Funding case study: from zero to hero
The Green Gem Shop Success Story
Case Study Background
Keep Hanoi Clean (KHC) is a social enterprise located in Hanoi, Vietnam. Founded in 2017 by a long-term American resident, KHC’s mission is to promote Hanoi as a “green gem” for sustainable living in south-east Asia through the provision of education, leadership, grassroots collaboration and promotion of a green lifestyle.
Most social enterprises in Vietnam begin life with financial support from large Non-Government Organisations (NGOs), so cash flow for funding staff and program activities isn’t a problem. KHC didn’t have a funding body; instead, staff were volunteers and in the early days, we raised money via various sources including English classes, raffles, selling food at markets, and GoFundMe style fundraisers.
None of these addressed the issue of a long-term and reliable source of funding for KHC.
How It All Began
Keep Hanoi Clean had always held garage sales every month or so on the first floor of the office. Items like clothes, shoes, bags, accessories, household items and the like were donated to us to sell. People would come in and rummage in the boxes for a “hidden gem”.
While we promoted the garage sales mainly through the KHC Facebook page and group – which had more than 12,000 members at the time – the garage sales weren’t held often enough, and we didn’t have sufficient variety of donated goods to make a significant amount of money.
As word about our garage sales got out, more and more people donated their pre-loved – and sometimes new or near new – goods to us. Westerners in particular gave us many items when they left Hanoi for their home countries or new jobs in other parts of the world. If people couldn’t sell or give away their items, donating to KHC was cheaper than shipping. The fifth floor of the office was transformed into a storage space for donated items.
In 2019, things took a turn for the worse. KHC had a dire cash flow problem that needed solving quickly. We were in danger of losing the office and, worst case scenario, the social enterprise folding. A second-hand shop that also sold eco- and lifestyle products had always been planned, so this plan was moved forward to try and bring in some quick wins to ease our money worries.
Green Gem Shop (GGS) was born to ensure that KHC had a sustainable income for its projects and activities over the long term.
What We did
To overcome our pressing cash flow issues, we rented out the first floor of our office building to a cosmetics business, and the third floor to a private tenant. This halved our rental commitment and instead of having to find VND 14,000,000 per month, we only had to come up with VND 7,000,000. We moved the garage sales permanently to the second floor and turned this level into a shop, which was open every Sunday from 10AM-4PM.
In November 2019, we rebadged Keep Hanoi Clean Garage Sales to Green Gem Shop to build up the brand in a separate but linked way, and to differentiate KHC’s non-profit activities from its for profit activities.
GGS regularly brings in VND 7,000,000-10,000,000 per week—more if we sell at local markets.
How We Did It
In the first instance, we put a call out on Facebook for more donations to build up our stock, and we received overwhelming support from the community in Hanoi. We attracted regular Vietnamese clientele from the local neighbourhood who loved a bargain, and Western customers who couldn’t find clothes to fit and missed thrifting. We held regular sales to build up awareness and generate quick wins in terms of income.
In the beginning, GGS was staffed by “on staff” volunteers — the Chief Operating Officer, the Communications Director, the Founder and the Accountant — depending on availability. When we had stalls at local markets, we had to close the shop because we didn’t have the people to remain open at two sites. We raised awareness with new customers, but we had to disappoint our regular clients.
As GGS “proof of concept” appeared to be working, and the shop became busier as word got out, it became clear that we needed to not only find more staff but to also roster them. We recruited local Vietnamese university students — whose English was good — to remove any potential communication barriers. We wanted to be known as an organisation that paid its staff fairly and on time — unlike many Vietnamese businesses — so we drew up rosters and had staff sign in and out for accounting purposes, and on-boarded them properly.
We had a sufficient pool of volunteers to help with sorting as the donations increased, and we thanked them by allowing them to choose an item they liked from the shop, and provided refreshments free of charge. And on market days, the shop stayed open so we had sales across two sites.
As well as selling pre-loved clothing and household items, we wanted to test the market to see what worked for the eco-products, so we approached vendors who had sustainable production practises and asked them to support us with a “stock now, pay later” model. We were open about the fact that we had no money but they were keen to help because of the KHC brand, which had generated strong awareness and loyalty with the Hanoi community via clean-up events and regular media coverage. In this way, we stocked:
- metal and bamboo straws, and cleaners
- bamboo toothbrushes and pens
- Refill Hanoi reusable bottles
- upcycled bags and notebooks
- takeaway sugar cane containers
- reusable shopping bags.
Some donated products were not able to be resold for various reasons, so GGS paid it forward by giving these to other like-minded organisations like homeless shelters and animal refuges.
We priced our eco-products competitively based on the market, but to make a profit after we paid our suppliers. With the Refill Hanoi bottles, we added on an extra 20K as a voluntary donation, bringing the purchase price to 100K, which people were more than happy to pay. Initially, most clothing, bags, shoes and household items were priced at 10K because we wanted to bring people into the shop and earn some quick cash and build up brand awareness. People bought 10 or more items this way because goods were so cheap, and some customers would spend 200K in one hit.
One year on, we have niched down on our lifestyle and eco-products, expanded the range according to demand, and we raised the price of clothing to sell most items at 30K. It’s still cheap enough that our customers feel like they are grabbing a bargain, but a sufficient enough margin that we make a decent profit on our donated items.
Most of the initial GGS promotion was done via Facebook. When GGS created its own brand, we developed a logo and created a Facebook Page and Instagram account. We took many photos and created videos so we could share to the main Facebook groups where our target customers could be found. We held regular themed promotions e.g. buy a reusable bag and fill it for an extra 50K.
We also took the view that we would go to our customers, rather then wait for them to come to us, so we organised a pop up shop at a popular local cafes, we had tables at popular markets (and still do). Markets were great for visibility, and we could talk to people about the shop and give them an information brochure. Market organisers invariably gave us a table for free, because association with KHC and GGS was good for their business too. We worked on boosting our presence on Google by writing blog posts for the KHC website, and we made it to Page 1 for a number of target keywords.
GGS has gone from strength to strength and is looking forward to continued growth. We have:
- Hired a manager to oversee the running of the shop
- Opened more days and hours, and hired more staff
- Improved and streamlined our systems and workflow
- Refurbished the shop for a better customer experience
- Explored other sites for a second shop
- Been approach by the media to consistently tell our story
- Considered GGS having its own website, with an online shop.
The shop is now a recognisable brand in its own right, and local markets and media, schools and other volunteer organisations are keen to work with us when they have fairs or fetes.
And best of all, GGS has created a sustainable income source for KHC in just over 12 months.
Where to Find GGS
If you are in Hanoi, you can visit Green Gem Shop at 2nd Floor, 587 Lac Long Quan Street, Xuan La, Tay Ho, Hanoi.
You can check us out at the links below:
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Image credit: StockSnap from Pixabay