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A Guide to Creating Scalable Business Models (2024)

by California Digital News

When starting an ecommerce company, diving headfirst into business isn’t enough. It requires a blend of innovation, insight, and the right opportunities. For Razvan Romanescu, transitioning from studying geophysics to starting his own business was more than a career shift. On Shopify Masters, Razvan details this journey and his strategy for launching and scaling new product businesses within the beauty space. 

Razvan began growing communities online using platforms like Twitter and Facebook. Once he was able to generate enough money from ad sales, he dropped out of college to pursue digital marketing full time. He began experimenting with dropshipping and in 2018 founded his direct-to-consumer business, Underlining—a holding company that launches niche beauty brands based on luxury trends. 

Brands founded through Underlining include Tatbrow, Hide Cosmetics, and Nailboo—merging the latest beauty styles with do-it-yourself (DIY) tools so customers can pamper themselves at home. Ahead, Razvan shares his essential steps for launching any new business.


1. Do market research

In order to launch a business that has growth potential, you’ll need to understand your competitors. Razvan recommends Googling other brands in your category, seeing what news articles come up, and looking at their social media pages. Pay attention and read what users are commenting on and how they’re interacting with different posts. Getting an idea of the market you’re entering will help you better develop your own marketing strategy so you can stand out from your competitors.

2. Select a hero product with content creation capabilities 

“We socially engineer the marketing story and pick our hero product and then build the brand around it,” Razvan explains. A product should have multiple content creation options built into it. For example, Razvan’s nail company, Nailboo, can demonstrate the before and after effects of the brand’s dip manicures or different nail designs to try for the different seasons and trends. 

Some questions to consider if your product has content creation built into it: Can this engage people? Are there simple ways to demonstrate my product’s value in a photo or video? Can I share quickly what the before and after effects are of my product?

3. Test demand with dropshipping 

Dropshipping is a retail method where a store transfers customer orders to a supplier, who then ships the products directly to the customer. While Razvan used this method to experiment with different product categories, he eventually shifted away from a full dropshipping strategy once he committed to the beauty category.New to the industry, he didn’t want to commit to a full inventory order, so he took a partial dropshipping approach, which he called it “premium dropshipping.” “We’re dropshipping our own brand, so in terms of ability to scale and financing inventory, we found a very supportive manufacturer that produces for us, and doesn’t need all the cash upfront. It’s like a pay as you go, as long as everything stays in the same warehouse they control,” Razvan says.

If you can’t find a manufacturer to work with you in this manner, you can test out different markets and product categories with non-branded items first, using the full dropshipping method. Once the popularity of a certain item or category is confirmed, you’ll know it’s worth it to invest into branding and buying inventory. 

4. Invest in customer support 

No matter how great your product is, a business can not grow without taking care of its customers. “When we started, I just hired virtual assistants and they were monitoring DMs, emails, and helping to combat chargebacks on PayPal,” Razvan explains. No matter the size of your company, responding to your customers’ needs should be top of mind, because it’s much cheaper to keep customers coming back than it is to acquire new ones.

Hiring as many people as you can afford to handle customer support will grow loyalty, word-of-mouth recommendations, and the lifetime value of the business. “Now we’ve hired some more senior staff and they have a team that we manage efficiently and can really dive into all the feedback from customers,” Razvan says. 

5. Follow the data 

“[Pay close attention to] customer feedback, what you’re hearing in customer support from reviews, and then once you start posting on social media, you have to follow the data on the social platform. See what the reach is, the engagement percentage, what the comments say there, etc.” Razvan shares. 

Razvan doubles down on how important it is to understand your data, in case you need to pivot away from a certain marketing strategy or product altogether. When it comes to social media content, “You can pretty much only guess what’s going to work and what isn’t,” Razvan says.

Success for Razvan followed once he understood the importance of building a strong brand presence, broadcasting his product’s value proposition, and leaning into market research.

Subscribe to the Shopify Masters podcast for more insights from leading entrepreneurs, and to hear Razvan’s full journey into entrepreneurship.

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