Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / How to negotiate margins & equity + reduce your unit costs with blanket orders.. The stuff no one tells you in beauty with Freck Founder Remi

Transcript

How to negotiate margins & equity + reduce your unit costs with blanket orders.. The stuff no one tells you in beauty with Freck Founder Remi · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:00
  This is Remy for Female Startup Club. Hey everyone, it's Dune here, your host and hype girl. Today we're learning some serious stuff about the beauty industry from Remy, the founder of Freck.
• 0:24
  Now let me ask you something. Do you know what a blanket order is? I have done over 200 episodes and this has never come up. So if you don't know, welcome to the club. Prepare to listen to this episode and pick up some nifty tips to reducing your unit costs. We also cover negotiating your margins and some know-how around fill rates in the industry.
• 0:51
  It's also highlighting some of the epic, epic fails that Remy persevered through to get the brand to where it is today, stocked on the shelves of Sephora, ASOS, Revolve, and the likes.
• 1:03
  Let me just say that Remy is the entrepreneur we all need to learn from. She is absolutely a 10 out of 10. Freck Beauty is a clean beauty brand inspired by Remy's hunt for the perfect freckle. During her years of R&D on what ultimately became the world's first freckle cosmetic, Freck OG, she found that there wasn't a bold beauty brand that represented everything from moisturizer and go to blue flame eyeliner energy.
• 1:31
  After launching with Freco G in 2017, which quickly took the internet by storm, Remy connected with Des Wilson, now the company's COO. Together, Remy and Des have since expanded Frec Beauty into skincare with the Cactus Collection and Color Cosmetics with the Cheek Slime range.
• 1:49
  And one last thing before we jump in, if you aren't on the receiving end of our Monday email, I highly recommend popping your email into femalestartupclub.com to keep in the loop with industry news, insights from the show, job opportunities with female founded brands, and some other cool bits and pieces. Let's get into it. This is Remy for Female Startup Club.
• 2:12
  Remy, hi, hello. Welcome to the Female Startup Club podcast. Thank you so much for having me. Excited to be here. I'm so excited to be here. For anyone watching on YouTube, I have my Freck Beauty Eyeliner on in blue, which I'm very happy about. And I'm super excited to have you on the show today. For anyone who doesn't know you, can you give us the elevator pitch on who you are and what your business is?
• 2:37
  Yeah, totally. Well, thanks everybody for having me and thanks for the listeners. Thanks for dude. So I am Remy. I'm the founder and CEO of Freck Beauty. I am born in Seattle and my why is just, I wish there was a better story for this, but I have always wanted freckles. And so Freck Beauty came into the world as the hunt for the perfect freckle. We came, we launched this one skew,
• 3:02
  And the brand was just called Freck and the product was called Freck. That was it. And it was a very unconventional way to do it. And it is the world's first faux freckle. And since then, we've grown into clean beauty, clean skincare and recently launched at Sephora. Oh, my gosh. How fun. It's so funny. Like that. Yeah.
• 3:24
  notion of like, you always want what you can't have. Like I'm obviously someone with freckles and I am like going to the place being like, Hey, can you like even out my pigmentation? I know. Yeah. It's crazy. I love it. Yeah. When, when I launched, um, I launched first with a Kickstarter and it was like, frankly, it was in 2015. And I think it was before the industry was ready to embrace, you know, natural beauty and, and, and,
• 3:48
  quote, I'm air quoting, if you're listening, air quoting flaws or, you know, skin texture and all that stuff. And this was at a time when, you know, hyperpigmentation, laser treatments, like all that stuff was really at the top of its game in 2015. And as well as, you know, heavy full coverage foundation was still the thing like glossy, I think had just launched. So like no makeup makeup was like starting to trickle in, but I don't think the industry was ready yet. So when we launched the Kickstarter, I was like,
• 4:17
  It was unsuccessful. It failed publicly, which was really embarrassing, obviously. But also, I got kind of dragged for this idea. Everyone was like, who wants freckles? It's crazy. Like, nylon, a bunch of big publications that I really looked up to and respected were like, this is what is this crazy girl doing? So it's really awesome to see where the industry is now and people like yourself embracing our freckles. Yeah.
