Originally, Valentino Laucoski wanted to be a lawyer, but then he discovered an even greater passion: providing entertainment to the masses – first in the form of VHS tapes, then as a musician in a rock band! He then used the money he had made in his musical career to open his first brick and mortar store for adult products in Skopje, the capital of Macedonia. That was in 1995. Today, he pursues a dual strategy, running a brick and mortar store as well as owning an e-commerce shop. EAN spoke with Valentino about his business model and the plans he wants to realise when Macedonia becomes a member state of the EU.
When we interview retailers from across Europe, we often ask them about the competitive situation in their country. In this case, that question seems moot. After all, you are the only retailer for adult products in Skopje, the capital of Macedonia, right? Valentino Laucoski: Technically, no. The truth is that there is another retail store. But we are the only store that is truly erotic, woman-friendly, and modern, offering a wide range of toys, cosmetics, and lingerie.
How does it feel to have the only store of this kind in the whole city? Would you consider yourself a pioneer of the Macedonian adult market?
Macedonia is very small country with a small buying capacity. Population is less than 2,000,000 so we can cover the needs of the entire market and then some. We offer products at competitive prices, even though we have no significant competition here. We are competing mostly with ourselves, but even in that case, we take the competition game very seriously. In other words, we are constantly adjusting our prices to be as affordable as we can be. We are not waiting for somebody else to come and do that for us. My goal is to meet Amazon’s or even Ali Express’ prices for most of the products, and I don’t think that this is impossible.
When did you open this store, and what was your motivation to try your luck with adult products?
I successfully studied law and I wanted to be an advocate, but I discovered that trading with video cassettes was very profitable, and I lost the motivation to work with judges and people’s problems. Instead, I wanted to work to satisfy people’s pleasures!
Therefore, I started to sell video cassettes via mail order back in 1989 when Yugoslavia still existed. During that time, I still studied law. Later, I opted out of studying, and for the next two years, I earned a living as a member of popular rock band. After that, I retired from music and invested the money from my rock music days to open my first brick and mortar store in 1995.
The market has changed a lot throughout the years – today, the focus is on couples, sexual health, and sexual wellness. Is that also the case in Skopje? How has the Macedonian market developed?
The Macedonian market is developing ‘Fifty Shades of Grey’ style. People see something on the internet or in the cinema and then they come to my store to try it live in their bedrooms.
And how have you responded to these changes?
We are more than ready to stock up and offer these products to our customers. We constantly monitor the market and update our offer with high quality toys, lingerie, and cosmetics.
What are the developments and/or problems that have the greatest impact on your domestic market right now?
Frankly, I can’t provide a precise answer to this question. My main task is to order quality products at the best prices and then sell them on to the consumers at affordable retail prices.
Who are your customers, how well-informed are they when they enter your store, and what products and brands are they interested in?
Almost all of the customers are well-informed thanks to the internet. We do our best to keep our site updated with useful data, so most of them enter the store with a picture of the product that they are interested in. Most of the customers are interested in vibrators, dildos, and masturbators. There is not quite as much interest in fetish products, and trailing that is DVDs.
There are many new products that make use of modern technologies? Do the Macedonian people like those, or do they prefer more conventional toys?
My customers like everything. Fancy silicone vibrators are as popular as realistic dildos and vibrators. Many customers only buy lingerie from my store, stockings and bodystockings in particular, and maybe cosmetics. Other customers buy a combination of different products, but we are most happy with the returning customers. Returning customers are a sign that we are doing our job well.
Which factors have the biggest impact on the consumers’ purchasing decision? The brand? The price? The quality? The design? The features?
Everything must be in harmony. In other words, as much as possible for as little as possible. That is the formula. I can guarantee you that this formula works everywhere. No one can resist a good product at an affordable price. And when I say affordable, I mean well-adjusted.
How do you choose the products you buy for your store?
I do it intuitively. I use my intuition and information and requests from my customers. And I fare very well with this strategy.
