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Gem of a Biz

[ 0 ] Apr. 1, 2010 | SBO Editor

Born in Kiev, Ukraine, Denis Stepansky moved to America at the age of 19. Settling in New York, he graduated with an IT degree from Brooklyn College in 2001. His dream was to make it big in America.

Today, he is the president/founder of ItsHot.com, an online discount diamond jewelry and watch store, with a showroom in Manhattan. Established in 2005, there were minimal sales the first year of operation, but quick growth with over $5.5 million in sales last year.

After graduating from college, Stepansky decided to create websites. On his father’s recommendation, he soon got a job working for a jewelry company creating and updating their websites. After working there for approximately two years, Stepansky felt he knew the jewelry business and this was the opportunity for him.

Once Stepansky decided on a way to earn his fortune, he started looking for a name that was short and easy to remember. He came across a name that was already registered belonging to an old website that sold hot sauce. He decided he wanted the name ItsHot and purchased it for $5,000 from the owner.

When Stepansky opened his business, it was only on the web. At this time, he knew which wholesalers to work with, as well as some of the manufacturers. At first, he got his merchandise from the wholesalers, but later was able to work directly with the manufacturers – and cut out the wholesalers, which allowed him to cut costs to the minimum.

Stepansky’s first “office” was in a 400-square-foot space. He shared the office with another company and had one room. A safe was installed in his room to protect the jewelry. Upon opening his business, he designed the first website, did website optimization so people found his website, purchased banners on other websites and did other jobs to get the business up and running. Toward the end of 2005, he hired his first employee who took project images, wrote product descriptions, took customer orders, did sales and answered the phone.

Obviously, no bank would give Stepansky a loan so he borrowed $20,000 as seed money from his family. Later, his family loaned him thousands more. “In this business, it’s not possible to do everything yourself unless you have deep pockets,” Stepansky says. “That’s why, it’s also important to have a personality that helps you succeed.”

According to Stepansky, manufacturers look at you, get a credit history and ask people around you if they’d do business with you. If a manufacturer likes what he hears, you’ll get a line of credit. Because manufacturers liked what they heard, Stepansky was given up to six months to pay off the cost of the jewelry he was purchasing from the manufacturers.

When Stepansky “opened for business” on the web, he focused on hip-hop jewelry (oversized, large, gaudy jewelry worn by rappers, hip-hop artists and fans). It was a status symbol of wealth and achievement for the wearer. “I focused on this jewelry because it was a growing market in 2005, and that’s where my contacts were the best,” he says. “Today, we still sell hip-hop jewelry, but we are not focusing on it as much as we were before.”

Basically, what Stepansky wants the website and the store to be is a superstore for people looking for engagement rings, wedding rings, watches and earrings. He has jewelry for men, women and children. He is always looking for ways to expand the business.

When he began the business, there were 200 products. Today, there are over 5,000 products with new products constantly being added. Approximately, 20 percent of ItsHot.com total sales are attributed to eBay sales.

To keep his customers, ItsHot.com offers free gift packaging, free shipping on orders over $150, international shipping to most countries, a 30-day return and exchange policy, a best price guarantee and even a layaway plan.

Recently, ItsHot.com has started manufacturing engagement rings and wedding bands at an offsite location in New York. He is using a manufacturer’s facility that didn’t have enough business itself, and there is now a business relationship between the two companies.

However, when designs are more complicated, Stepansky works with manufacturers in China that take approximately four weeks to deliver the products. A small factory in Israel also provides him with high-end merchandise.

Stepansky also started his own line of Luxurman watches, which is an affordable diamond watch brand. Currently, there are 50 styles with styles being retired and new styles being introduced. This brand is sold exclusively through ItsHot.com. In order to grow the business, Stepansky hired a marketing expert for ItsHot.com. One of his jobs is to get the stars to wear the company’s jewelry and watches. Currently, the hip-hop artist T.I. is wearing his watch. “Because he wears it, other people will want to wear it,” Stepansky points out.

Since Stepansky runs his business lean and efficiently in difficult economic times, he has only 10 people working for him in a 3,000-square-foot office, which includes a showroom, a VIP room for high-end customers, a small sizing room, a small manufacturing room, shipping room and customer service area. If there are no people in the showroom, the sales people are on the phone talking to “cold customers.”

Stepansky believes his hard work accounts for his success. Many times, he works 16-hour days and many weeks works seven days a week. He is busy providing general direction for the business, decides what products to have and where he needs advertisements. Currently, he’s working on creating a brand new website that will improve search functions and be more user friendly.

ItsHot.com creates special events and sponsors parties, hires photographers and videographers to get exposure in the media. In this case, if a star is having a birthday party, other stars come and there is interest. ItsHot.com may pay for the party’s security or part of the food. It also has banners and gets the stars to wear the jewelry.

ItsHot.com is located at 2 West 46th St, Suite 602, New York, New York 10036.
Call the company for details and information. Phone: 212-398-3123. Fax: 212-575-8723

By Vicki Gerson

Denis Stepansky’s online diamond venture currently earns more than $5 million a year and the company is looking forward to generating revenue of $20 million a more! The company sells all different types of diamond jewelry including hip-hop items, engagement rings and tennis bracelets, too. Watches and earrings are also a part of the marketing mix!

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Category: Magazine, Start Your Own Business, Start Your Own Business Spring 2010