• 4:41
  Totally. Why did, why did the Kickstarter fail? What do you think went wrong about it in hindsight? I think it was too much money. Our goal was $215,000, which like has been done on Kickstarter. You know, there are Kickstarters that have made millions of dollars, but they, I think the trick, if you're launching on Kickstarter, one of the tricks that I would have taken away from that is to set your goal as low as possible and maybe, you know,
• 5:09
  At the same time, have some like if you're able to do a friends and family round or maybe like, you know, if this is a proof of concept and people are interested in it, maybe I can get some funding to like back it up. But, you know, once you do a Kickstarter, if you are successful, you have to fulfill all of the orders that your backers make. So I think that the amount of money was too high. I think that it was a little bit too early. I think that.
• 5:32
  That the other thing about Kickstarter is if you we raise like twenty two thousand dollars like right out the gate. But then I think after a couple of days, if your Kickstarter hasn't funded, like funded almost immediately, people don't want the responsibility of like checking their bank account to make sure their money got back. You know, so I think that in reality, the lifespan of Kickstarter is like a couple of days. So you really have to prepare for that. And I didn't I really had no idea what I was doing. I was kind of like firing at the hip. So I was looking at it like, oh, I had 30 days.
• 6:02
  to reach the finish line when in reality, it's, it's very short span of time.
• 6:07
  Because like the algorithm will kick in then by the way, by the, by the sounds of it and kind of like promote you on their own website and that kind of thing to keep that momentum going. I assume. Yeah. The algorithm. And then I think just like consumer behavior, they don't want to put their card in and, and check if, because the money gets withdrawn from your bank account as the backer, as the consumer. And then if the Kickstarter doesn't fund, it gets returned to you. So that whole process, I think is something a little bit clunky about Kickstarter, um,
• 6:36
  itself, which is something that maybe they've addressed since then. I don't know. But thankfully it didn't fund. That sucks so much because 22,000 is like, it's not nothing, a great amount of money. Yeah. But still good. Like it gives you like that confidence of like, wow, you know, I still got $22,000 here. And that's such a sad like moment to be like, I know. And then, and then poof, it goes away.
• 6:58
  You're like, oh, it sucks. But so should you have set the goal is like 10,000 or 20,000 so that you would have like definitely got there and then gone from there? Yeah. Well, I think it's I think it's a two edged sword, right? You need to have the amount of money to fulfill your manufacturing needs.
• 7:17
  which I'm really, really thankful that the Kickstarter didn't actually work because the product that I was trying to launch with, while it was the same concept of giving you, you know, long wear faux freckles, it was not the right product. And I ended up pivoting and simplifying so much that by the time I went to actually launch, I only had to get 15 grand. So that's the other part of it.
• 7:41
  Wow. Okay. So I could have done it, but with the product that I would, if I had launched that product and had to fulfill all those backers orders for that freckle kit, I don't think the business would have been successful. So actually it was really like, it was a great thing that happened, even though. It's a blessing.
• 7:58
  It was a huge blessing, but you know, and then also all the publicity that came out of getting dragged like they literally Jimmy Kimmel took the Kickstarter video and did like a two minute spot on his show live talking about freckles and then like Guillermo comes out and he's got his freckles on and Jimmy's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like, what do you think about your freckles and he's like,
• 8:16
  And grandma was like, I like them. And Jimmy was like, I don't know. So it was like a whole thing. So but that was also a blessing, even though it was definitely, you know, a little bit of a little bit of a stab because then people started following us on Instagram. So when we finally launched, you know, we kind of had a little bit of a network already built in. So long story short, it was a rough couple of first years.
• 8:40
  Yeah, that sounds bloody rough for one. My God. And does that mean like your opinion on all press is good press kind of thing is like correct? Or what do you think? What's your approach on that now? Um...
• 8:55
  I don't know. I think, yeah, all press is good press, but I don't think about press so much, to be honest. Like I really, you know, I'm such a like weird talker. I definitely go in circles. So thanks for keeping up. But the part I didn't say about my elevator pitch of myself, you know, I think every founder has a really like beautiful and unique story.
