Greg Selkoe founded Karmaloop in his parent’s basement in 2000. His idea was simple, make it easy to find fashionable “streetwear.” Now, with revenues in excess of $100 million per year, Karmaloop is a leading e-commerce site for the trendy elite.
We got to interview Greg and below are some telling details about his business..
How did the idea of KarmaLoop come about?
Karmaloop stemmed from my passion for street wear, art, music, and the verge culture. The initial genesis of Karmaloop stemmed from the idea of Alex Haney and myself who had an electronic music magazine called Decontrol when zines were first coming out in 1998, There were all these cool up and coming clothing brands and I saw all the heroes of the culture wearing them. When I would called them up to get them place ads, I was shocked to learn they didn’t have any money. The reason they were visible is that the heroes of the culture were in NY and LA and they shopped at these one or two boutiques. I learned two things one, it was difficult to make money from a magazine and two there was a real business opportunity with these brands that had universal recognition across the country. The problem was, you couldn’t buy them unless you lived in a big city or were willing the travel miles to obtain the fashion you wanted. So the idea of creating a website to sell clothing was born.
We set out to partner up to create a retail website and consulted a friend to do the initial web design for the site. He had a degree in sacred geometry which is the study of Celtic symbols; in fact he was also stained glass artist. When he designed the first site it looked like a stained glass window with the Buddhist symbol for karma. Initially I only had four brands signed on and the initial design had four spaces that looped. It was coincidently the symbol for karma so that’s how the name was born, from the design of the first website. At the same time, companies like Yahoo! were starting up and I felt it was better to create an alluring name rather that give it a basic name that when searched for, lots of options would come up for consumers.
How did you launch the company?
The first warehouse was in my parent’s basement and I was the only person that put money into it. I was repeatedly told “there’s no way this thing is gonna work.” To impress the labels I liked, whose specialty lines I wanted to sell—particularly in the case of major players like Puma, Reebok, and Adidas—I focused on small but intense brand representation. The Internet wasn’t the newest, craziest thing so I developed a new paradigm. I said, ‘Look, we’re not going to be your biggest customer right now, but we’re going to represent your brand better than anyone else, we’re going to represent your brand online, and yeah, we might not sell that much at first, but we’re going to basically be a free online magazine ad for your clothes.” The thinking at the time was to not include content in an e-commerce site because it would take away from the shopping experience, but we did the exact opposite. We rolled out contests, interviews with designers, blog like written content on the brands, and shot product on models that evoked the brand image. That’s how KarmaloopTV evolved. The corporate sneakerheads bought it, although revenue was, unsurprisingly, slow in coming at first. There’d be three or four orders a day, and I would package them up and drop them off in the mail on my way to work or school. It was sometimes a mystery to me how people even found the site
What are your sales today?
We had an estimated 2011 revenue number of $130 million – up 81% from its 2010 revenues of $72 million. This is the 11th straight year of double-digit percentage growth. We’re thrilled to report another record year for Karmaloop. We work hard to give our customers the brands and styles they want to buy, as well as the relevant and dynamic online video content that they demand. We remain as connected as ever to our audience through multiple channels and platforms, especially via social media. This close relationship allows us to be responsive to, as well as greatly influenced by, our customers. Karmaloop is more than just a retailer; it is a community of style, a media property, and the epicentre of Verge Culture. With all the amazing content on Karmaloop TV, our great Men’s and Women’s blogs, our exclusives and contests, and many other initiatives we go the extra mile to connect. And it continues to pay off. We are projecting 60% growth in 2012, as well as the launch of several new projects and sites.
Do you think the hipster market is big enough, or will you branch into other markets?
Everything goes in cycles: if jeans are really tight, you can be sure they’ll be really baggy next. Being in the industry now for 12 years I see how these things go, but the reality is our audience wants different types of clothing. They want to mix and match; they want a variety of looks. We don’t consider ourselves necessarily a streetwear site even though we have the largest selection of streetwear, because we don’t want to be pigeonholed. Things evolve and if that term goes away, were still here. It’s a certain mindset; it’s a certain cultural group. Before there was the word “streetwear” this group existed and they’ll exist afterwards. Even before, in the 80s, the 70s, the 60s, if you were a Beatnik in the 60s or whatever the fuck you were, there’s always been a certain subculture that is more creative, cares about how they dress, and so it’s like, we’re just a continuum of all this throughout history. As styles change we want to be up on it and plus we want to put people onto stuff that we think is cool so we find a lot of brands that are small. Obviously that’s the case with Kazbah — which is like all up and coming, really small brands. We’re kind of about that. If you look at some of the parties we have and certain acts we book, we seamlessly blend, indie rock, hip-hop, house music, techno, electro, dubstep, whatever. Our musical taste and our fashion taste is very eclectic and we don’t wanna be defined by anything. We just thought some of that stuff was cool and would sell.
What’s next for Karmaloop over the next 12 months?
Karmaloop is inherently creative as a fashion retail company. The business model allows for endless expansion: Karmaloop is a lifestyle site as well as an online retailer. A leader in the industry, Karmaloop carries over 500 brands and 11 private labels, and is also the place to find up-and-coming art, music, and original content. To reach customers with lower price-points, Karmaloop created PLNDR, an off-price flash sale site. Karmaloop recently launched Brick Harbor, a dedicated skate site and the ladies only site MissKL is slated to launch in July. Karmaloop has created its own blog, look books, and sponsors and hosts countless cultural events across the US. There are so many facets to the company that its capacity for creativity and innovation is truly limitless. We recently expanded into Europe, with our recent acquisition of Denmark’s Street Ammo, and are about to venture into the Asian Market through our partnership with the Chinese site Xiu.com. We plan to continue our international expansion and grow our private labels in the retail sector. Big things are coming for Karmaloop’s media arm, with Karmaloop TV, launched in 2008, now working its way towards an Internet Protocol (IP). KTV has worldwide influence and is claiming 2012 as its year of original content and development.
What advice do you have for aspiring e-commerce / fashion entrepreneurs?
Find and approach the person you want—even if it’s a very successful business person. Some of these people speak at conferences, which is a great opportunity for approaching them. The fact is that even if they’re very busy some of these people are accomplished because they want to continue growing, learning and helping others. But be realistic: There’s a good chance they’ll say no. In that case…Ask again. You might not get an immediate response. If you reach out on LinkedIn, for example, it might take a few messages before a busy CEO volleys back. Be persistent. And don’t get discouraged. Entrepreneurs need to be good at asking for all kinds of things, including help, money, and advice. They do this over and over again. Get used to it.