Justin Ligeri, president and owner of Yagoozon Inc., believes the key to entrepreneurial success is simple – take risks, learn from your mistakes, and the money will take care of itself.
“Money doesn’t motivate me; the process does,” Ligeri said. “That’s one reason I think we’re so successful.”
Headquartered in Warwick, Yagoozon is an online retailer of discount toys, costumes and novelty items. Sales are slow this time of year, but Ligeri is gearing up for what he hopes will be a $20 million fourth quarter.
“In about another month, we’ll be getting millions of dollars,” he said. “I expect to have days higher than a half a million, maybe even as high as a million in the fourth quarter.”
Between 2009 and 2012, Yagoozon’s annual revenue climbed from $111,000 to $18.6 million, a growth of 16,689 percent that landed the company 10th place in Inc. magazine’s ranking of the 5,000 fastest-growing private companies in the country. Only one other Rhode Island company placed in the list’s top 100 (Alex and Ani, at No. 94 – see Page 4 for its winning profile in the $75 million and above category).
During the peak holiday season, Yagoozon processes up to five transactions every second. Since Ligeri and his 14 employees aren’t equipped to handle such volume, Yagoozon fills its orders through Fulfillment By Amazon, an Amazon.com program that helps small businesses boost their sales.
Yagoozon ships its stocks to Amazon for storage at a fulfillment center, and for a fee, Amazon packs and ships each item, provides customer service and handles returns.
“That’s how I’m able to grow so fast, because I don’t have to worry about taking care of 2 million customers in the fourth quarter,” Ligeri said. “All I have to worry about is getting it ready for Amazon to do that for me.”
While Amazon manages shipping for Yagoozon, Ligeri is still responsible for purchases and sales. As an entrepreneur, he lives by a creed of learning through failure, finding out what works and what doesn’t through trial and error. If a product doesn’t sell, he may take a loss, but in the process he gathers data that will help guide his future purchases.
“Not everything I touch turns to gold; I’m not King Midas,” Ligeri said. “But if it doesn’t turn to gold I’m not going to touch it twice.”
Ligeri buys products based on their liquidity and long-term salability, sometimes buying up the entire stock of a product if he believes it will sell.
“I’m not worried about winning or losing,” Ligeri said. “I’m just not afraid of any risk. If I believe in something, I go for it.”
Ligeri’s friend Harald Anderson cites his intuitive knowledge of the market for a particular product as the linchpin of Yagoozon’s success.
“He sees opportunities long before even seasoned veterans,” Anderson said. “He has just uncanny instincts.”
Anderson and Ligeri met in 2007 through their work in search engine marketing, generating traffic and publicity for clients on Yahoo! and Google. In 2009, Ligeri left that career to launch Winning Costumes LLC, an online costume retailer, but the company failed within the year.
In November 2010, Ligeri was left with a few boxes of unsold Wonder Woman costumes, a negative bank balance and $50 he had borrowed from his father.
“You get to a point where you’re grateful for whatever you have,” Ligeri said. “I knew I wasn’t going to waste it like I did in the past with businesses. I said, ‘I’m going to do something with this $50.’ ”
He tried selling the Wonder Woman costumes on eBay, and when that didn’t work, he sent them to Amazon. Within 48 hours, all 18 costumes had sold. Anyone else might have been satisfied with making a few bucks, but for Ligeri, it was a moment of revelation. He decided to reopen his online costume store, this time as a storefront on Amazon.com.
“He sees potential that other people don’t see,” Anderson said. “He definitely breaks the mold with regard to what he thinks is possible.”
When Ligeri needed a name for the relaunch of his online storefront, it was Anderson who suggested paying homage to the three Internet titans that kick-started Ligeri’s career – Yahoo, Google and Amazon.
In the first two weeks, Yagoozon made only $220 in profits, and Ligeri questioned whether he’d made the right decision. Instead of pulling out, he decided to give Yagoozon the chance to succeed. In the following two weeks, his profits doubled to $500, and he knew then that if he reinvested his earnings, his revenue would continue to climb.
“Within a year and a half, that weekly revenue that started at $100 and then $250 was [more than] $1 million,” Ligeri said.
Since those early days, Yagoozon has overcome unfavorable economic odds and financial setbacks to claim the coveted Inc. ranking of fastest-growing retail business in the country – and it’s still growing. Over the two-week period from Aug. 9 to Aug. 23, the online retailer drew $103,000 more in revenue than in the same two-week period last year.
For Ligeri, Yagoozon’s success has often meant longer and more stressful days.
“He’s the kind of guy who will work seven days a week for 20 hours a day during his busy times,” Anderson said. “I’ve never seen anybody who deserves his success more.”
Going forward, Ligeri hopes to scale back his involvement at Yagoozon to pursue other business ventures, including a training program to teach the Amazon entrepreneur business in collaboration with Anderson and a line of organic vegan smoothies that he hopes to launch nationally in 2014. •
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.