Your Friendly Neighborhood Pen Shop: How Phidon Pens and Shopify Capital Took a Local Favorite to the Next Level
No one knows the value of a good community more than people who’ve left their home. In 1988, with $300 to their name, that’s exactly what Baldeep and Mano Duggal did, immigrating half a world away, from India to Canada.
Finding their niche in the community was a struggle at first but they embraced their new home and country. Baldeep eventually opened his own accounting practice, but felt there was something missing. One day in 2007, after attending a pen show, Baldeep came home and said to Mano, “I want to open a pen store.”
Naturally.
The result was Phidon Pens. Though the store is thriving today, 2007 was a strange time for exploring a new career. The Duggals were paying for their daughter’s college education, and when it came to market research, “there were no numbers,” says Mano. “There was no data available for a pen store.”
But the Duggals knew they wanted to open more than a pen shop. It was going to be an outlet for their community-centric passion and a way to give back.
Ask Mano what the couple’s store sells and you might expect the first answer to be pens. “The pleasure that has come from this business in the last 13 years…the clientele we have built, the community we are part of, the things we have done via Phidon in our community does not equate to a bonus check,” Mano says. “It’s just a beautiful business.”
Phidon was more than a store. It was a local destination. A place to check in on old friends. And together they built the business with their own money and passion, they never needed startup capital.
Then in 2020, the COVID-19 pandemic hit and shutdowns threatened to take it all away.
Scaling a traditionally stationery business without losing its hometown charm
Tying a business to its community can be a double-edged sword. Phidon Pens attracted customers and turned them into friends. This approach helped create repeat business and loyal customers.
We’ve seen customers who have dated, got married, had a child. We’ve seen people who have lost a parent, or a dog, or had an accident…I feel humbled that they made me part of their story. We are now trying hard to connect with our online customers the same way.
The problem: traditionally, this style of business has a short revenue ceiling. And local appeal doesn’t always translate online.
The Duggals’ approach to inventory often meant buying only two of each pen model at a time. In the physical store, Mano found she didn’t need more than that. If a pen was no longer in stock, the customers simply didn’t see it. But online, this approach meant that buyers would quickly face out-of-stocks.
Before COVID-19, Baldeep and Mano were building a community legacy that went beyond pens, beyond business success. But the pandemic threw a wrench into everything. How could they achieve financial success or community success if their shop wasn’t open? And how could they solve these inventory problems?
The small-town touch, at scale
On April 2, 2020 after just two weeks of work, Phidon Pens opened its web store. “Shopify made it so easy for us to go online,” says Mano. “I’m such an analog person. But learning Shopify was so easy…. Any time we had some troubleshooting problems, Shopify would get back to us.” To Mano, Shopify’s approach mirrored her own. She was on a first-name basis with the rep from Shopify.
I don’t think I sell pens. I’ve always said I sell an experience. I hope people feel that way when they’re shopping online with us as well.
Setting up the online store went smoothly. And to Mano’s surprise, the business managed to retain all of the personal touches that made Phidon Pens a local hit. She still sends out thank you notes in online orders, including notes she writes herself. “I want someone, whether they made a $50 purchase or a $500 purchase, to feel good when a package arrives,” she says.
The approach works. One package brought more awareness when a customer posted it on Reddit. Now, customers even send her messages, wondering which colors she used to pen the thank you notes.
Scaling with Shopify had surprising effects. Rather than making the store less personal, it brought Phidon’s personal approach to more customers.
When one new customer, who had spoken to Mano on the phone, purchased a Mother’s Day gift for his wife, it had a lasting effect. The wife called Mano and said, “To me, it’s really important that this came from your store.” Mano was blown away by the new connections she was making online. “I don’t know her!” she says. “I’ve never met her.”
Cruising through capital without a worry
In the early days, the Duggals struggled to gain traction—adjusting to a new country, finding a job, starting a business. At that time, securing capital for their store seemed like a distant dream.
Their success with Shopify changed that. One day, their increase in sales meant they were eligible for funding from Shopify Capital. This took Mano and Baldeep by surprise but saw it was a vote of confidence in their business. They immediately knew how this boost of funding could help scale their business, and were confident that they could pay it back.
Just two days later, the funds were in the bank. The capital proved to be a boost for Phidon, allowing them to invest in more inventory. The challenge of out-of-stock alerts on its website vanished with increased inventory they were able to buy with their Shopify Capital funding. The Duggals went on an order spree, building up supplies to meet wider demand.
With new customers surprised to see the level of personal detail Mano gave to every order, Phidon found itself facing a new opportunity: the possibilities of business at scale.
New opportunities through new capital
With new capital, the Duggals solved their inventory problems—without losing the community-level charm that made Phidon special in the first place.
Perhaps more importantly, Phidon Pens now had the capital to scale to meet new demand. Seeing how well people were responding to their online presence, Mano reported that she and Baldeep took on a new attitude: “We were like, ‘OK, let's do it. We can scale up.’”
With their cash flow increasing just as quickly, they had no problems paying back the Shopify funding. Soon they were eligible for a second round—which offered even more funding. “When we took the second round of capital, we were ready for it,” says Mano.
With the capital to handle the demand on inventory and Shopify in place to help handle fulfillment, sales have significantly increased over the past year. Mano and Baldeep sustained their business, grew their online collection, and stayed true to their mission.
We always want to make sure Phidon can do well enough [in sales] so we can do all the things we want to do in the community…I couldn’t have done what I wanted to do without Shopify Capital’s help.
The Duggals are setting fresh goals now, looking for growth of 10% and higher, without losing what made them special in the first place. As for Mano, she doesn’t have any plans on giving up those thank you notes any time soon. And her customers wouldn’t have it any other way.