Pharmapacks co-founder Andrew Vagenas knows a thing or two about risk. The Bronx, New York-based entrepreneur took a leap on e-commerce only five years ago--while industry stalwarts Amazon and eBay long had a presence online. Fortunately, he's also familiar with reward. Thanks to a clutch addition to his team, the health and beauty products retailer now has Walmart knocking at its door. Plus, the company landed at No. 115 on the 2015 Inc. 5000, with $32 million in 2014 revenue and a three-year revenue growth rate of 3,035 percent.
--As told to Anna Hensel.
In 2010, one of my partners and I owned a retail pharmacy in the Bronx. We were a pretty successful mom-and-pop shop, until one day everything changed: We thought we'd try selling our products online. We had access to merchandise, and I just wanted to see how well we could do. Our test went pretty well, so I reached out to family and friends--raising $750,000. I bought a little warehouse in New York City. It took us about a year and a half to build out our website, get all the programs set up.
The first two years we were not profitable--we were losing a lot of money and trying to figure out the game. Two years ago, I met a man named Jonathan Webb, and he had a similar type of company. But he was also in digital media and graphic design, and had connections to some distributors as well. So we joined forces and combined our two companies, and that really took Pharmapacks to the next level.
The way we grew and what makes us different from everybody else is our technology. We built all of our own software and processes; we have all of our own algorithms. Most companies, what they do is they just open up their own websites and they try to grow just that. Sure, we started with selling on our website. But we also said, let's take on Amazon; let's see what we can do there. We did the same thing with eBay.
Anyone can sell on Amazon or eBay, but it takes a while to become a trusted seller. It took us about two to three years. Now we have a very high seller rating, with more than 200,000 reviews. We're now one of the top health and beauty products sellers on Amazon in the U.S., so we've gained the company's trust. We've been invited to conferences for Amazon's top sellers a few times, and we're setting up to sell our products on Amazon Prime in the fall for a trial run. Walmart reached out to us in the beginning of 2015 about selling on its website, and Jet.com recently reached out to us too. As we've grown, we've proven ourselves again and again.
My advice to sellers trying to build a reputation online is to tackle one project at a time, and master it, before you move on to the next. If you do that, your reputation will naturally build. If you try to do too many things at once, and aren't the master of any of them, that's when you'll fall behind.