One of our co-founders recently sat down with Starter Story to share the unique backstory of CaliConnected and how much the business has grown since they took over the website in 2018. Learn more about the founding of CaliConnected and our goal to become the best online headshop that ever existed below!
Hello! Who are you and what business did you start?
Hello, my name is Nassir Silwany, and I am the Co-Founder of CaliConnected, an online marketplace for smoking accessories. After years of experience in the retail industry, my business partner and I decided to launch CaliConnected in April 2018.
It has since grown into a full-fledged online headshop marketplace with a wide selection of products and an easy-to-use interface. CaliConnected.com has become one of the go-to destinations for smokers looking for quality smoking accessories online. The website offers competitive prices on a wide range of products, from bongs and pipes, to dab rigs and vape pens.
The marketplace holds over $40,000,000.00 of in-stock inventory to the end consumer between our warehouse and vendors we have connected to sell on CaliConnected.com. We have done nearly 2 million in lifetime sales, currently averaging $70K/month. We are still operating at a loss and reinvest all profits into new inventory and making the store more awesome!
What's your backstory and how did you come up with the idea?
CaliConnected is the first company my business partner, and I have ever launched. After winning a business case competition that Target hosted at my college, I successfully interviewed for and received a management position for the retailer straight out of college. After a year on the management team at a location grossing north of $30 million yearly, I left to oversee a $13 million retail territory for the largest plumbing company in America.
Shortly after getting there, I knew I needed to embark on some side hustle. Although I was fully committed and enjoying my new job, I just felt deep down that corporate America was not for me. A good friend of mine (who ended up being my business partner Mike) from college and I decided to register an LLC. We put ten thousand dollars in a business bank account and started to go to real estate foreclosure auctions in the hopes of winning something cheap that we could flip for a profit. This was something we aspired to do after college but we didn't have enough capital to compete with the other bidders. After nothing came of that, we decided to look into either the vending industry or e-commerce. We focused on sectors that really hadn’t been revolutionized by either vending or e-commerce.
The best idea that we came up with at the time was to transform the sunscreen industry by combining it with vending machines. Why aren’t their sunscreen dispensers up and down all beaches? Mainly on public beaches that can generate extra revenue for cities and keep their visitors safe in case they forget their sunscreen. Even further, it could start an eco-revolution, where we dump the idea of buying sunscreen in environmentally harmful bottles and transition to a world where sunscreen is stocked for you at the beach dispensed by hands-free application devices.
Going down the rabbit hole of this idea and even meeting with the holder of a utility patent that covered basically any sort of sunscreen dispenser, we quickly found out why this hadn’t happened yet and why we surely were not going to be able to make any headway with this idea. There were basically two people who had started to pursue this idea in the private space with a direct agreement with hotel chains, and the one did not have a patent or a licensing agreement from the patent holder we spoke to. This turned into a considerable patent infringement case between the two, and you can guess the rest.
We went back to the drawing board but this time focusing on e-commerce. Our next best idea was to successfully launch the best online headshop. Why did we target the cannabis equipment industry? Because massive retailers like Amazon have already conquered the online shopping market but there are certain industries that they have not touched. It's highly unlikely these large retail giants will ever become competitors because the particularly fragile nature of our products would slow down the efficiency of their warehouses. That and the always-changing legality of cannabis equipment is likely a giant red flag for their legal teams. The prospect of building the best online headshop seemed like a no-brainer because we were both well-versed in the cannabis industry and already familiar with shopping from the websites that are now our competitors.
At the time, we knew from experience that a majority of the options available to shop for Bongs, Dab Rigs & Vapes online still felt untrustworthy, and they lacked customer support making the shopping experience poor. Even when looking at the brick-and-mortar experience in this industry, some of the flaws seen in the e-commerce space were not seen here, but it was rare to find a full-on marketplace experience where you could get a hold of almost any product you wanted. The majority of head shops out there are small mom-and-pop businesses with limited inventory and reach.
We decided to check out the Shopify Exchange platform, where you can find business owners reselling their starter stores. We came across a tiny online head shop that was based out of the UK. They had maybe five total products listed that were up for sale. After doing some research, it was evident that if we wanted to pursue buying this store, we were essentially just purchasing the name and URL. The owner had no inventory we wanted, and the current logo and branding he had tied to it were terrible. We loved the name for the type of customers we would be targeting and felt that it would resonate well with the industry, so we decided to take a shot at buying the store.
The current owner then had it for sale for $300.00 on the exchange platform. We felt it was worth that much for the URL alone but decided to negotiate it down anyway, and we ended up paying a whopping $130 for CaliConnected.
Take us through the process of designing and launching the website.
After buying the name we did a complete rebranding. From the color scheme to the logo, everything was redone. We filed trademarks with the United States Patent Office in order to protect the branding. We bootstrapped everything at first and developed the website on Shopify.
We got some inventory under us and reached out to one of the larger online head shops to see if they would allow us to drop ship some of their products. This allowed us to significantly increase our product offering to the end consumer from the little inventory we could purchase at first. Luckily they said yes and were actually reliable. However, we knew if we wanted to be able to offer the best customer service, and the best overall shopping experience, we needed to save for our own warehouse and be shipping all, or at least a majority, of the orders ourselves.
With being in a high-risk industry, we initially ran into some issues with finding a payment processor at rates that wouldn’t cut majorly into our bottom line. There are definitely multiple options when it comes to processing for high-risk merchants, but at first, it is costly. We also wanted to run everything above standards regarding the laws we needed to abide by. At the time, there were only two states that required age verification by a 3rd party vendor, not allowing the retailer or customer themselves to self-verify. We saw the writing on the wall and decided to start using a 3rd party age verification system nationwide from day one. A costly decision, but it was just something we saw as vital for ethical and branding reasons.
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