• 9:18
  about how they get to the point, like the precipice of their business and why they started. And everyone's is unique and wonderful. But I think you hear a lot of this story where people were in the beauty industry, specifically within beauty. I'm not sure about other industries. They were in beauty. They saw a hole in the market or like they they have a personal relationship with clean or something like that. For me, I was actually an interior designer.
• 9:44
  And I was working like three full-time jobs. I was doing design for a designer. I was doing freelance for my own clients. And then I was also working sales to like actually make money to pay for Freck. At the end there, I was working three jobs. But when I started, I was just an interior designer. And the genesis for Freck is really product driven. Like I just really wanted freckles. If you look at my drawings from when I was a child, like growing up in Seattle without any freckles, like the sun has freckles, the plants have freckles. And I just love freckles.
• 10:14
  That is so cute. Now that I live in LA, I have a couple of freckles. Also, because as I'm getting older and I have, you know, some hormonal stuff going on, I have melasma now. So my pigment has changed. But I always, I never had freckles and I always really wanted them. But yeah, so really...
• 10:33
  The why of Freck is super product driven and brand driven now. But in the very, very beginning, it was just like, I really just want freckles. And I knew that my like close knit group of girlfriends and guy friends too in East LA were kind of like, yeah, I would wear freckles. And so that kind of gave me the confidence to like kick it off. And I love that because I think it's like sends the message that, yeah, you can have a really niche idea and just start with that one thing that you want and your friends want
• 11:02
  that isn't this kind of like mass thing, but then grow it into products that can be really for everyone and add to it. But like, you can start with, you know, something that is a bit more niche to get going. Yeah. Love it. I mean, it's hard because people don't understand it, but it's definitely, it's fun and it's totally doable. What year are we talking when the Kickstarter kind of thing goes to shit? The Jimmy Kimmel stuff is all happening.
• 11:29
  When are we talking? So that, I started working on development in 2014. 2015, end of 2015 was the Kickstarter. And then...
• 11:40
  I took a little, took some time off to rest after the Kickstarter. And like, I think three or four months later, I kind of picked myself up by bootstraps because obviously that's embarrassing, right? Like you're just kind of like a little bit wounded after that. And I got back to it, found new manufacturers, new labs with different and lower minimum order quantities and kind of.
• 12:03
  Started again completely with a totally different manufacturer and then officially launched the brand in March or May. I always get that mixed up 2018. So it took another year to kind of like pick it back up and move it and and see where it finally came into its final form, which is still the same product that you see today for Echo G. Got it. Got it. Got it.
• 12:25
  And so for the second time around, I always love to ask about like the money stuff. How much did it cost you to launch? What did you need to invest? And in the scenario where the Kickstarter failed, how did you then fund that in the beginning? Yeah.
• 12:38
  Yeah. So I'll go like quickly over this and then you can let me know like where you want to get. Because I could I could literally talk about investing for like and what not to do in investing for like an hour. So I want to hear the what not to do for sure. I know. Right. So I.
• 12:55
  From the Kickstarter, right, because I got so much publicity, this man, I was introduced to this man who had background in consulting for businesses and just advising, like marketing consultant, but just generally, like, you know, helping businesses get off the ground.
• 13:12
  And he came to me and he was like, I think this is a really good idea. I'm sorry, your Kickstarter didn't fund. So we got dinner and he was like, I would love to help you. And I'm kind of the kind of person where external accountability is really good for me because I can really go too deep into something that really probably doesn't actually matter, but I get fixated on it.
• 13:36
  I have like, I definitely am ADHD and then also have like hyper focus issues too. So it was really great to have somebody to kind of check in once a week, just be like, how's it going? What's like, what's up? He ended up introducing me to my, to his brother, excuse me, who had a, was very, very well off, owned a fast food chain in Southern California. So he was doing very well. And he had passed on Beauty Blender.
• 14:04
  Beauty Butter had come to him in the early days and asked him to invest and he passed on it. So he was like really trying to get into the beauty space as an investor. So he ended up investing $15,000 in the company, which was enough for the first run of production. And I gave them and like everybody listening is going to just jump out of their seat. I gave the investor for $15,000, $15,000, 10% of my company.