Like many retailers, you pursue a two-pronged strategy, with a brick and mortar store on one side, and an online shop on the other side. Is that the only way to be successful as a retailer for adult products in today’s marketplace?
Of course. Without a website, you are less than nothing in the market. The internet is the best way to approach the customers. Potential customers can look at the products and decide what they like in the peace and quiet of their homes and then come to my store or order for delivery. Likewise, without a brick and mortar store, you lose at least half of the customers, because there are many people who want to take a look at the actual product.
Do the people who come to your brick and mortar store also visit your online shop, or are those two different groups? Also, are there differences in what customers buy online or in-store?
There is only one group, and they use the internet AND come to the store. I used to have three brick and mortar stores, but I closed two of them because there was no point in running all three. Now, one store serves as showroom and store and everything. I think that less than 10% if people come to my brick and mortar store without looking at the products beforehand on the internet.
In many markets, e-commerce is booming. What is the situation in Macedonia, and is there a lot of potential for growth in this segment?
Macedonia is no exception. People like to buy from their homes. But real growth is where the good prices are. I follow the best practices from Amazon, Ali Express, and some German sites that sell products with a very low profit margin. I am happy with lower margins, but bigger turnover. The effect is the same, and you are more competitive.
If you sell online, you basically have to compete with every retailer on the internet. Isn’t that a bit scary? How do you manage to stand your ground against this massive competition?
It is not scary to me. Not at all. There is no massive competition if you work with micro expenses. If you are the shop owner and don’t need a secretary, if you don’t need unnecessary things like a fancy office or a big car, and if you are not paying rent for expensive store locations, you can compete with anyone. Also, if you aren’t too lazy to chat with China or the US every morning and order directly from the source, you will get 50% lower prices on nearly the same products that are offered by EU distributors – who are mostly repacking Chinese products anyway. And yes, you have to be patient enough to cut expenses for expensive fast airline cargo services and use slow sea transport instead.
Competition is a problem for people who are used to live in comfort and who must pay salaries, social insurances, and transport costs for employees at unnecessary working places. Competition can’t stand it if you have good cost effectiveness. Many colleagues are speaking against lowering the prices. I say: If I can fly from Skopje to Hannover for 10 EUR with a low-cost airline, why do I have to ask for 50 EUR for vibrator? For me, it is simply illogical to demand 50 EUR for a simple vibrator when somebody charges you 10 EUR for a two-hour flight.
Macedonia wants to become a member of the EU and NATO. What would that mean for your country? Do you expect a great economic uprising?
I don’t have time to wait ages for the Macedonian economy to rise. I have a different plan. The very first day when Macedonia becomes a EU member, I will start selling my products online everywhere in the EU at the same prices as Ali Express or cheaper, and we will ship faster than Ali Express without custom taxes because Macedonia will be in the EU. This is going to be a great opportunity for me. I’ve always loved working with foreign customers.
I was not eager to do this before some German sites started to beat the prices. But now I am saying: OK, let’s play. Macedonian salaries are much lower than German salaries, so we can work with lower-paid workers and be competitive in the adult retail business.
And how would these changes affect your business in the long term?
The business will grow, but nowadays, you must be aware of potential crises and be careful not to move forward too fast. That could cost you nerves, money, and health. A good night’s sleep, sun, and peace of mind – those are the most important things in life.
What are your plans for the future? Could you imagine opening a second store in Skopje or in another part of Macedonia?
No. There is no need. I already had three stores, and I closed two of them down. The next move will be expanding my business beyond the borders of my small country with an online presence in the EU. I don’t understand why there aren’t more small, well-focused, and strong companies from Bulgaria, Croatia, or Slovenia selling products in the EU? You can have companies in those countries and run them with fewer expenses, and you can still sell products everywhere in the EU. Of course, there is the question of how to reach this market without expensive advertising, but I strongly believe that affordable retail prices do matter, and that they can compensate for a lack of advertising. Provided that you are patient enough to cultivate and keep a good image, of course.