Lessons Learned: Founder Finds Success Selling Anime Toys

Two tours as a Navy officer in Japan introduced Stu Carter to website development and the anime toy market. In 1999, he took his combined experiences and launched the online toy store In 2008, the company’s revenue peaked at $350,000, and 2009 revenue is expected to be around $320,000. Carter offers his thoughts and advice on ecommerce below.

PeC: How did you get started in ecommerce?

Stu Carter

Stu Carter

Stu Carter: “I was a career Navy officer in Japan, and as I neared retirement, I tried to find out if an anime toy store would be profitable before I [retired]. Every month I would ride the trains into Tokyo with $6,000 cash in my pocket, buying toys from Japanese wholesalers to sell online.

“While deployed on combat tours to the Philippines and Iraq, I continued to manage my business in my off-duty time. A contractor fulfilled orders from a warehouse in Kansas, and I would place wholesale orders through the Internet.”

PeC: Did you have any previous experience with ecommerce or online marketing?

Carter: “I started an Internet marketing company in 1996 that specialized in SEO (search engine optimization). I found it troublesome to convince site owners, and in particular web designers who were in love with their Flash animations and JavaScript, to make changes that would work better in the search engines. I decided to be my own customer for SEO. Now I have (nearly) complete control over how my website looks to search engines.”

PeC: What store platform did you choose, and why?

Carter: “Yahoo! store offered a turnkey solution, and the static page URLs help me do well in search engines. The template pages look pretty good from the start, and the latest version makes good use of cascading style sheets (CSS). More recently though, the database functions of Yahoo! store have become cumbersome and hard to manage, and changing or redesigning the store using the templates can be a bear. It’s also hard to add dynamic functions to the static pages. However, Yahoo! generates static URLs that are very search engine friendly, and I’d never give that up.”

PeC: How do you network with other ecommerce operators?

Carter: “Being in the Your Store Forums helps a lot. Users share a wealth of information on all sorts of issues relating to online merchants, and not just Yahoo! storeowners. I’ve learned how to modify my store and how to assess credit card risk. And it’s a good place to check first if I am having issues with the Yahoo! store system.”

PeC: How many employees do you have?

Carter: “I have up to five employees in November and December; the rest of the year it’s three people. I handle purchasing and marketing. I have someone process images. Another makes new pages. And one to three people pick, pack and ship. I don’t outsource anything except accounting and legal work. Occasionally I pay store designers for feature installs.”

PeC: What marketing channels have been the most effective?

Carter: “Email campaigns are very effective. I have about 10,000 subscribers, and click-through rates are sometimes as high as 10 percent.

“We offer a monthly sweepstakes and the announcement is sent to followers on our blogs, Twitter, YouTube, and other social media. Customers have to click the message to see if they won the sweepstakes, so the announcement has a high click-through rate.

“I have about 2,300 followers on Twitter. We are starting to offer contests on Twitter to gain followers (we offer a free toy drawing to people who tweet about us), but it’s too soon to tell if there is any value yet.

“My YouTube videos are becoming very popular, and since I am a YouTube partner, I earn some revenue from ads there. I make videos reviewing new toys and edit them myself. I embed the videos right on my blog and store pages.”

“Recently I have been experimenting with They offer a video player, and I tried it out on our home page.

“I also operate a number of blogs, and is the most popular. I can get more subscribers, links back to my store, and Google rankings.
“We don’t do any paid advertising. Most of our traffic is through organic search, particularly in Google, followed by responses to our sweepstakes.”

PeC: What specific demographic or groups do you target?

Carter: “Fans of Japanese anime (cartoons like Sailor Moon), manga (comics such as Naruto), and related games (such as Super Mario) make up a large part of our customer base. However, we also carry and sell a large number of mainstream popular toys.”

“Our customers can be children who visit the store and ask their parents to buy, college students, parents, and especially grandparents. Because of that, I don’t try to design my store to appeal to one group. Trying to look hip to teen boys, for example, might turn off girls looking for dolls.”

PeC: How do you control expenses?

Carter: “I try to make every investment pay for itself as soon as possible. When the markets collapsed last fall, I started cutting out many expense items, and renegotiating with some vendors.

“Talk to your UPS and FedEx representatives and renegotiate rates just after your big season. Most shipping companies have programs to provide computers, bar code scanners and scales to qualified shippers.”

PeC: How do you handle order processing and accounting?

Carter: “We’ve been using Yahoo! Order Processor by, but we are upgrading to Stone Edge Order Manager since Yahoo! Order Processor is no longer supported.

“Our accounting is done by an outside accountant, and Stone Edge will be giving us tracking reports on sales directly.

“We use iPayment to run credit card transactions.”

PeC: Do you sell to other retail stores?

Carter: “Yes, we do sell to other stores from time to time, and we do offer wholesale discounts. But, wholesale requires a more robust set of credit checks than a typical online order. Generally, to forgo the credit checks, I have wholesale customers pay by wire transfer.”

PeC: What has been your biggest success?

Carter: “When we started our store, Sailor Moon dolls and Dragon Ball Z toys were wildly popular, and not readily available in mass market stores. We couldn’t keep them in stock. Every estimate I had for sales was too low. We ordered and re-ordered from the manufacturer until they were out of stock, then we ordered from distributors. Later, we ordered these same products from liquidators, and enjoyed significant mark-ups online.”

PeC: What has been your biggest mistake?

Carter: “One vendor dumped our entire fourth-quarter order on us in September, with net-30 terms [before holiday sales began]. It’s best to be very specific about when you want product delivered for the holidays. We learned that the hard way.”

PeC: Any final thoughts?

Carter: “Don’t expect quick success. I don’t mind talking about how well we do in search engines, because I know 90 percent of it is because our domain is ten years old. For a merchant getting into the market now, consider there are plenty of others who have been there and done it already. But, if you have a unique and needed product or service, you may have a great opportunity.”

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John W. Dawe
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