From Russia with decor: how an entrepreneur conquered the USA with an unusual product

Samara entrepreneur Artyom Ruzheinikov created the MiMi brand, the most popular product of which is wooden world maps. They are sold in the form of a puzzle or a ready-made decor through our own dealer network in Russia, as well as through distributors in Europe and the USA. True Puzzle maps are currently available in 32 countries. Writes about it biz 360.

Photo: Shutterstock

In 2019, the founder of MiMi thought about creating new products to enter new niches. This would allow a company that produces one top product to minimize risks and increase sales.

“There was an understanding that we have a fairly strong network for selling our own products, but we need more products. This would increase the company’s turnover and profit. At the same time, it was important to reach the audience of our network with new products - so that they sell as well as cards,” says Artyom.

He brought his friend Daniil Rakhmakov into the project, a strong analyst with experience in large companies, whose experience and approach were necessary to form a system for selecting new products. The partners formulated what they were actually looking for - potential top-selling hits to launch into production.

“We wrote down the mission of the future company - to create a variety of easy-to-use and great-looking products, making them available to millions of people around the world. There are many meanings in this formulation. Products must be in demand - this is demand, easy to use - usability, great looking - design. We have to make them available - this is a distribution model. The products are intended for millions of people - this reflects that we are not interested in selling just hundreds or thousands of pieces,” explains Artyom Ruzheinikov.

The partners developed a selection system in which different products were ranked according to many parameters. As a result, the magnetic calendar for the refrigerator has become the leader, in which, in addition to dates, there are icons for various reminders, for example, an airplane (an upcoming trip) or a dollar icon (paying or receiving money). After a short discussion, the partners decided to immediately launch the production of magnets on the basis of the equipment available from the MiMi studio and created a new brand - Unidragon.

First failure and lessons learned

The fact that they were in a hurry with the launch of magnets into production became clear by the end of the first month of sales. It turned out that different product positioning (planner, decor, educational gift, etc.) and launching different advertising campaigns did not bring the desired result. Sales remained low, and the cost per lead remained quite high. By the end of 2019, Artyom Ruzheinikov and Daniil Rakhmakov hoped to make a turnover of 20 million rubles with magnetic calendars. But after a month it became clear that this goal was unattainable.

“We began to ask the question, why, despite the highest rating, this product was not sold? And we realized that in the euphoria that gripped us, we had missed an important factor - the sale test. I like the saying “You haven’t lost until you give up.” Therefore, we broke the rose-colored glasses, became smarter and moved on,” analyzes Artyom Ruzheinikov.

On the subject: Volunteering and multifunctionality: how American firefighters differ from Russian ones

The companions lost about a million rubles on the magnetic calendar. Then they thought about how to conduct sales tests for the selected products. At this stage, Artyom's brother, Sergei Ruzheinikov, joined the team (now Artyom Ruzheinikov owns 52% of the company, Sergei Ruzheinikov and Daniil Rakhmakov - 24% each). Sergei was one of the strongest dealers of wooden cards and sometimes suggested how the product should be changed to sell better or more expensive.

Sergey suggested creating lead forms for the next new products that received a high rating in the selection system - questionnaires for collecting contacts that are “screwed” to the product advertisement. They will be tests of potential demand and possible sales.

Each product had to launch its own lead form on social media. Users saw an advertisement for the product, its cost, and could, if desired, click on the “More details” button. In this case, they had to leave contact information. Then Sergei Ruzheynikov called them and explained that the product was not available in the warehouse, but as soon as it appeared, the manager would contact the potential buyer. Products that received the most requests for purchase were considered the most attractive and could be put into production.

The unexpected success of puzzles

In the summer of 2019, the Unidragon team launched lead forms for several products. One of them was wooden puzzles for adults, the parts of which were laser cut from plywood and had an unusual shape. One of the dealers pushed the founders of the brand to this product. When asked what he sells well, he answered "These are the puzzles."

“We bought several puzzles, showed them to a number of people, and everyone liked them. We studied how many manufacturers of such puzzles there are in the world. It turned out that it wasn’t very good,” says Artyom.

When we launched lead forms, the demand for puzzles turned out to be the highest. An additional argument in favor of this product was that it could be produced on the equipment of the MiMi studio - that is, no additional production costs were required.

Then work began on creating your own puzzles. Artyom and his partners bought all the samples that were on the market. It turned out that all manufacturers use the same packaging for puzzle pieces - a cardboard box with magnets. Its cost was in the region of 200-250 rubles, which was quite expensive for a new product.

“We began contacting the manufacturers of these boxes at the end of August–beginning of September 2019. Chinese companies had long delivery times. Russian manufacturers said that their delivery times will increase every day, because they are already starting to process orders for the new year. And since we had not yet started sales, we did not understand how many pieces of packaging should be ordered at the first stage - 500, 1000 or 10000,” says Artyom Ruzheinikov.

At the same time, he learned about a Samara manufacturer who made similar boxes from plywood. Their disadvantage compared to competitors was more weight and not a very convenient design. This gave the founders of Unidragon the idea that they themselves could produce a box based on the production of cards. It was made from a lighter material - HDF, and it differed in its appearance from everything that was on the market.

“So we began to produce an inexpensive box and could not depend on any manufacturers. Plus, thanks to the design, they began to stand out from competitors,” analyzes Artyom.

More than 20 types of paper and 10 types of wooden materials were tested to understand what to make puzzles from. At first, printing on paper was ordered from other companies. When in December 2019 the bill for printing services was approaching a million rubles, they decided to buy their own printer. It cost the same million rubles.