• 14:34
  And the other brother for like a finder's fee, another 10%. So I gave away 20% of my company for $15,000 without any sort of vesting structure or anything. And it just like really was not the right fit. The launch was successful, but like the relationship between us kind of soured because I wasn't able to
• 14:56
  put in enough time to really grow the business. And I had, like I said, I had three full-time jobs. I was literally working one job to support Freck as well. And so I ended up buying them out at the end of 2018, which is the year that we launched and regaining full control of the company going into 2019, which was really special. And I spent every single dollar that I had in the Freck bank account and in my personal bank account to get them out because I was like,
• 15:24
  On principle, I was just like, I have to like, if this fails, like I want it to fail. Like I want to, I want it to be mine. And I want to make sure that I'm able to do everything that I feel like I can in order to make this project successful. But also at this point, as I was going into 2019,
• 15:43
  I remember having this moment where I was sitting outside one of my jobs. I was just like dead tired. I had woken up at, you know, six in the morning to pack up orders, drop them at the post office, then get to my job by nine. And I was sitting in the parking lot. I had parked my car and I just like remember like putting my head against the headrest and just be like and just be like, you know what, Remy, I'm going to give you six months. You get six more months because I've done all of this up and down, up and down, you know.
• 16:06
  The Kickstarter, funding, all of that, you know, it takes money to build out a Kickstarter. Then getting back up and having to buy these investors out and just, you know, it was pretty emotional. And so I was like, you know, I'm going to give you six more months. And then if that doesn't work like you and do and go hard, do everything that you can as a completely unseasoned business owner who had no idea what I was doing at the time. You get six more months. And then after that, you got to like.
• 16:30
  walk away because you can't put your entire life on hold for this concept. And that that moment really was when shit kicked off for me. And things that are already kind of like doing, you know, you're generating sales and stuff at this point, right? Like you're shipping orders, like people are interested in what you're buying. You've already got the community from the previous thing. Mm hmm.
• 16:52
  So what was kind of like furthering the spread of the word and like what changed in that six months that allowed you to keep going and decide like, yeah, this is on, I'm doing this. Yeah, yeah, totally. So the other thing, so we had this crazy spike of sales when we first, you know, launched and that was all people who, you know, basically I think our Instagram was like four or 5,000 people who had stuck around for, and like,
• 17:20
  Can you imagine the brand loyalty of somebody to stick around for two years waiting for some like mystery product to launch? And I would just get messages on Instagram like once a couple of times a week being like, where do you have any like back stock of your product, anything that you can send me? So that like really helped me keep going. Right. So I'm literally so thankful for the community that first like couple thousand people.
• 17:42
  But we had a great like first launch day. The product is Freco G is about like half the size of your pinky. It's maybe the smallest cosmetic product in the world. I would venture to guess. And that's the full size version. But it lasts a really long time. Like it.
• 17:59
  I've never actually personally run out of a tube of Rec OG. So obviously we had this great first hit, but then I had no focus on marketing because I was so focused on fulfilling orders and trying to figure out operationally supply and demand planning, placing new orders, making sure that we don't run out of inventory, stuff like that.
• 18:19
  So after the first spike with pretty much no interest or not interest, no time to focus on marketing, it tethered. And I remember there were days where I was like, so excited that we hit like $90 in sales on our website. Like that's how small potatoes it was for from the launch in March or May until the end of the year. It was like $30 to $90 in sales a day, you know?
• 18:44
  But what happened in the six months that I think really escalated the business is I had this kick in my own butt where I was like, okay, so you've done all of this. You've already like publicly failed enough times where it's like, just go balls to the walls, like do everything that you think might work, like throw the spaghetti at the wall, see what sticks. Yeah.
• 19:05
  So I started reaching out to influencers and this is again, 2019, it was a different kind of space. Influencers had not really figured out like how valuable they were at the time. So I, and I didn't, and I didn't either. And so I reached out to a couple and I was just like, I really love your creativity and I would love to send you some product like with no attachment to it whatsoever. And they're like, Oh yeah, I would love to kind of see about your brand. And this one girl who I will forever be indebted to,
• 19:33
  did a giveaway. Like I sent her two and she on her own, her name is Sarah on the internet, on her own, she was like, I'm doing a giveaway with Freck. Go follow Freck and you're like entered to win one of their Freckle pens. And we like grew 3000 followers overnight. And I was like, oh, okay, so marketing.
• 19:51
  Wow. Like it was like that. And then from there, like it just I just kind of like started trying to think outside the box and outside of what I educate myself and start listening to podcasts and all of the things like it did everything not only externally like like consumer facing, but also to educate myself and grow and learn a little bit from the beautiful community that already exists on the Internet. Like what, though? What were the other things?
• 20:16
  Oh, um, let's see. Like for anyone listening, who's an entrepreneur, probably in that like solopreneur space where they're in that, you know, trying to figure it out. I need to throw spaghetti at a wall. What would you recommend? Yeah. Well, okay. You have to think about right now. It's a different climate than it was back then, but I would dive deep, deep, deep in the TikTok. Like I wouldn't even mess around on Instagram. Honestly, I would just go TikTok and find, um, yeah.
• 20:45
  find your specific thing. I actually was just recently in a meeting with TikTok because I'm trying to figure it out for myself. And they're like, be super specific about what you're talking about, especially if you're a brand. So like you could literally go on every single day and like say it's Freck,
• 21:01
  Freck OG that I'm talking about on TikTok. I could go on every single day and talk about freckles and be super and like freckles and blush and do the same thing every single day. And some of the videos hit and some of them don't. You have to be super authentic and like unfiltered and you have to drive the same like same product, same point in over and over again. And that's how you can build a really great audience on TikTok. And then, um,
• 21:27
  From there, you can obviously branch out in the kind of content that you're creating. But as far as like kicking yourself off on TikTok, it's better to stay super focused or that's at least what.
• 21:38
  Anne at TikTok told me. Good old Anne at TikTok. I know. I actually met her for the first time because we had a launch event for Freck Beauty. And it was just so fun to meet people in person, like finally, after all of this craziness and COVID. But the other thing about TikTok, that is what Freck has experienced so far. So we're just starting trying to build out our own audience on TikTok. Yeah.
• 22:02
  And that's important, but even more important than your own page on TikTok is other people talking about you on TikTok. And as a brand, that is way more valuable than your own page.
• 22:14
  Because it's like authenticity. It's, you know, those are the videos that are more likely going to get viral because it's, that's what people are looking for on TikTok. It's like, they don't really want to hear from a brand. And of course you can have great, huge gains on TikTok as a brand that can happen, but it's easier to get your foot in the door by gift. Like honestly, the same things that I just talked about for Instagram, but now it's TikTok. Got it. Got it. Got it.
• 22:38
  And what else? Oh, the other thing I would say, like if I were to go back to myself in those critical six months, I actually brought on a business partner as well. And she's my COO and head of sales. Her name is Des Wilson. She's also my best friend and already was my best friend. And I'm the...
• 22:54
  godparent to her baby. Like we're so close, which probably was kind of a crazy decision to make. But again, I was just trying to figure it out. Her background was in distribution for wholesale fashion. She ran a showroom and I already like knew her work and respected her so much. And she, again, like the accountability of us together was really helpful for me as a person. And I think
• 23:24
  But also we were able to kind of like divide and conquer. And I was able to kind of give her some of those like supply and demand issues and keeping things in stock and making sure that things are like moving along. Meanwhile, she's trying to grow our our distribution in Europe because I knew that we had a strong audience in UK.
• 23:43
  And that allowed me to free up some time to focus more on marketing initiatives. So I don't think everybody needs to get a partner right out the gate. It definitely can be done without one. But I had learned everything that I had learned from those investors. I then was like, OK, five year best schedule, like, you know, all of those things. And how did you like value the business at that point then? Because obviously, first time around, you've given away 20 percent, which what does that equal, like 50 grand or 50 something thousand? Fifteen. Fifteen.
• 24:11
  No, but what is it? Oh, yeah. Valuation is like, I see. I see. Minimal, right? Yeah. It's like 45 grit. Yeah. Whereas this time around, you are probably well versed in negotiation. You know what not to do. Yeah. But it's a friend and someone that you truly care about and you want to entice them into the business and make it worthwhile. So how did you find a number? And if you're happy to share, what did you land on? Yeah, totally. No pressure.
• 24:37
  No, no, no. Des, if you're listening, hope you're okay with this. So she kind of came in. She came in strong. She was like, well, I was thinking 40, 60. And I was like, I was thinking not that. So, but you also have to like backing it up. You know, again, we're making like $60 a day in sales. She was getting X percent of nothing. Like it was enough. It was an idea, a potential of a business. And she had actually...
• 25:03
  followed the brand, um, out before we knew each other from the Kickstarter days. So she was very, you know, she knew like kind of where the, she could see the little nugget and she was like, I'd be down to like figure this out with you. Um, so what we ended up landing on if, if she was not my friend, I think I would have, um, offered her 10%, but because she is my friend and again, like, you know,
• 25:29
  10% of nothing. Like it was a lot of sweat equity. Like it was a lot of sweat for the equity and it was unpaid. Um, so we landed on 20% vested over five years and we didn't start paying ourselves. We were both working our separate jobs. Um, so she came full time and was able to finally leave her positions at the end of 2019.
• 25:53
  I think beginning of 2019. So, yeah. So that's how we ended up. And with a deal like that, for someone who's essentially in the distribution side, so sales, are they, or not necessarily her, but in general, are they incentivized by the commission structure as well as, or is it just like the 20% and that's it?
• 26:14
  It's a great question. We did not structure it that way. I also didn't want to structure it that way because for me, it's not about going and plugging us into every single little small boutique in Silver Lake. It's about the key players and getting the right partners because running wholesale business is really expensive. Paying for somebody to pack it up, even if it's someone who's big, but not that big, like
• 26:42
  I won't say the name, but one of the retailers that we work with, we realized that we almost were making no money because of how...
• 26:50
  intensely you have to pack out the order. You know, it's like bottom label, poly bag, stick it, another poly bag. Then you need to put 50 into a case count, poly bag that, then pack it up. It's like, and every single retailer has a different, uh, it's called a routing guide. So every single person has a different routing guide. You have to have somebody who knows how to pack all that out. It's super expensive. It's super time consuming. And then also you have to think about what's your margin with your retailer. So, um, yeah,
• 27:17
  That we realized that later, but in the beginning, I didn't want to structure her based on commission because I was like every single dollar needs to go back into the business to grow it. So frankly, if you're looking at this like a commission structure, like you're not going to be the partner for me because this is this is not a one year. Let's make some cash. This is like five, 10 year long play. And then let's make some cash.
• 27:40
  Yeah, 100%. That's so interesting about the routing guide. I haven't heard that term before. I don't know if that's just beauty or if that's across the board. And you're also in so many cool retailers, like all the cool ones I think I saw, like Urban Outfitters, Sephora, ASOS, blah, blah, blah, all the great ones. Yeah.
• 27:58
  When it comes to that kind of thing, what else can you share that entrepreneurs might not know about when it comes to that kind of like nitty gritty logistics and operations side of things? Mm hmm. Okay. Oh, and my other question around that was, did you have to change your pricing because you realize the margins and the additional expense to like pack everything and all that kind of stuff? Mm hmm.
• 28:24
  Yeah. Well, OK, so first off, the first thing that I would absolutely tell anybody is that the margin is negotiable. So you can go back to Revolve and say, OK, so they're like, we want to pay you, you know, 45, like our margins, 55. You can go back to them and be like, that's really not going to work for us. We're a small business. You know, our price point is accessible. We like to keep it accessible. We need, you know, a 50 percent margin.
• 28:52
  whatever it is. So that first off, I didn't realize that until way later. I had no idea. So if you are like starting to build out your wholesale business, just know that. That's a good one. And then I would also recommend when trying to, it's kind of, this depends on the size of your team, right? When, when we started building out our wholesale business, we were literally packing our orders out of my kitchen table.
• 29:14
  And then we didn't get a 3PL, which is the company that knows all the routing guides and warehouses your product and packs it up for you, both for wholesale and DTC until right before we launched with Sephora. And that was a year long process to find the right 3PL partnership. So if you're at the stage where you're still packing up your orders, make sure that you get that routing guide. And that's a cross. And that term is kind of a cross. Well, at least for fashion and beauty, it's for both.
• 29:40
  Make sure you get that routing guide and read it and understand the labor that's going to go into it. And if you can even take that on, depending on your team and where and like where is where is your business and where is the best buckets for you to put your ROI, like your time? Is it packing orders or is it building out marketing or like what what is it? You know, it's always an issue of bandwidth.
