How Cupshe Beats Big-Box Stores and Generates $3 Million a Month in Sales

How Cupshe Beats Big-Box Stores and Generates $3 Million a Month in Sales

Ever wondered if your bed pillow hates you?

It’s a feeling Mike Zhao knows well and remembers experiencing the night he launched his first ecommerce store.

“I couldn’t sleep no matter how hard I tried,” Zhao recalls.

Zhao was worried and almost out of money.

Itching to see whether he might be able to launch a business, Zhao, a Chinese entrepreneur with no technical expertise bought a domain, connected it with a Shopify account, and was using what little money he had to drive visitors to the site.

“I only had four products, and I uploaded them myself,” he says.

Exhausted and afraid of failing, Zhao wanted to call it quits for the night and decided to go to bed but couldn’t fall asleep.

Ten minutes later…

Zhao found himself back in front of his computer when suddenly something magical happened right there in front of his eyes.

“I still remember it today,” Zhao says with a supercharged laugh. “It was amazing because it was the first order I had ever received in my life.”

Zhao was in business.

But almost immediately after that very first order, a dress purchased by a young lady in the United States, Zhao’s euphoria quickly morphed into terror.

“I had no idea how to ship something to the United States,” Zhao, who lives in China, says.

Remember, Zhao had spent most of his money on PPC ads.

But after scraping together everything he could, Zhao purchased the cheapest printer on the shelf, printed out his very first shipping label, and tossed the package in the mail.

“It had to have been the slowest printer on the planet,” Zhao says with a chuckle.

It may be humorous now.

But that slow poke printer nearly cost Zhao what would ultimately become a multimillion dollar fashion juggernaut.

It Tastes Stale

You may not be able to see it.

But Zhao says he views women’s fashion on the racks at big box retailers as stale and outdated.

Tastes and trends can change instantly.

And Zhao says the big box stores simply can’t respond quick enough to capitalize on what can be fleeting yet profitable fashion trends. “They sell everything and can’t afford to focus on just women’s fashion,” Zhao says.

It’s why Zhao launched Cupshe, a self-described leader in what he says is known as the quick fashion industry providing the trendiest women’s fashions at factory direct prices. “Speed is what differentiates us,” Zhao says. “Unlike the big box stores we are focused on only one thing; identifying and rapidly bringing to market the most popular trends in women’s fashion.”

Today, Zhao says his team uploads ten new fashions a day.

If an item isn’t immediately popular, it is taken down and replaced by something that might be in a matter of days. “Our edge is our quickness,” Zhao says. “If an item is popular we’ll keep it online and let it sell. If it’s not, we’ll kill it quickly and try again.”

The results?

Just twenty days after selling his very first dress Zhao says he had to replace that inexpensive printer with one that could keep up with demand and make the labels necessary to ship hundreds of orders per day.

“It was nothing short of amazing,” Zhao says of the breakneck growth.

Keep in mind Zhao lacks a technical background, can’t code and had never started or operated a business before. However, just a month after launching his store on Shopify in March of 2015 Zhao’s sense of fashion combined with his PPC ad prowess resulted in accelerated revenue growth:

  • $1,000 per day after one month
  • $3,000 per day after two months
  • $10,000 per day after three months

Impressive for sure.

But Zhao, who eventually partnered with a professional shipping company and grew Cupshe to one-hundred employees, wasn’t satisfied with the revenue numbers or the speed at which the company was moving.

“We needed to get even faster,” Zhao says.

Especially if he planned to adjust Cupshe’s offerings based on advice he’d received from a random Uber driver.

No Technical Barriers

Beach-loving women ages 13-45 in places like California and Miami couldn’t get enough of Cupshe, its cash cow swimwear, and its rapid-fire product uploads.

On the surface, it seemed like an overnight success actually worthy of the label.

That is until Zhao, on a trip to the U.S., realized something was amiss during a ride in an Uber car. “I asked the driver if she had heard of Cupshe and she had,” Zhao says. “I told her who I was, asked for suggestions, and she told me I should start paying attention to African American women and offering styles that would appeal to them.”

It was valuable insight that required a quick adjustment to Cupshe’s product line and came right around the same time the folks at Shopify noticed Cupshe’s turbocharged growth. If Zhao were to keep up with demand and move lightning fast as he desired, he’d need a platform that could scale on demand and grow right alongside Cupshe.

It’s why Zhao upgraded to Shopify Plus, an enterprise-level ecommerce solution for high volume merchants, just a couple of months after launching Cupshe.

I love Shopify Plus because it makes my life so much easier. I can adjust quickly and move as fast as I want because I know I can trust Shopify’s platform to keep up.

Zhao credits several third party applications that easily integrate with Plus for saving him time he can then devote to identifying new fashion trends and catering to new audiences:

  • Zopim- an application that allows his customer service team to chat live with customers
  • Zendesk- a customer service application that improves customer satisfaction through better customer conversations

The focus on customer satisfaction is evident when you consider Cupshe’s conversion rate is more than double the industry average. “We think we can do even better,” Zhao says. “Our fashions are trend setters, we drive highly targeted traffic, and we know Shopify plays a big role in our conversion rate because there are no technical barriers to checking out.”

Since upgrading to Plus Cupshe has continued its torrid revenue growth:

  • $3 million in September
  • $150,000 per day after 18-months
I can’t tell you how instrumental Shopify has been, especially my merchant success manager Paul Vomberg. He anticipates problems and proactively offers solutions. It’s like he’s a member of the team at Cupshe.

Promo + Amnesia = Disaster

Since swimwear and dresses don’t sell as well in the winter…

Zhao is now narrowly focused on identifying the trends most likely to catch fire this fall. However, a fall line brings unique challenges:

  • Sweaters and hoodies have longer lead times
  • They’re heavier which means they cost more to ship
  • They require more material than swimwear which can crimp margins

To combat part of the problem, Zhao recently opened a warehouse in the United States. It means customers in the U.S. and Canada who’d ordinarily wait up to twenty days for items they purchased will now likely receive them in a week or less.

Expect Cupshe to double down on customer service.

“Looking back we move so quickly and have grown so fast we’ve made a lot of mistakes,” Zhao acknowledges.

The big one that comes to mind?

Zhao says Cupshe recently ran a promotion that was met with so much enthusiasm the company quickly ran out of the item. “But we forgot to turn off the promo and customers kept ordering,” Zhao says with a pained voice. “We want Cupshe to be around for a long time so instead of focusing solely on sales volume I’m now looking at customer satisfaction which will undoubtedly lead to higher customer lifetime values.”

The idea, Zhao says, is to get a bit better every day.

It means, much like the first day of Cupshe’s existence, Zhao isn’t expecting to make nice with his bed pillow.

“Oh I still can’t sleep thousands of orders later,” he says. “Maybe one day but right now there’s too much to do.”

About the Author

Nick Winkler is a contributor to the Shopify Plus blog and founder of The Winkler Group, a strategic communications firm that provides content marketing services to the world's best-known brands, businesses, and marketers. Get more from Nick here.