A few years ago, Olga Vidisheva returned from her Paris vacation with a new pair of chic shoes, and Googled the small boutique where she bought them. Much to her disappointment, nothing came up. She was a second-year Harvard Business School student at the time and decided to do a bit of research. In 2010, didn't just about every business have an online presence?
Well, no. She interviewed several hundred small-boutique owners in the U.S. and discovered a shocking lack of internet savvy. And that bit of market intelligence led to the idea for Shoptiques, an online marketplace where more than 1,500 boutiques now sell merchandise that shoppers can't find elsewhere online. The company has grown from just $300,000 in revenue in 2013 to approximately $3 million last year, and is on track for $20 million this year, says Vidisheva.
Vidisheva, who was born in Kyrgyzstan and came to the U.S. as a teenager, was the first nontechnical, sole founder to be accepted into Y Combinator in 2012. And while her company has grown significantly since then, she remains selective about the shops she features on Shoptiques. "It has to be a cute store, physically," she says, "the quality has to be fantastic for the price, and the merchandise has to be unique. We reject over 80 percent of stores that apply."
Stores must carry a full line of sizes, pledge to ship orders within 24 hours, and sign exclusive agreements stating that they won't sell elsewhere online with the exception of their own websites. Vidisheva says that 90 percent of the company's boutique partners now use the Shoptiques platform exclusively for their e-commerce needs, often redirecting shoppers from their own sites to Shoptiques, which takes a cut of the final tab. Vidisheva won't reveal details, but says the percentage varies according to sales volume, who photographs the clothing, and if the boutique links its shopping cart directly to Shoptiques.
So what's the appeal for shop owners? Yes, they get exposure to a much larger customer base, but the real value of Shoptiques lies in its technology, which Vidisheva says was the toughest element of her business model to get right. "It took a long time for us to figure it out," she says. Shoptiques must integrate its own technology with inventory streams from every store. The company also photographs 80 percent of the merchandise on the site. "We have models, stylists, and photographers who have been working with us for three years," says Vidisheva. "We shoot over 800 new SKUs a week."
Scaling that technology, says Vidisheva, enabled her to grow Shoptiques by more than 700 percent last year. She now offers boutiques more than just a place to sell merchandise online, however. Shoptiques provides web hosting, inventory management, and email marketing. Robin Boesch, owner of Y&I clothing boutique in San Francisco and Dallas, has been on the Shoptiques platform since the company's early days. Originally, she used Shoptiques in addition to her own website, but now uses Shoptiques exclusively.
"We're seeing at least 10 times the orders we had on our own website," says Boesch. "And profitability is even greater than that, since we have none of the costs of running our own site. We were paying our own photographers and models. Now we send all our product to Shoptiques and they do a shoot every three to four weeks."
Vidisheva, who has raised approximately $2 million in outside capital, says she's now ready to expand Shoptiques to a more international market. Maybe she'll even sign on that tiny boutique in Paris. She's not in any hurry, though. "First," she says, "we wanted to own the U.S."