• 30:00
  So get that routing guide, understand it, read the entire thing and know that while negotiating your margin, because that can skew your whole profitability on a wholesale side.
• 30:12
  Wow, that's crazy. What a good tip and piece of advice for all of us in the early stages of building a business. Holy moly, negotiable margins. Got it. When the day comes that you're inevitably talking to Whole Foods or whoever would be like your dream retailer, that's across, I think, all industries, but definitely beauty and fashion and
• 30:33
  The partnerships that you want to have, like our partnership with Sephora, they have been so wonderful and understanding. And it's a partnership. It's not we're selling you goods. You know, it's a part it's there's like any relationship. It's a little bit of flex of compromise. You know, there are things that we've done for Sephora. One of our products you asked about changing price points. We've never changed our price point except for one product for Sephora. And they asked us to bring it from 32 to 28. Yeah.
• 30:58
  That was a conversation we were willing to have for the overall health of the business and the relationship. But it was a huge jump because it's our hero skew. It's our FrecXL and FrecNoir was $32 and now it's $28. So you can imagine the percentage of business that that affects and that doesn't change the cost of goods sold. But it is a partnership. And I think that's something that people...
• 31:19
  You know, when you, at least for me, when I first got the call from Sephora, I was so over the moon excited because that's the dream for me. It's the, it's my dream retailer. It's my favorite place to shop in the entire world. So you want to be that, like the, the, the person, the relationship that's like, yes, yes, whatever you want, anything, anything. But it's like, they, they're used to you, you know, know your worth. Yeah, totally. 100%. It's like, they need you.
• 31:46
  Yeah, exactly. You've got to walk in there with your like, you know, your power pose on and be ready to talk shop and not kind of, you know, just give into anything. Totally get that.
• 31:58
  I wanted to ask you about your packaging. Something on the show that's been spoken about here and there is, you know, launching with stock standard packaging. And when I look at your products like Cheek Slime, which I love the name of, by the way, I've already told you that. It looks like to me that that's not a stock standard package. Like it looks like I've never seen that before. How does it like how do you approach packaging in terms of things like that when it comes to packaging?
• 32:25
  things that might not be super common and you might need to invest more and that kind of thing. Like what are your recommendations to early brand owners? Yeah. I love this question so much because so I, I, like I mentioned, my background is interior design. Um, so literally one of my favorite, favorite, favorite parts about my job is the packaging. So I love this question and I obviously have a insanely critical eye from my background in interiors.
• 32:51
  So it's hard to be like, to have, it's a blessing and a curse, right? To have the level of like scrutiny, but then also be like, we're a startup business and this is what we can afford. Like that's a, that's a hard to swallow pill. Let me tell you. Um, so the way we did it is we.
• 33:10
  Okay, actually, yeah, I have a lot to say about this. Wow, sorry. Just a million things just flew through my head at the same time. Okay, so Freco G, obviously it was our first product. That stock packaging, it's like literally the sample that Labs tests eyeliner in. It's like a mini eyeliner, but it ended up just being the perfect product and I had like no notes on it.
• 33:31
  One thing that can help, we did design changes, obviously. We perfected the number of bristles in the brush and the color of the packaging and the length of the wand. We perfected that over time. But the outside, as far as the consumer, the shapes stayed the same. So a couple of things on that. One thing that you can do.
• 33:52
  Again, this is a partnership. I mean, everything in life is a partnership, right? You can go to your packaging manufacturers and you can try and partner with them after a couple initial orders on something called a blanket order. Have you guys talked about that on the show? No, we have not. Okay, great.
• 34:09
  So a blanket order is where you have to build the relationship. Generally, there's a certain amount of credit involved. So that's a little bit scary, which at the end of the day was me. And you can say, okay, so say I'm like, I need to order 50,000 units of Freco G components. But I only, and I think that that's like...
• 34:33
  probably more than enough for an entire year. That's like a crazy massive amount of inventory. You can partner with your componentry manufacturer and say, hey, I'd like to order this in advance. You hold it. They hold it. You have to pay a deposit on, it's usually about, I think, like 25% of the inventory.
