Costume Craze is an online costume retailer based in Utah. It was started by brother and sister, Kate (CEO) & Matt (CTO) Maloney back in 2001 when Kate was just 20 years old.
Initially Kate and Matt decided to start a software company which would help companies increase their SEO rankings. As a programmer Matt created the software but needed to test it before they could sell it and so set up a test site selling monks robes. Yes that's right monk's robes!
Surprisingly, sales from this 'test' site were great and they saw a real market for costumes. They slowly added to their range and Costume Craze was born. Their initial software company idea was left behind as they ran in a new direction. They brought their mother into the business and this family affair took Costume Craze from a test to the Inc.500|5000 list.
2010 saw them hit revenues of $13.2million and also saw Kate win Ernst & Young's Entrepreneur of the Year award. Kate graduated from college in 2002 and was involved in running the orders in the early days when the company was initially seeing orders of 1 a week until Halloween when they saw 22 orders placed. Now a bumper day such as Halloween will see 5,000+ orders for there 60,00sq ft warehouse and 30 employees to handle. Well they have 30 full time employees but in October of each year they hire an extra 170 or so workers to cope with the high volume of orders.
In the second year they were still working from home, even with 8 employees, in fact when Halloween came round again they got over 700 orders compared to 22 the year before and when the FedEx guy turned up he was on the drive for over an hour scanning packages! This is when they decided it was time to move out and they moved into an 11,000sq ft warehouse, 3 times bigger than their house. One year later it was time to move again as the business saw massive growth. Another year later and they were on the move again!
Often you won't realize what you can achieve until you're thrown it at the deep end and that's certainly what happened with Kate, freshly out of college without any real world business experience she had to learn a lot as she went along. "I didn't realize how capable I was. When you have to get thousands of orders out, you learn to do things like drive a forklift. And that you can go a long time without sleep!"
As the Halloween period rolls round again the Maloney team expect yet another year of bumper sales with Harry potter and Captain America costumes expecting to be popular this year, as well as the usual favourites of Star Wars and Ghostbusters costumes.
In the industry they are in they have to keep up to date with what is happening in the movies and popular culture, so the summer blockbusters can provide a few decent business trips! It's an industry that is always changing and Kate and the team make sure that they are always up to date on popular trends to insure they aren't losing out on potential business and this attitude is what is helping Costume Craze successful and it is certainly on it's way to being number one in the industry.
So did Costume Craze ever look for funding? No. Kate preferred the penny pinching nature of her journey as she had to make sure sure that every dollar spent was efficiently used. "I have a theory that companies that get venture Capital never do as well as they could have," says Kate, why? "when you don't have to penny pinch and save and work really hard on your efficiencies you get a little bit lazy & you always assume there is going to be money there to do things," she explains.
I think what she is saying is that you are used to having a bit of money to play with and so tend not to be squeezing every penny as much as you would be when you have a little or no budget & therefore you are willing to spend a bit more when you really needn't, maybe if you had no budget you would work to finding a cheaper solution.
Here's an example from Kate herself: