Ecommerce gets added Velocity via Bar Hill
Velocity Commerce began life in a Cottenham garage seven years ago and is now one of the fastest-growing companies in Europe in the FT 1000 report, one of just 27 UK companies to have made it to the top 100.
In December, the company was also ranked 11th in the Sunday Times Virgin Atlantic Fast Track 100 2018 league table, which identifies Britain’s fastest-growing companies over the last three years.
With an office in Histon and a warehouse in Bar Hill, the two founders, Eddie Latham and PJ Scott, have created a success story from a standing start. Annual turnover this year is expected to top £30million, with 2,000 orders despatched every day. But it all started very modestly: they both worked at play.com, and became friends.
“We wanted to try something a bit different,” says Eddie of the company’s original product, Belkin backpacks. “Initially we bought clearance stock. Our vision was to buy something no longer being made, so we bought 3,000, the whole stock – so no one could undercut us on price.”
The Belkin purchase involved some personal sacrifice – for 18 months the duo retained their full-time jobs.
“The business started with £3,000 of our wages,” says Eddie, who went to Chesterton School and acquired an economics degree from Swansea.
It was even more intense for PJ, originally from Crawley, whose e-commerce expertise landed his a job at online retailer play.com.
“I was living in a two-bed terraced house in Cottenham at the time,” he says, “which held all the stock – we squeezed 10 rucksacks into one box and then stored it all in the living room, in the shed, in the loft. It was exciting.”
“We then reinvested from that into other stock,” continues Eddie. “It was a buzz watching the pile of stock getting bigger. That was in 2013. By December turnover had reached £100,000.”
After utilising PJ's house, then Eddie's garage, came the first move - to a warehouse in Nuffield Road, which led to a move to Milton before finding the Bar Hill premises: opening the Histon office is another part of the ongoing expansion of Velocity Commerce.
The FT 1000 team – a Financial Times crew working with statistics portal Statista – assesses European companies that achieved the highest compound annual growth rate in revenue between 2014 and 2017. Velocity’s 1,187 per cent absolute growth rate over the period 2014 to 2017 included a bit of diversification.
“Half of our business is audio products which we design and manufacture in the Far East,” says Eddie. “We started our own brand four years ago. Until then our sales were other people’s brands, but we saw a gap in multiple home audio sectors. What we do is direct-to-consumer which strips out a lot of the layers that are traditionally retail, to a direct relationship with the customer. So we saw an opportunity for a brand in home audio, and thought it would be good to do something that’s a bit more long-term.”
The “more premium” brand is Majority.
“Majority now has 40 products which include radios and sound bars,” Eddie continues. “We don’t do much advertising, it’s a consumer-driven brand, sold at very good prices.”
“The products have had 100,000 reviews, it’s been very well received.”
“Majority now has one million customers.”
The radio range is named after Cambridge villages and colleges, so you can get a King’s digital & internet radio music system, a Peterhouse internet radio, a Little Shelford portable Bluetooth digital radio, or a Fulbourn II Bluetooth digital radio & alarm clock. If you want to get really clever you can acquire a Newton Alexa-enabled digital radio.
Around 75 per cent of Velocity customers are UK-based, so there’s still room for growth.
“Going international is a big one for us,” says Eddie, though the market is there for Majority, with Germany already a big online consumer. But Velocity’s ability to diversify isn’t confined to online sales of digital audio products. Its savvy in digital marketing is being put to use for other organisations.
“We provide an agency service for brands,” says PJ. “Our skill set is optimising listings on eBay and Amazon, so we can optimise their service. The brand signs up with us, we have access to their Amazon account, we change and adjust the variables – the content, the prices, whatever’s needed. So if someone types into a search engine ‘laptop case’, then we want to be top of that list.”
It’s working. A new partnership with Tile, “the world’s leading smart location company”, sees Velocity supporting Tile with the management of peak sales periods through logistics and order fulfilment, alongside “optimising Tile’s listings on eBay through strategic use of in-channel marketing tools”.
“To fulfil the high volume of orders Tile receives in its peak periods, a large amount of logistical planning needs to take place, and the right staff arrangements need to be implemented,” says Eddie.
“That’s where we come in. Our team acts as an extra helping hand, supporting the brand with everything from warehousing and distribution to returns and customer service.
“On top of this, we are raising awareness of Tile by ensuring all listings on eBay are easy to find, well promoted, and feature high-quality, informative content – so when the peaks do come round, Tile really soars.”
Peter Groom, sales director EMEA at Tile, said: “With the help of Velocity Commerce we know that not only are our products being effectively marketed for the occasion, but can be confident that the influx of additional orders will be well-managed, with minimal impact on the day to day of our business.
“The team at Velocity Commerce have a great relationship and experience with eBay, and it’s great to be able to tap into this.”
Making use of their experience to help brands build a strong online presence and increase revenue through online marketplaces may have started off as a sideline of the main business, but the market looks at the success of this online retail specialist and says: ‘Yes we’ll have some of that’.
“This month we signed a deal with Lego and Hasbro,” notes PJ. “The aim is to help forecast their stock for Christmas. Of course Amazon is our biggest customer, but eBay helps as well. It’s the second largest online retailer and a lot of brands don’t appreciate that they could increase their sales that way.”
There’s 15 people currently working at Velocity in Bar Hill, and 15 in Histon. As I’m shown round the warehouse by Eddie, it’s the attention to detail that is most apparent. There’s a corner where stock is repaired and sent back for sale on eBay.
“It’s a means of being more efficient and means that none of it goes into landfill, it all gets repaired,” says Eddie, pointing to stock from brands such as Sony. “Every day from this warehouse around 700 orders are posted, with another 2,000 orders daily sent from fulfilment centres around the world.”
Now is a quiet time in the world of online sales. It will get busier in the next few months, and Velocity will adapt – by ensuring that last orders are sent out at 9pm.
“Half of our orders are coming in from people after 6pm,” says PJ. “So they can order at 8pm and the last collection from here is 9pm, so they get their order the following morning. Around 45 per cent of our annual sales take place in the Christmas window, from the week before Black Monday to after Christmas.”
Any worries about Brexit?
“We’ll let you know how we get on!” says PJ. “For us, we’re a very agile company, we’ll react at the time.”
How do they think it’ll go?
“I don’t know, hasn’t Boris Johnson just hired Mystic Meg? At this time of year for us it’s about preparing for Christmas, it’s the biggest time of the year for deliveries, so there’s big pressure on the warehouse. And as the business gets bigger and more boxes need shifting, so we have to stay ahead of the game. And we’re ready for it.”