How the ‘flywheel of success’ helped social enterprise Sydney Sock Project reach $1 million in revenue
The Sydney Sock Project sells trendy, fun and colourful socks with 10% of the costs donated to charitable organisations.
“The most requested item in homeless shelters is socks.”
This was the fact Sydney-born social entrepreneur Andres Herrero came across in 2018 that would eventually spark an idea to launch an enterprise to combat social issues — one pair of socks at a time.
The Sydney Sock Project sells trendy, fun and colourful socks with 10% of the costs donated to charitable organisations. Since it was formed, the social enterprise has partnered with numerous businesses and organisations, including the RSPCA, Thread Together, Children’s Cancer Institute, Sendle and more to develop a retail model that gives back.
This year, Sydney Sock Project is on track to turn over more than $1 million in revenue. It is run by a small team, which includes two employees and several contractors that specialise in particular areas from marketing, design and content creation. It’s an efficient model, according to Herrero, who says it allows him to put the tasks he’s generally not great at into the hands of skilled professionals.
Herrero started the Sydney Sock Project while he was in his last year of university, studying environmental engineering. He realised at the time that “engineering wasn’t the career I wanted to pursue”.
“I read somewhere that one of the most requested clothing items in homeless shelters were socks, so the idea sparked to sell socks that gave back to the community,” he explains.
“It started purely as a hobby business where I’d take a few hundred pairs down to Bondi Markets on Sundays and put up a big sign that read ‘You Buy One, We Donate One’. The socks flew off the shelves each week which gave me the confidence to establish the brand online.”
Herroro hit pause on the business when he found a job as a project engineer in the wastewater industry, but ultimately felt it “wasn’t the right move”. But what he did next, set him on the course of launching a full-fledged social enterprise.
“I packed a bag and walked for 40 days across Spain and France to think through my future,” he reveals.
“It was then I decided I wanted to pursue this business and go all in.”
From Bondi Markets to e-commerce-fuelled growth
Returning from his pilgrimage, Herrero began focusing on the Sydney Sock Project full-time, picking up a part-time job working at a nursing home to fund the business.
This was in early 2020 and the increased focus on the venture was starting to pay off. But a global pandemic threw a spanner in the works.
“A few months into leaving my career behind and going ‘all in’, COVID hit,” Herrero explains.
“Our biggest revenue generator at the time was Bondi Markets, which instantly disappeared so making the pivot to becoming an online business was crucial.”
In 2020, the Sydney Sock Project turned over just under $200,000. This year, it is on track to turn over more than $1 million.
Herrero says the biggest turning point for the business was introducing Facebook ads as its primary source of marketing.
“I initially learnt how to run ads by watching online tutorials — following step by step. Towards the end of last year, we were turning over around $30,000 per month in revenue and I felt lost in what needed to be implemented in the business in order to grow,” he recalls.
“A big part of this bottleneck was the fear of being a bit more aggressive with my marketing strategy. At this point I introduced Ecommerce Equation, e-comm specialist coaches, into my business. The results were truly amazing, we instantly doubled-tripled our monthly revenue just by having more clarity into the numbers coming in and out of the business which allowed me to confidently increase my ad spend and produce more revenue for my business.”
As many business owners can attest, however, growth can mean your margins become slimmer and staying on top of expenses becomes critical.
For an e-commerce business like the Sydney Sock Project, this meant looking at shipping costs in particular. Shipping is an unavoidable expense, says Herrero, but one that was eating into the enterprise’s bottom line.
“Our shipping costs were eating up a really large percentage of our revenue so I reached out to Sendle,” explains Herrero.
“Within 15 minutes we’d integrated Sendle into Shipstation, and organised a courier to pick up the orders the following day.
“The savings were substantial, we’ve saved over $8,000 in shipping costs from making the switch to Sendle — and as a small business, that’s nothing to sneeze about!”
The flywheel of success
Herrero believes if every business ran as a social enterprise, we’d be tackling a lot of the social issues faced within Australia at a much more rapid rate.
“Consumers are becoming a lot more conscious of what they’re purchasing, which is pushing businesses to implement a social model, which is a great step in the right direction,” he says.
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“I’ve really always admired the social enterprise model. As the business grows, so does the social impact. Some of our partners rely on us as their primary donor to operate their charity and not-for-profits.”
So how has Herrero grown the Sydney Sock Project and this impact? He follows a simple flywheel process that can be broken down into three steps.
“One, release incredible products and have a point of difference in the marketplace. Two, create amazing content and market through digital media, such as social channels and search engines, to bring in new customers. And three, retain your customers through email/SMS marketing,” he explains.
“I have a big poster in my office with this flywheel structure to remind me each day that the process of running an online business is simple and doesn’t require a lot of unnecessary stressful overthinking.”
And as for what’s next, Herrero is thinking global.
“Supporting charities and not-for-profits across Australia and New Zealand has always been the core goal for Sydney Sock Project,” he says.
“Expanding this model across the globe to support social issues in other countries has always been a dream of mine, so I definitely plan to expand the business model across other countries to support foreign charities.”
