Andrew Hanna and Mal Badawi created their online retail store, Ozdingo, to be an ecommerce platform for the people. Unlike Amazon and eBay, it focuses on selling local products across multiple marketplaces and handles all customer service for them. To realize even a fragment of their vision, the two partners worked for eight years as ecommerce resellers, slowly reinvesting profits as VC-backed competitors raced ahead.
Andrew and Mal met when Mal emigrated to Australia from Lebanon after a career in investment banking. The two young men became fast friends and tried a couple of business ideas, including a falafel shop, and then sold anything they could think of on eBay – one of the few major ecommerce marketplaces in Australia around 2010.
As they sourced more products in Australia, Andrew and Mal realized hundreds if not thousands of desirable Australian brands had no idea how to reach customers at home or abroad. They renamed their online store to Ozdingo, the most Australian name they could think of, and became the online storefront, logistics provider, customer service provider, technical support, and more for every local brand they could find.
Over five years, they moved from a small shed in Andrew’s backyard into a giant warehouse manned by a team of 15 mostly recent parents attracted by the family-friendly work environment and flexible hours.
Today, Ozdingo is a seven-figure business with over a million orders. Over 500,000 Australians shop at Andrew and Mal’s store, their products are viewed 116,000 times per month, and they manage thousands of orders per week. Here’s the founding story of what may be Australia’s first bootstrapped ecommerce giant.
A Falafel Stand Becomes an Ecommerce Giant
In 2011, Mal moved to Brisbane, Australia, after an investment management career spanning six years in Qatar and Switzerland. He wanted to open a food business, so his friends in Brisbane introduced him to local restaurant mogul, Andrew Hanna, who owned multiple salad bars in the city. Upon meeting, Andrew and Mal realized they possessed complementary skill sets and went into business together.
“Andrew is more of a ‘Let’s do it!’ type, and I’m more of the numbers and Excel kind of guy,” says Mal. “I think from a startup view, you need a team where people complement each other. You often can’t have both with the same skills.”
Andrew puts it more simply: “I tell him we’re jumping and he builds the parachute.”
Because of Mal’s undergraduate background in programming, the pair’s first venture was selling whitelabeled mobile apps to small businesses with Bizness Apps (a company founded by MicroAcquire’s Andrew Gazdecki while he was in college).
“We had over one hundred small businesses using the apps,” says Mal. “However, we quit because cold calling and sales got too taxing.”
After winding down the whitelabelling business, Mal and Andrew opened a falafel shop and an eBay store for juicer blades and other replacement parts. Sales were high and the work was relatively lax. They expanded their product offering to peripheral industries and moved their operations to the shed in Andrew’s backyard, closing the falafel shop a few months later.
“On eBay and Amazon, you can’t tell who you’re buying from or where your money is going. We wanted to make a business that felt like your local store, but online.”
“We went to Office Works to buy bubble wrap and delivered all of our parcels to the post office ourselves. We learned from our mistakes in terms of inventory management and other procedures,” says Andrew.
Andrew and Mal initially sourced goods from all over the world, particularly manufacturing hubs like Japan, China, and the Philippines. They also began stocking more unique items from local Australian suppliers. Many were popular, big-ticket goods like specialty fashion and furniture from small-scale suppliers working from their homes.
“While they produced great products, many had no idea how to open online stores and create sales channels,” says Andrew. “We realized we could become a business helping Australian suppliers sell their products.”
“We wanted to break the barriers of online commerce,” says Mal. “On eBay and Amazon, you can’t tell who you’re buying from or where your money is going. We wanted to make a business that felt like your local store, but online.”
They rebranded their operation with the most Australian name they could think of, Ozdingo. It’s a combination of Oz, short for “Ozzie”, a common nickname for people from Australia, and dingo, a type of native wild dog.
Servicing Australian businesses turned out to be a bullseye. Growth at Ozdingo was over ten percent every year after Andrew and Mal’s decision, and soon, small shipments turned into orders for entire crates. In 2017, they left the shed for a large downtown warehouse.
But in 2018, they hit a hurdle: They couldn’t systemize deliveries and returns because they only could warehouse a small percentage of the goods.
“We had a great business, but it was just a large ecommerce store,” says Andrew. “Many of our suppliers sold specific products, so it was hard to do an easy analysis of how to move them. It was almost too hard for us to manage.”
A radical change to their business model solved the problem. To gather better data and create more efficient delivery systems, they would become the storefront and customer service portal and pass logistics and warehousing to their clients.
“We’d spent years selling and moving goods ourselves, so we could use those analytics to stock and fulfill a handful of things well and let customers do the rest,” says Andrew.
Andrew’s 75-year-old father joined the team as their first employee. He would come by to help them wrap parcels. Soon, Andrew’s brother-in-law joined the operation as their warehouse grew. Then they took on a team member who recalibrated their company culture entirely.
The Untapped Working Parent
One of Ozdingo’s most pivotal hires was Rose, a family friend who lived across the street from the warehouse. Rose was a veteran of fashion retail operations with over 25 years of experience. She’s also been a friend of Andrew’s family for thirty years. Often she would pass by the Ozdingo warehouse on her way to and from work and comment on the business.
