Hello!Lucky's UK office is not just surviving but thriving thanks to Business Manager Sarah Payne. We share some history on how Hello!Lucky opened its UK office back in 2005, and the challenges and opportunities it faces today, from high demand for our quirky products to exchange rates, VAT, and shipping costs.
In the stationery world, Hello!Lucky is one of the only companies we know of that has successfully set up operations overseas. How did we do it?
Creativity and commitment. First, creativity: an entrepreneurial friend moved to London and offered to set up operations in her flat. She converted her guest bedroom into a "warehouse" using Ikea shelving. She didn't demand a salary or rent since her husband worked in finance; plus, she was thrilled to be gaining experience in starting up a company overseas. Then, commitment: she went door-to-door to small shops hawking samples out of a roller bag. She found an accountant and labored through the year-long process of registering our company and opening a bank account (a remarkably byzantine yet laudably secure process).
After three years, we were selling to Liberty of London and Selfridges and many other leading boutiques. After about five years, we had enough revenue to start paying an employee and, occasionally, sending a little cash back to the US office (woot!). Today, UK office is still just covering its costs, but we see our presence in the Europe as a crucial investment to continuing to grow our brand internationally.
Success and growth has come at a price. Before exiting the custom wedding invitation business in 2013, our UK revenue was high enough (over £82,000) that we had to register for and charge VAT, an administrative headache for a small business that, at 20%, also made the price point of our already-high-end products even higher. Last year, we were able to deregister for VAT, which has brought our costs and customer prices down. But, VAT looms on the horizon as a potential threat to our competitiveness as our exports grow. Increasing the VAT registration threshold is something that small businesses should advocate for in future EU trade agreements.
Since 2013, our UK office has been run by Sarah Payne, our UK Business Manager and a passionate advocate for the Hello!Lucky brand. We asked her to share her insight into opportunities and challenges faced by Hello!Lucky's UK and EU business today.
ST: What do you do for Hello!Lucky in the UK and EU?
SP: I liaise with customers, collate, process and dispatch purchase orders. I control our stock of greeting cards including producing purchase orders. I also maintain our company accounts, raising invoices, paying invoices and keeping appropriate records. The last part of my role is about publicity - ensuring our customers are aware of new designs and producing and sending out line sheets with any offers we may have.
ST: What type of customers buy Hello!Lucky cards in the UK and EU?
SP: Our customers cover quite a broad spectrum. In the UK we have one major customer who is a large national bookshop with stores throughout the country. We also have a number of 'lifestyle' shops and other smaller retailers such as bookshops, florists and the like in addition to independent greeting card shops. In Europe again, we sell to a variety of independent shops such as bookshops, lifestyle shops and greeting card shops. In addition we sell directly to the public who contact us because they've seen our cards and wish to buy them but don't have a local retailer.
ST: Why do UK and EU buyers want Hello!Lucky cards?
SP: Our buyers like our cards as they appreciate the quality of our cards and the fact that our designs are very different to other manufacturers. The quirky nature of the designs is something that is often commented upon. Our range does offer something for everyone though with cards to suit different tastes.
ST: What are the biggest barriers you face selling Hello!Lucky cards in the UK and EU?
SP: For us, price is a big issue. Our cards are hand printed on an antique press but this comes at a premium price. Some of our stores have set margins for the stock that they sell and with the cost of the cards, the high costs of the shipping, the high exchange rate at present and then our overheads in the UK, it can make our cards seem expensive compared with our competitors. We have recently been able to deregister from VAT which has reduced our administrative overheads and benefitted some of our smaller customers and public who have bought direct. In the EU, again, price has been a issue as it's expensive to ship to Europe. Publicity is also a challenge to get to new markets.
ST: If these barriers were removed, what do I think the impact would be on Hello!Lucky?
SP: We recently sent out a sales sheet for some cards and the response from our customers was excellent. I therefore think that if there were more flexibility around price that would help increase our turnover and, possibly, necessitate additional help in the form of another employee at some point.
Sarah's insights point to the love customers in the EU and UK have for unique, beautifully made products -- a call to small makers of all stripes to think proactively about their export future. Her experiences also point to the challenges that we collectively face as small business makers; high shipping costs, administrative burdens of taxes and duties, exchange rate fluctuations, as well as marketing costs which are increasingly (we hope) being reduced by social media and global online marketplaces like Etsy. Let's keep bringing those barriers down, and #Sharetrade!