Ugly Christmas Sweaters and eCommerce Success

If you’re a Shark Tank enthusiast (or lover of Ugly Christmas Sweater Parties), this story may sound familiar. In December of 2013, the founders of Tipsy Elves, Evan Mendelsohn and Nick Morton, made their national television debut and pitched a tacky Christmas sweater business to the Sharks. 2013 sales prior to that appearance were $750,000. The company received a $100,000 investment from Robert Herjavec in exchange for 10% equity, and Herjavec describes the transaction as his best Shark Tank investment to date. Earlier this year, Tipsy Elves projected to hit $6 million in sales before the close of 2014. 

RECIPE FOR ECOMMERCE SUCCESS

At first glance, the success of Tipsy Elves seems to be purely based on a funny idea or dumb luck, but online stores can be a dangerous business. It’s difficult to sustain interest in novelties, and ecommerce success is difficult to obtain. 

Understanding eCommerce: Common Misconceptions

• Running an online store is easy.
• I won’t need to employ any staff.
• The overhead for an online store is super low.
• I won’t need to spend much to promote an online business. People will just find it.

The truth is that online stores require active management, and the SEO game (increasing website visibility) can be expensive.

Capitalizing on Opportunities

The founders of Tipsy Elves understood ecommerce challenges and made strategic decisions to gain a competitive advantage over other online retailers. Mendelsohn, who has a background in SEO, noticed an extremely high search volume for Christmas sweaters. Once the SEO opportunity was identified, the partners developed a unique product in order to differentiate their business from the competition. 

Can a seasonal business based on novelty products sustain this kind of success? The jury is still out on that one, but feel free to comment below with your thoughts and/or favorite ugly sweater designs.