Skip to content Skip to sidebar Skip to footer

Shoppe: Simplifying multi-level marketing

By starting his own business Ryan Frahm found a way to not only help his wife but also fulfill a lifelong dream.

Frahm founded Shoppe—an Ames-based monthly subscription service for anyone working for a multi-level marketing company to sell their product online—with his brother Derek on May 29, 2016.

It was an idea to help his wife, who is a consultant for LuLaRoe—a designer and seller of women’s clothing that uses a multi-level marketing model to distribute products.

Ryan says she would host anywhere from one to seven LuLaRoe online selling parties a week and for each party, she would create Facebook albums full of pictures of clothing products that would be for sale. People would then comment “sold” on an item they wanted, but his wife would need to check each photo to see which ones had sold.

“She would spend all her time uploading,” Frahm says. “And you have to upload them every single time, then take them down. It’s just a nightmare.”

And because Frahm, 27, was working as a software developer at Iowa State University, he understood how to build an online platform.

“I knew enough to be dangerous,” Frahm says. “It kind of irked me, and it irked me enough to start thinking about what’s an alternative. And the reason there wasn’t an alternative up to that point was because multi-level marketing companies have restrictions on how you can sell online.”

“So I got so frustrated that I came up with a way to sell online outside of Facebook, that still aligned with their rules.”

After two months of development, Shoppe launched with 15 initial users.

“We solved a problem,” Frahm says. “You can create new popups, which is like time-based sales parties that have a unique URL that you can copy and drop into your Facebook group or whatever. It’s really versatile.”

Facebook helped Shoppe, unintentionally

Frahm said over the first two months Shoppe saw consistent growth but a 36 hour period in August of 2016 helped take the startup to the moon.

“Facebook started locking accounts for thousands of consultants because they were selling through Facebook albums and up to that point, their policy on you using their platform to sell without paying them was kind of sketchy,” Frahm explains.

So when thousands of consultants got their accounts locked, they needed a way to sell their products.

“One of the great things about the multi-level marketing space is the word of mouth marketing that occurs,” Frahm says. “So when one thing is working, everybody around them wants to be apart of it.”

Because Shoppe allowed consultants to sell outside of Facebook and still be within the rules, their userbase quadrupled in a few days.

“We just went to the moon,” he says. “It’s been consistent ever since.”

Shoppe surpassed $1.5 million in annual recurring revenue in 2016 and has nearly 25,000 total sellers. And Shoppe has almost 1.2 million buyers because each buyer signs into the system to track and manage their orders, similar to eBay.

Being an entrepreneur is in the family blood

Frahm said starting Shoppe with his brother Derek Frahm is something they’ve dreamed about.

“We grew up always talking about doing something together,” Ryan says. “We would constantly talk about what we need to do to make this happen. We’re best friends.”

Frahm grew up in Omaha and moved to Walnut in Southwest Iowa. He said his dad was a small business owner and his mom worked out of their house for a bank.

He credits Iowa State University and the Industrial Engineering Program for not only teaching him how to solve problems but learning to make decisions on the types of solutions and whether or not they pay off.

“A big part of being an entrepreneur is you have to be willing to go get it and be willing to take those risks,” Frahm says. “I can’t believe that I potentially found a long-term thing so soon. It’s been the hardest thing I’ve ever done in my life.”

 

Shoppe: Simplifying multi-level marketing | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now