From personal passion to big hit: How an audiophile launched Headphones.com

Ultimately, Andrew started the company because he wanted the products for himself. “I spent money in this space because I loved it, even when I didn’t really have the money for it, so the business actually started as a way to get some good gear,” he explained. “I wanted to get some expensive speakers, but my wife said it was too much, we couldn’t afford it. I got creative and thought, ‘What if I become dealer for the speaker company, I can get a discount?’ I just went for it.”

Although the business strategy wasn’t fully developed, Andrew wasted no time getting started. “I made a website, and within a week, I’d sold a pair of speakers,” he explained. From there, he fixed the website design and began adding more products, putting his doubts aside as he invested more time and thought into the project. “I thought it made zero sense as a business opportunity, given big box stores had the consumer electronics market covered, but it was for fun, and it was cash flow positive from Day 1.”

Once the website was built, Andrew’s brother and co-founder, Taron Lissimore, got involved. “One day I asked if he wanted to give me a hand with the site I’d just built,” Andrew said. “We’ve been working together every day since. At the beginning he helped put products on the site and as we grew he helped with brand relationships, improving the website, customer service and shipping and logistics.” Taron shares Andrew’s passion for technology and gear, and is currently Headphones.com’s Director of Sales.

Andrew’s wife Monica also helped propel the business forward. With a keen business sense and a background in accounting and finance, she was pivotal in the early success and growing the business. “We started in 2016 and by 2018, my wife started to see the opportunity. We started to take it more seriously. Her assessment of it was a signal that this was real,” Andrew explained. “She put good guardrails on our spending, and we had a lot of growth because of her involvement.”

The team realized that there was an underserved high-end market and opportunity to reach audiophiles with quality products and a business rooted in an online community. The community element emerged organically and helps set the business apart from competitors. “We wanted to have a place on the internet where people could be passionate about this topic. We founded it on a principle: you can disagree but do so with respect. All are welcome and accepted. You don’t need to be an expert, you just need to have a love of sound,” Andrew said.

Now, Headphones.com has 500,000 active monthly users who come together around a shared interest in music, sound, technology, audio quality and history. “The community was kind of like a rocket: lots of work at the front end, but now it almost polices itself, and the right people have found it,” Andrew shared. “Our products tend to appeal to DJs and code writers for software or gaming.”

Getting the business set up presented some unique issues. Financing the inventory and dealing with foreign jurisdictions was challenging, with products coming from around the world. While the team had no problems generating demand, consumer expectations have changed and people want their products immediately. “We were warehousing in the U.S., self-funded, and it was a capital-intensive business as the products are expensive,” Andrew shared. “We never could have enough inventory on hand and fill the demand fast enough.”

Their support network at the time didn’t offer much support. Andrew explained, “During this time, we started exploring other banking options given the complexity of our business.” As he began exploring other options, he connected with Simon Straith on the Business Banking team. “Simon was really willing to help, but I was skeptical at first,” Andrew said. “We were still a small company and we didn't interest a lot of banks because we weren’t really a big enough deal size to deal with the financing to secure our U.S. inventory. But Simon and his team, including Gilbert, Ryan and Sabreena, stuck at it until they fixed the issue for us, bringing in legal expertise to deal with the complexity of our situation.”

The new team has made a difference, making navigating their unique circumstances easier. “The relationship with CIBC and the attention we’ve received as a small business has been amazing,” Andrew noted. “Being able to finance our inventory through CIBC’s financing support has made the biggest difference. It’s why we’ve grown a ton in the last 2 years.”

The Business Banking team is committed to the team’s long-term vision, looking at strategies that can support Headphones.com today and in the future. “The team is trying to stay ahead of the game with him,” shared Simon, Director and Team Lead, Business Banking. “They’ve been introducing him to partners he doesn’t need now, but that will add value down the road.”

The pandemic created additional challenges. All business owners grappled with changing regulations and impacted supply chains. “The pandemic was incredibly stressful in the beginning,” Andrew shared. “We were in a financial crunch, and we forecasted demand would drop by 75% given our products are high-end.”

Thankfully, the forecasting was wrong, but the reality presented other challenges. “We had the opposite problem: demand was strong and supply dried up,” Andrew explained. “Throughout 2020 we had challenges with inventory, knowing what to buy, getting the inventory and having some safety inventory. If you looked at our site mid 2020, we were fairly out of stock of everything.”

“The company has been on a strong growth trajectory, partially influenced by the pandemic,” Simon explained. “With everyone sitting at home, with a bit more money in their pockets, people saw the value during the pandemic in having higher quality headsets.”

As regulations continue to change, this increased demand shows no signs of slowing down. “We haven’t seen a loss in momentum in growth despite consumers going back to work in the U.S. and having the ability to spend their money elsewhere,” Andrew noted. “Our online traffic doubled and we’re still experiencing record sales months.”

With a loyal following and solid footing under the business, Andrew is setting his sights on what’s next. “We want to be in more verticals, but we want to be about helping our customers get things that make life better — but overall, less, better stuff,” he said. “We’re betting on a big enough portion of the world heading in that direction.”

The vision for the future includes leveraging the community aspect of the business by focusing on products people are passionate about. “Community is an important part — it’s more about people and relationships,” Andrew explained. “We want people to get things they value to add to their life. Through building community, valued content and access to high quality products, we’ll build something.”

The Business Banking team understands where things are headed and are ready to support every step of the way. “It is about finding products where community can be established and pull people in,” Simon shared. “It’s about products that fuel passion — it doesn’t necessarily need to be technology, nor does it have to be the same buyer for different products.”

To make that vision real, Andrew and the Headphones.com team are focused on building long-term relationships. He explains, “We want to think about building long-term relationships. I think having discipline around looking at the long-term can be our superpower.”

Those relationships include CIBC. “We’re really loyal to CIBC, they’ve put a lot of work into this relationship,” Andrew explained. “CIBC has taken on extra risk for us, which is a really good sign. We’re non-traditional as a banking client, and CIBC has bridged the gap for us.”

Andrew’s advice for other business owners, no matter the industry, is to cultivate resilience. “It’s one of the most important qualities for an entrepreneur — you only really lose if you give up,” he explained. “When you get in situations where you feel there’s no answer, most of the time, from my experience, when you get there, press a little further. Your ability to get creative defines your success or failure.”

To share your entrepreneurial story and see how we can help, meet with us Opens in a new window.. We’re here to support your unique needs. Talk to a CIBC business advisor today by calling 1-866-992-7223 Opens your phone app..