17 Costumes.com.au

Dress-ups have been a popular pastime for Australian kids for generations, but in 2010 Nathan Huppatz and his co-founders decided to turn costumes and dress-up parties into a thriving online business.

Costumes.com.au has grown significantly in the past month, scooping up just over $4 million in sales this financial year, compared to around half that the previous year.

Because of this, Costumes.com.au has leapt from number 23 on last year’s Smart50 list to number 17 – an impressive effort for an online business that has only been around for five years.

Huppatz told SmartCompany the biggest hurdle so far has been trying to grow while only using up a small amount of capital to do so.

“Profitability is difficult, and requires a lot of smart and hard work,” Huppatz says.

“The biggest challenge was getting into a position where we could hold enough stock to satisfy demand for quick delivery. We did this by providing a large catalogue that we could offer, and ordered stock daily from suppliers until we had enough demand, sales data and strong enough supplier relationships that we could start ordering stock by container, and holding it locally.”

The costume retailer has also had its fair share of growing pains, having to move office five times in just five years.

The business started off in a small 200 square metre office but now occupies a warehouse almost 10 times that size.

Unexpected drops in exchange rates also put a particular strain on the company.

So how does Huppatz overcome these changes?

“I would advise small business owners to get all the basics in check so that when you grow, your systems can grow with you,” he says.

“You don’t want to be caught playing catch-up with systems that are breaking under the strain.

“Be smart with marketing and learn enough yourself so that even if you decide to outsource marketing functions, you still understand what needs to be done and whether it is being done well.”