The production of wooden puzzles was first launched in the workshop of the MiMi studio. But soon we had to expand - hire additional people, rent new space for a warehouse and new equipment. These changes were required due to sales volume. In the first two weeks of the first month of sales - in September 2019 - 300 puzzles were sold. And almost immediately production could no longer cope with the number of orders. In November, 4 thousand puzzles were already produced and sold. Unidragon wooden puzzles cost 1990 and 2990 rubles, depending on the size.

“We invested about 25 million rubles in production, part of which was my savings. Previously, there were 17 employees in the production, now there are 42. We increased the number of lasers from 3 to 13. Our own retail turnover has grown very strongly: already in February 2020 it amounted to 1 million rubles per day,” notes Artyom Ruzheinikov.

Entering the markets of other countries

The founders of Unidragon immediately aimed not only at Russia, but also at the markets of other countries. Firstly, with the cost of puzzles in rubles, it was extremely profitable to export and sell them in euros or dollars. Second, due to the small number of competitors in the US and Europe, it was relatively quick and easy to conquer new markets.

Initially, Unidragon launched sales in Europe. But the first buyers after receiving their parcels from Russia received customs payments. With a puzzle cost of 50 euros, the payment from customs was 34 euros. Of course, the buyers didn't like it. It turned out that puzzles must first be cleared through customs in Europe, so that they can then be safely sold without additional duties for the buyer.

The founders of the project thought that they needed to open a company in the USA or Europe. In this case, you would not have to pay customs duties. When studying the issue, it turned out that the most suitable option would be to register a legal entity in Ireland.

“Ireland is an EU member state that can trade in Europe and the USA. Plus, in Ireland there is a small income tax (12,5%), you can get tax deductions in the first years of the project’s existence,” explains Artyom Ruzheinikov.

Buyers of Unidragon wooden puzzles abroad are adults, as it is rather difficult for children to assemble a picture. In Sweden, most often jigsaw puzzles are ordered by pensioners. In the first month, Amazon managed to sell products worth $27.

The crisis was good

With the onset of the coronavirus epidemic, the demand for Unidragon jigsaw puzzles in the United States has grown significantly. Because of the quarantine, many people ended up at home, and in order to keep themselves occupied, they began to order puzzles. Sales of the project through Amazon grew to $ 2500, and then to $ 6000 per day.

Even when Amazon temporarily stopped shipping non-essential products, Unidragon's founders found a way out. They began to actively develop their own English-language website intended for sales in the United States. Now products are supplied to this country through logistics companies that have their own warehouses. “Approximately 75% of all sales in the United States are realized through our website,” notes Artyom Ruzheinikov.

According to him, Unidragon is currently using several traffic channels in the US: Google Shopping, Facebook, Amazon organic search, paid advertising on the same marketplace. It also helped in sales that several local sites wrote about the company from Samara.

Once the entertainment portal 9gag.com published a video about assembling Unidragon puzzles. This video has over 5 likes on the site. The day after the publication, Unidragon received orders from 17 countries.

On the subject: The real Pushkin: how the descendant of a famous Russian poet lives in the USA

The project has now received an interview offer from Business Insider, one of the leading online business news outlets in the world.

Artyom Ruzheinikov admits that the crisis was good for Unidragon. It allowed to get closer to competitors who entered the puzzle market earlier than the Samara company. The project has diversified in the USA and uses several sales channels instead of one.

“In Russia we sell about 20% of sales in the USA (in units). From the point of view of the project development strategy, it is more profitable for us to sell all products in the USA. Puzzles, which cost 2990 rubles in Russia, are sold in the USA for $79 – almost twice as expensive,” explains Artyom.

What's next

The founders of Unidragon assume that the Russian market for their project will become less attractive in the near future due to its decline.

“Now it is just starting to fall, and this is not the peak at all. Many people think that as soon as people come out of self-isolation, everything will get better. But that's not true. In our opinion, things will only get worse. The number of non-purchases will increase, and the cost of a lead will go up, if we talk about our company,” notes Artyom Ruzheinikov.

In addition to increasing sales in the United States, entrepreneurs plan to strengthen the project's presence in Europe and enter the Japanese market. The first sales tests will start there soon.

“This year our big goal is to overtake the world leader in wooden puzzles. It is the American company Liberty Puzzles, whose annual turnover is about 9,9 million dollars,” admits Artem.

Next year, the Unidragon project plans to try its hand at cardboard puzzles, the market for which is incomparably larger than wooden ones. For comparison - last year the turnover of the world leader in cardboard puzzles, the German company Ravensburger, amounted to 524 million euros. At the same time, there is still no strong brand focused on online sales in this niche.

“We have interesting solutions and new approaches to development and marketing. In addition, the army of our “fans” subscribed to our groups and mailing lists has already exceeded 100 people. And the total coverage around the world is already more than 000 million people, and we know how to increase it. With proper investments, an excellent product and the right strategy, I believe we can achieve a turnover of 10 million euros with cardboard puzzles and even more,” Artyom Ruzheinikov shares his plans.

Read also on ForumDaily:

Playing the Notre Dame organ and Russian mat in an English court: what a translator has to face

What annoys me in the USA: the experience of a Russian-speaking immigrant

A real hero: the story of a Ukrainian who died saving lives during the September 11 attacks

As an immigrant 5 times passed the exam for a driver's license in the USA: personal experience

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.