Starting a Retail Consumer Electronics Business

Interview with Founder Shai Atanelov

If you are starting a web-based business to sell products online, this is a must read. Shai Atanelov has tons of great advice to share on how he started a successful consumer electronics website with only $1,000 in startup capital.

If you visit Shai Atanelov's website, you get the impression he must be operating out of a massive distribution center and managing a staff that must surely number in the hundreds.

His company,, is in fact a home-based business.

Shai is a perfect example of how smart entrepreneurs can leverage the Internet to do some amazing things...building businesses that could not have existed previously.

Shai, tell us about your current business. What are you doing exactly?

I run a website selling unlocked GSM cell phones (can be used anywhere in the world - customer just needs to have a working sim card), digital cameras, and accessories.

We will be adding more product lines soon from other brand names. We just struck a deal with a major manufacturer that makes portable solar chargers that will charge any electronic device anywhere there is sunlight.

All the products on the site are dropshipped from leading electronics suppliers in New York, California, and Hong Kong.

All I have to do is update the products on the site once a week, adjust the pricing, and advertise. The actual product handling is done by the suppliers which I contacted one at a time and made agreements with them for dropshipping products to my customers.

I started the company in early 2007. Before that, I was a teacher/tutor so this is my first start-up business. It's a home-based business, operating out of my home in Flushing, New York.

It seems like a great business model. Where did you get the startup money?

My startup costs were actually less than $1K. Since all the items are dropshipped from my suppliers and I do not need to carry inventory, my only costs are the ones related to operating the site, advertising, and paying the virtual assistants I hire.

Wow, it's amazing you can launch such an interesting business with hardly any startup capital. So, who are your main competitors? How do you compete against them?

I have approximately 15 major competitors who operate similar sites on the internet. I try to offer my customers excellent service and very fast shipping of the products they purchase.

My site also offers free accessories with every cell phone that is purchased, as well as discounts on additional accessories. That's proved to be very attractive to our customers.

We ship worldwide, and customers get their products within 3 days no matter where they are located (we are working on trying to send items to APO, AE, and other military is not an option with FedEx or UPS.) Several of my competitors only ship to the USA and Canada.

Since I have suppliers in Hong Kong too, I am able to offer affordable shipping anywhere in the world. I also build repeat buyers by offering coupons via email newsletters. We have many repeat buyers for the new gadgets that come out every few weeks.

How has your experience in running the business been different from what you expected?

I thought my startup costs would be more, but I found reasonable virtual assistants who update the site every week, and my site designer also charges very reasonable rates. The key is to keep on searching for the best service and rates.

At first I thought I would need at least $5K to design a fully functional ecommerce site. I ended up paying only $800 for designing my site.

Is there anything you wish you had done differently?

I now use Volusion shopping cart software. Initially I was using oscommerce previously.

I wish I would have started using Volusion a long time ago. They have SEO features that have been working great for us now and would have put me further ahead of my competitors if I would have started out earlier.

Also, I wish I found earlier, as I was able to find excellent virtual assistants in the USA on the Elance site.

When I first started the business I was doing everything on my own in terms of updating the site products and dealing with customers.

That's very helpful advice to some of the folks who visit our site who are in the process of starting their own companies. What else have you done that has been very effective in helping to grow the business?

When I first realized that there is a popular market for cell phones and digital cameras online and that I did not have the capital to purchase inventory and a warehouse, I started searching for dropshippers on the internet.

That was a BIG mistake. I found that most dropshippers on the internet are not selling at the real wholesale prices. I spent months in 2006 searching for real wholesalers to dropship. There was no way I could compete with my competitors with the pricing from online dropshippers.

So I decided to play it tough and I hunted down local suppliers and built a relationship with them. I then was able to meet with even bigger suppliers and even major distributors. Even though they mainly deal with large orders of thousands of pieces, they were willing to work with me in my dropshipping needs.

Most people are afraid to approach big companies for little requests that may not seem interesting to them. I was not afraid. Several companies told me with the increase in internet sales every year, they are actually very interested in companies and websites like mine to have as customers.

Some small things that I have done to grow my business were adding a toll free number that customers can use to contact us, hiring virtual assistants, and making sure the website has all the safety features that consumers want to see, such as SSl certificates and Hacker safety logos.

What advice would you give to somebody else who wanted to start a similar business?

I advise that with any startup business whether big or small, you must be persistent and diligent.

I could have settled for online dropshippers and could have made a bit of money. But if you want to build a real business, you must search for the big players to work with you. It may seem scary at first, but you will find that most are willing to help you and themselves, even if it is just a little bit.

Never ever give up and always be very honest with suppliers and customers. Our customer service has been a major factor for our repeat customers which for us means thousands of dollars in extra sales per month.

Shai, we are so thankful that you joined us for one of our entrepreneur interviews. You've offered our readers a ton of great startup advice. Thanks so much and good luck in growing your business to the next level.

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