The partners discussed how cool it would be if they poached Rose from her corporate career to be the operations manager at Ozdingo, but she was fiercely loyal to her company. They got their chance in 2017 when Rose’s company was acquired, but she still had reservations. She was a recent mother and wanted flexible hours to spend time with her children.
Knowing Rose’s decades of ops experience could help them become a large-scale operation, Mal and Andrew quickly agreed. They offered flexible hours that later attracted several more employees who followed Rose’s schedule.
“We started looking for talented people seeking flexible hours so they could take care of their kids,” says Andrew. “Today we have seven staff who work from school drop off at eight-thirty to pickup at two-thirty. What they get done in six hours most normal staff wouldn’t get done in two days.”
The cofounders credit flexible working hours and an employee-centric culture for their uncommonly low turnover.
“We always kept our positive reviews at 99.9 percent. If they ever dropped to 99.8 percent we worked to bring them up again.”
“Most people have been with us since they were hired,” says Mal. “The way I see it, I work for every one of our employees. They know that if something gets too tough they can always take it to me. I did investment banking for some years and didn’t have a life. It’s very important for me that we grow a company with basic values and ethics.”
“I think there’s a big workforce out there ignored by most businesses that can’t provide flexible hours,” adds Andrew.
Eight Years in the Community Does Wonders For Marketing
Few marketing tactics work better than eight years of operations and high-quality customer service. “We always kept our positive reviews at 99.9 percent,” says Mal. “If they ever dropped to 99.8 percent we worked to bring them up again.”
They also did the small things like listing on classified websites like Gumtree and trademarking their name early on. They became a household name in Brisbane.
“A few years ago, people started walking into our office and they would know who we are, which was cool,” says Mal. “Some of our suppliers find us purely through word of mouth and the rest come through organic traffic.”
Mal says Ozdingo didn’t focus much on other forms of marketing until about three years ago when they began hiring a marketing team.
“At first, we had a standard disgusting-looking Alibaba-styled website. We edited it and then used traditional paid marketing channels to get on people’s radars. We scaled down Google ads recently. Social media is just us being ourselves and having fun with our products.”
Ozdingo Connect
In 2022, after three years of building, Andrew and Mal finally collected the data they needed to begin stage two of their journey – a SaaS tool. Their first in-house software is Ozdingo Connect, a warehouse management system (WMS) tailor-made to Ozdingo’s complex storefronts. Andrew and Mal believe the software is crucial to scaling their business.
“Out-of-the-box software solutions are not customizable enough,” says Mal. “From our experience over the last nine years, each integration with third-party software would lack something. We tried to make our own software cater to these problems.”
Most third-party warehouse management software seemed made by people who had never run a warehouse. “A lot of software connects SKUs, but those change over time so you need to constantly reconnect it to new SKUs,” says Andrew. “Some types track orders through barcodes, but those often get reused on other products. We use the IDs of stores themselves so we can be flexible with SKUs and barcodes.”
Ozdingo Connect does more than just warehouse management. It also serves as a one-stop online marketing and listing tool. Suppliers listed on Ozdingo Connect appear in the Ozdingo store and on marketplaces like eBay or Amazon with optimized listings and product descriptions.
“Australia has one of the strongest standards for safety and regulations for electronics in the world.”
“One lady we met had an ecommerce store for dachshund jackets,” Andrew continues. “She’d created ten of these beautiful designs and was just sitting there waiting to be discovered. With Connect, we could take her product, put it on our platform, give it the biggest exposure she’s seen, update listings, and get it out ASAP. Big companies are looking for five thousand SKUs. I’m looking for the lady with twenty SKUs. I want one thousand of those.”
Everyone Loves an Ozzie
Andrew and Mal’s goal as Ozdingo grows is to become a new type of ecommerce platform and retailer. One synonymous with Australia as well as high-quality goods and services. The duo only allows brands to ship with Ozdingo if they can guarantee one-day shipping to all of Australia and thirty-day returns.
“Australia has one of the strongest standards for safety and regulations for electronics in the world,” says Mal. “We want to help get manufacturing up and running in Australia. Going forward, you’ll access products you won’t see in other places. We want super specific stuff.”
It’s easy to tell how excited and proud both founders are of the business they grew from a falafel stand into what could one day be the biggest online retailer in Australia. Both feel doubly rewarded because they doubted their success for many years.
“I didn’t pay myself for over a year and a half because I was so worried the business would fall apart at any time,” says Mal. “And then I had years where I worked nonstop because I didn’t think we had the funds for more employees.”
Bootstrapping was tough for them too. As they grew their company, they saw competitors successfully woo venture capital and eclipse them in size. However, as ecommerce businesses tighten their belts in 2022, Andrew and Mal are patting themselves on the backs for staying self-sufficient.
“You get envious when you see companies started at the same time as you growing and getting VC,” says Mal. “Now we’re starting to see why we’re doing it this way. Our eight-year foundation of lean, recurring revenue is keeping us alive.”
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