepreneurs were born in Poland but grew up in Berlin and therefore decided to set up their business in the German capital. Later, the Polish market was added with the Polish platform Allegro.

Originally, the entrepreneurs offered everything that could be bought cheaply and sold by a profitable margin. Over the years, they professionalized their business by specializing and having their goods produced directly in China. The online shop at expondo now mainly contains equipment and machines for professional use. Products developed for gastronomy account for 50 to 60 percent of sales. Last year, the company had total sales of 120 million Polish zlotys (about 28 million euros), to be increased to 180 million zlotys this year – and that at a revenue margin of about ten percent.

“We could grow even faster and even double sales, but we need a stable foundation for this: We need to create the right conditions to maintain control of the company while providing our customers with a good product and a Excellent service to be able to offer. In addition, we have developed from the very beginning, without external investors. “– explains Piotr Stach.

One of the foundations for the company’s success is the fact that its own brands were quickly developed. Brands can make more money than no-name products. And that money was put right into developing the site.

Both founders were born in 1982; Piotr Stach in Wroclaw and Waldemar Moss in Zielona Góra. They met as 14-year-olds and met again a few years later in Frankfurt (Oder) at the European University Viadrina. Stach studied economics and continued his postgraduate studies at the Technical University in Berlin. Moss began studying Polish and German law. Instead of messing with gray theory, he quickly moved to the more practical Federal Criminal Police Office. But even that wasn’t the right choice yet:

“With my flexible thinking, it was difficult to ascend in such a strict structure. My supervisor at the time recommended a job for me with greater room for manoeuvre. “– says Waldemar Moss.

A third time, the paths of the two entrepreneurs were to cross in 2007. Looking for a way to make money, the choice fell on trading internet. On eBay Germany, they initially sold used tools; However, it quickly came up with a more profitable idea: An arbitrage model that benefited from the fact that many sellers lacked the opportunity to offer their cheap products online at the time. So the founders found a company that sold a set of tires with rims for just 100 euros, commissioned a courier service and put the offer online on an auction site.

However, this business model was unsatisfactory in the long run. ‘ You can’t chase and sell bargains your whole life. Until that point, the business was based on luck and the conviction that we will continue to track down suitable offers in the future. However, this approach lacked a real development strategy. “– remembers Waldemar Moss. The entrepreneurs decided to make a strategic change. In 2008, the duo traveled to China, for which Piotr Stach had a deep fascination for years, so he even learned Mandarin. During the four-week business trip, they attended a trade fair in the metropolis of canton as well as around 35 local producers and commissioned the first productions; First, simple pocket scales that would later be followed by highly sensitive devices.

Also in 2008, the store went online – even though eBay initially remained the main distribution channel. The business partners developed an algorithm that analyzed the auction platform down to the smallest detail and found the products that promised the highest sales, the least competition and the best margins. This also explains why, instead of shoes or mobile phones, niche products were placed.

We didn’t want to be the next multistore with the usual products. That’s why we’ve started to create our own brands.”

We didn’t want to be another provider competing with others just for the cheapest price, offering the best-selling products from different segments and looking like any outlet in the end. Our customers expect professional support: A competitive advantage that is difficult to copy in the short term. We started to set ourselves up in specific segments by creating long product lists and creating our own brands. “– Waldemar Moss explains the business idea. Royal Catering stands for the need for gastronomy, welding devices are emblazoned with the Stamos logo (today subtitled of the Welding Group) and measuring devices sell under the Steinberg Systems brand. Brands have also been designed for other promising niches – today, a total of twelve of them belong to the company.

However, there was one problem: It was not so easy to have products made with their own logo in China. Especially if they were not high volumes, but only five devices. The orders were too small for some factories, which is why a network of Chinese partners had to be built.

“We presented ourselves to Chinese manufacturers as a retailer of a large German company and not a small online shop.” – explains Piotr Stach. And Waldemar Moss adds: “This enabled us to convince the partners to produce a few devices for us – for starters as test products. But we promised that any subsequent order will be bigger. And we kept that promise.”

This skillful move made expondo one of the few companies to sell under its own brand name on eBay. The products offered significantly better margins than goods from unknown Chinese manufacturers and had competitive prices over strong European brands. The result was a fair average offer.

The company’s success was also determined by a low loss and return rate. The so-called failure rate was about two percent for most products. The question was how to control partners in China. And this became very urgent when it turned out that the first bed-orders of goods did not arrive in Germany at all. The business partners were duped by a dishonest supplier and lost nearly a third of their capital. From that point on, the partners began flying regularly to Asia and looking after their partners. They visited factories and spoke to production managers to learn which components affect the quality of a product. Two of the interlocutors at the time, who convinced them and whom they particularly trusted, offered leadership positions at the local exponate branches. In this way, the partners began hiring employees and establishing quality control in China as early as 2008/. In 2009. Today, 40 people work there.

Against this well-functioning backdrop, Moss and Stach decided to expand quickly – not only through new brands, but also through the opening up of new markets. “EBay works the same in all countries. So there was no reason to confine oneself to Germany. We just had to translate the descriptions and warranty services and were able to sell our products all over Europe. “–” says Waldemar Moss, who extended sales to sales platforms such as Allegro and Amazon.

And that expansion is the driving force behind the company’s development. Today, Germany’s share of sales has fallen to 35 percent. France is a big market at 17 percent, as is Poland, which is in second place after Germany at 18 percent. It is followed by Italy at seven per cent, as well as Spain and the UK with five per cent each.

expondo has been a cross-border company from the start. Relations with the former homeland are not limited to sales. Berlin has a central office, but the company grew so fast that in 2008, the equipment service opened in the Zielona Góra, 170 kilometres away, and later the group’s logistics centre. The company now even owns a film studio where videos for the products are produced.

In order to be more independent of auction sites, the company’s own website has been increasingly expanded and optimized. Meanwhile, about 60 percent of products sell through their own store. In order to increase the attractiveness of the business, expondo is no longer limited to own brands alone, but also sells products from more established competitors. However, the own brands always compete in price. In the meantime, the company’s focus has focused on high customer satisfaction and the best user experience.

“I love the Amazon Prime program, where customers not only have more convenient shopping opportunities or receive gifts and exclusive offers, but also enjoy numerous benefits.” – discusses Waldemar Moss, who extends the return period of products to 100 days Has and allows damaged items to be replaced immediately – without waiting for the repair. His idea was also the world of expondo experts with professionals advising other shoppers on the expondo products. In return, he and his team design a better website with matching imagery for his experts, or take care of SEO – services that most owners of pubs or plumbers would not have to know about and would otherwise have to pay for.

All of this is for preparation for the next big leap. This time across the Atlantic into the highly competitive American market. As usual, expondo will get in via eBay and Amazon. So no big costs are risked – and the company doesn’t even have to write the product descriptions – because that has been around since it entered the UK market.

https://www.forbes.pl/biznes/expondo-jak-piotr-stach-i-waldemar-moss-zbudowali-w-berlinie-sklep-internetowy/k107hzg