When Isy Galey worked out that she had changed close to 25,000 nappies over a 22-year nanny career, she realised it was time for a change.
She changed tack and launched in.cube8r in 2007, a Melbourne-based store that sells handcrafted items made by Australian artists.
It’s a retailer with a twist – the artists keep all of the revenue while Galey takes a rental fee from each to stake out a space within her store. She has since franchised the concept interstate.
She speaks to StartupSmart about how she is riding the handmade wave.
What inspired you to start Incub8er?
I’d been a nanny for 22 years and the nature of childcare is that when the last one goes to school, that’s it; you’re out of a job.
I’d had the idea for in.cube8r for some time, but I was too scared to do anything about it. It was always the wrong time, or I was in the wrong relationship or didn’t have enough money.
Eventually I enrolled with the New Enterprise Incentive Scheme and they helped formulate a business plan for me. Previously, the idea was just pixie fluff but I made it into an actual business. Five years on, I’ve franchised it.
I’d always been into crafty things. I initially did glassblowing, but it costs you $350 for a studio and $150 for an assistant so on, so if you get commissions you are often out of pocket.
I came to Melbourne in 1996 and saw how Myer rented out their space to different brands. I thought I could do the same model but on a much smaller scale and for artists.
How were those first steps?
I pretty much made it all up as I went along. Initially, the idea was to have a space full just of glass cubicles where people could sell their things.
But then much larger pieces came in, along with photographers and dressmakers, so I realised that I needed a much larger space. There are now 4,500 different products by 92 different artists representing all aspects of handmade.
I had the business plan that NEIS helped me with, so I went out to do some market research as to whether this concept was something people wanted.
I went to university lectures and asked if the students would be interested in the idea. About 99.9% said yes. As soon as all those hands went up, I knew that there was a niche market I could set up in.
It’s all about taking the pain away from the people you deal with. From a young artist’s point of view, they don’t have to trawl around all the markets to sell their products; it’s all in one place. We now have a waiting list for the artists.
What do you charge artists for their spaces?
It starts at $21 a week, whereas a whole wall is $90 a week. The prices are staggered in $5 increments. We have shelves, open walls and glass cubicles to rent.
What were the start-up costs for you?
About $55,000. I was lucky in a way because a private philanthropist came on board – I’ve since paid them back.
How did you initially market the business?
At the beginning, it was just me and I would tell anyone who would listen about the idea, even at the supermarket checkout.
I managed to fill the space within seven weeks and was able to pay myself a small wage. I focused on pop culture magazines, the website and in-flight magazines on Virgin and Tiger.
Sometimes, customers would come into the store with the articles folded up in their pockets, which gave me a good idea of how they’d found out about us.
What’s your proposition?
That we have products that are 100% made in Australia – nothing says “designed in Australia”.
Another selling point is that 100% of the products’ price goes into the artists’ pockets. These products are made by hand with love and people like to support that.
What have been the greatest hurdles you’ve faced?
Glass half-empty kind of people: People who didn’t believe that I could do it; people who said that the glass in my shop would be smashed.
Even now, people say they are surprised that it has worked.
The trend for handmade objects is in your favour, isn’t it?
Yes, Craft is the new black.
Handmade objects over the past three or four years have become massive. People like the authenticity involved in a handmade product.
Do you see the internet as a threat or opportunity?
I read about a guy who started charging people to try on Doc Martens because he was upset that people would try them on in his shop and then buy them online.
We are the complete opposite. We encourage customers to find our artists online and buy from them there.
I personally like to touch stuff and try it on and I’ve seen a stat that 65% of shoes that are sold online are sent back. People like to feel and touch, but I’m not worried or threatened by online at all.
Some people have called us a walk-in version of Etsy, which is about right.
How has the franchising process been?
The concept was reasonably easy to copy and I had written the software that enabled us to franchise.
I initially resisted the idea of franchising, but it was the only way we would grow the business. I saw other pop-up businesses and I was worried that if others came in with a bigger budget they’d grow quicker than us. We had to get there first.
We have Brisbane and Geelong and had a franchise in Sydney until it was sold because of personal reasons.
Every fortnight we have a franchisee call where we run through various issues. They’ve needed a lot of one-on-one mentoring, which has been tricky.
I thought I had everything in the manual, but I learned that there are lots of things you can’t cover in a manual.
What are your goals?
Within the next few years, it would be great to have one or two stores in every state and a couple in New Zealand.
I don’t want us to be a large international brand though, I want to keep it to the grassroots.