The co-founders of Victoria-based brand Monte Slippers have decided to pause business operations amid surging costs across the company.
It comes six years after the brand was launched, with the brand shipping Australia-wide via an e-commerce website.
Co-founders Lib and Will Carter said that the decision to close comes after a challenging period post-COVID coupled with a cost of living crisis on Australian households.
Speaking with Ragtrader, the pair detailed rising costs across the board - from material sourcing to marketing.
“Cost of materials increased as well as shipping prices, especially during and after COVID. We moved our production from China to Brazil for better quality of product and service that resulted in a 20 per cent increase in production and shipping costs.
“Local shipping costs through Australia Post also increased by 5-10 per cent.”
Monte’s slippers are personalised at a local embroiderer by hand in Kew, Victoria, with their costs also increasing by 5 to 10 per cent.
“In the marketing and promotion space, the changes to IOS made paid ads a much more challenging marketing tool,” the pair said. “Results for small businesses with small budgets were often limited through the ad spend network.
“It is challenging to compete against big retailers and brands in this space with larger budgets. Cutting through the noise in this space is increasingly challenging for all retail brands.”
Lib and Will added that the influencer marketing space has taken off as a successful PR strategy, but said costs increased in line with the demand.
Despite the surging costs, Monte Slippers never raised its prices. In fact, the co-founders said they lowered them to try and combat the spending decline. But this was not enough.
“We wanted to keep the product accessible for all customers,” the pair said.
“We moved a lot of business costs inhouse like designing our own EDMs, creating and publishing ad set ourselves and all customer service. We also personally picked, packed and shipped every pair of slippers from our warehouse in Collingwood since we started back in 2019.”
Lib and Will added that very few customers are willing to pay full-price for items, which creates margin pressures for small businesses as they try to establish their customer base. They said this consumer behaviour is being driven by heavy discounting periods such as Black Friday and End of Year Stocktake sales.
“New and emerging brands will find it challenging to constantly change their prices as they need to build an audience of loyal customers who know the true value of their product,” the pair said. “We didn’t take the approach of passing on increasing costs to the consumers, but every business is different.”
From today, Monte Slippers will launch a 50 per cent off storewide sale until stocks last.
Lib and Will thanked its current brand supporters for their loyalty to the business.
“Everyone is trying to figure out the future of retail as the constant changes in consumer spending habits meet higher costs,” Lib and Will said.
“We will be taking a break to reflect, document our learnings and hope to return with something new to offer to the market.”