Lovehoney is a true online success story, growing from a three-man operation run out of a Pickford’s self-storage unit to a multimillion-pound business in less than 10 years.

In fact roughly one in three sex toys sold online in the UK now goes through Lovehoney.

At the E-commerce Expo this week co-founder Neal Slateford and e-commerce manager Matthew Curry gave a presentation about 10 things they have learned from setting up their own online business.

Here’s a run through of their 10 pearls of wisdom, and you can also hear Curry talk at Econsultancy’s JUMP event on October 10.

1. We don’t know anything, you don’t know anything, don’t let that stop you.

Lovehoney’s was established back in 2002 after its founders were made redundant from Future Publishing. 

They knew they wanted to set up an e-commerce store for either cross-stitching or sex toys, eventually deciding that the latter sounded like more fun.

However they had just £6,000 investment and no real experience of running an online business so had to learn as they went.

The budget was used to pay a coder and buy in a small amount of stock, but there wasn’t much money for testing or design so they just copied John Lewis’ checkout design.

Fulfilment was run out of a Pickford’s self storage unit that had no heating or electricity, but it also meant there were no business rates and rent was low.

Slateford said this shows you don’t necessarily need massive backing and a huge amount of experience to make a start in e-commerce.

2. What makes you special?

After a few years it became clear that there was money to be made selling sex toys online and competitors began to emerge.

So in order to differentiate themselves Lovehoney began making their own products.

They even got customers to design products, the result of which was a toy called Sqweel that won them a huge amount of PR and went on to become one of their best selling items.

According to Slateford:

“Getting your customers to send you their ideas is great for creating unique products and anything that you can make yourself comes with a great margin.”

3. Retail is detail

The average British consumer probably isn’t used to buying sex toys, so one of Lovehoney’s biggest challenges was to normalise its products.

To achieve this Lovehoney employs eight content writers who create detailed descriptions for all products, including the size, weight and what it’s made of.

They also use videos to demonstrate products and draw up buyer’s guides for every item.

Not only does this give customers all the information they need before making a purchase, but the original content is great for SEO.

For more information on this topic, read our blog post about 10 essential features for creating great product pages.

4. Care for the community and they will care for you

Lovehoney has a community of more 37,000 members that it is able to use for market research and to investigate which products the site should stock.

Customers also recommend products they have seen elsewhere, send in photos and write reviews. Slateford said that reviews in particular are an extremely powerful tool for e-commerce.

“Reviews sell products, so all products that go live have at least one review. Even bad reviews are necessary so consumers trust you.”

5. If you outsource everything, what exactly is it that you’re good at?

No business can do everything alone, but Slateford said that it is important to learn as you go and avoid buying everything in from agencies.

If you sell the same product as a competitor the only way to differentiate yourself is either on price, service or technology.

Lovehoney has built it’s own e-commerce platform, including the CMS and email system.

6. Always go the extra inch

Everyone knows customer service is important, but few companies deliver a consistently great experience.

When Lovehoney was starting out the sex toy industry didn’t have a great reputation, so they decided to go all out with customer service.

As a result, customers can return any item, for any reason, 365 days after they bought it – even if it’s been used. 

“We would rather refund the customer and make them happy than annoy them and have them tell all their friends. You will get some people who take advantage of it, but they’re such a small percentage.”

He said the benefits of positive press and customer satisfaction far outweigh the negatives.

7. Find good people, it’s hard to be successful without them

One of the keys to building a good business is having a good team around you. This is particularly important for a small e-commerce site that does not have a huge budget for hiring new people.

That said, Slateford also said that he should have hired more people in the earlier stages of the business to help share the workload.

In recent years around 75% of Lovehoney’s staff have come through Twitter as it is a good way to get to know what someone is like and scout for new members of the team.

8. It’s easier to change direction when you’re already moving

When launching a new tool or feature on a website it can be easy to get caught up making sure everything is absolutely perfect before setting it live.

Lovehoney found that a better approach is to first put out the barebones of a new feature then develop it over time using analytics and visitor feedback.

This reduces the likelihood of getting bugs and means the site is constantly being refined.

9. You don’t need to spend money to get noticed

Having initially gone down the normal marketing route of TV, press and billboards, Lovehoney quickly found that traditional media does not work for the sex toy industry.

Instead it tends to be “stupid ideas” that work well, such as novelty toys tied into events like the royal wedding.

The sex toy industry may have an obvious advantage when it comes to PR stunts, but even so creative ideas are better at getting press attention and also tend to be cheaper than traditional advertising.

10. Have fun and be happy

It’s a much-touted line, but starting a business is a difficult process that will eat up all of your time and energy.

As such it’s important that you do something that you enjoy and that will inspire you to keep working hard.