• 34:54
  And then you put together with them a schedule for the entire year of like every two months, we're going to release, you know, 8000 units and you're going to ship those. So that not only does that allow and then you get the price break on 50,000. And what we chose to do with the price break on the 50,000 instead of ordering 2000 units at a time, a. Yeah.
• 35:13
  you can further refine the design process, which is what we chose to do. You can have it pre-printed there. So when you're pulling inventory, they're housing it. One of our manufacturers that I'm speaking of is in New Jersey. So instead of risking going out of stock because they're like, oh, we're waiting for a shipment of this stock componentry. It's in China. It's on the boat. It
• 35:37
  F I'm out of stock. You're shipping from New Jersey or wherever you're manufactured. So now you've already got stock security. You've built out your plan for a year. They're auto shipping the 8,000 units. So you're not even thinking about it. It goes straight to your, to your lab. You're like streamlining the whole process and it's already decoded. It's already printed. So it's like you're, and you're getting price breaks, 50,000 price breaks on all that. So that's a huge thing that you can do. That's amazing. What's the downside of that? There's no downside. There's no downside. Right.
• 36:06
  Why don't people talk about this more often? I've never heard about this. I don't know. I had never heard of one of my... Yeah, it's actually the reason why we have Freca XL is because that exact situation happened where we weren't going to get units from China on the Freco G size. So we literally created a new product just because they had inventory on hand of the larger size. And then that was such a hit that we captured around and...
• 36:33
  eventually made that the packaging size for, excuse me, Frec Noir as well. So there's no downside. It's just a little bit, it's scary because you're financially liable for those 50,000 units if anything goes wrong. That's the only downside. And you do have to take them. It varies based on manufacture, but most of them you have to take it within a year. So if you have a slow year of sales and then you're sitting on like 20,000 units of inventory, yeah.
• 36:57
  that you got to buy it. It's kind of like people in, like the only example I can think of now is like, you know, McDonald's where people buy like the futures of whatever it's going to be like the, the chickens or the wheat or the blah. And like, they commit to like the certain price and no matter what the changes are in the market and all that kind of thing, but they've already bought into the future at this cost. And like, that's it whole, whole year. I've,
• 37:20
  Yeah, I don't know that, but that makes sense. But that's more of like a volatile thing because like those kind of industries really like fluctuate. So you might be buying at like a price that's too high. But at that point in time, you're like, I will lock that in kind of thing. Got it. But that's so cool. I love that. I wonder if I can do that for...
• 37:37
  uh, the non-alc brand. That's really cool. Wow. Okay. You should definitely ask. I feel like I cut you off. No, no, it's okay. You had a couple more, um, things I had. Yeah, I did with packaging. Yeah. So, um,
• 37:51
  So I actually have a sample here. Okay, so packaging. So one thing that I would like to say to everybody is that it's a process. And when you can change your packaging, and I think that people really can get hung up on that. I mean, obviously it's not ideal, but if you have to start with stock packaging and then you wanna change it down the road, your consumer is just gonna be, I mean, at least for Freck, they're gonna be psyched.
• 38:18
  So one example is cactus water, which is our cleansing lactic acid toner. We started it out in a eight ounce Boston round, which is like if for any it's like a kombucha bottle, it's like the most basic and it definitely feels weird for a toner, but we made it work.
• 38:36
  And it was actually like a little bit too big as far as industry standards on fill weights, which for anybody in beauty, please know that there are industry standards on fill weights. Like we made a six ounce face moisturizer on accident.
• 38:51
  When industry standard is 1.7, that was a humongous issue because it was more than a year's worth of moisturizer. So customer retention was like zero because we, but I didn't know. I was just like, oh, six ounces seems right. Like it's a, you know, juicy, juicy deal. So just, you know, check that. And I'm sure that's, that's true across industries as well, but especially for beauty. But back to Cactus Water. So we launched in a Boston round. Like at the time I was just like, I knew that that product had, um,
• 39:20
  had legs. And I was just like, you know what, I guess the packaging, like, it's not really what I envisioned. It's not perfect, but I guess it's okay enough. And then we completely pivoted and this is now what it is. Very sexy. And so for anybody listening, it's a beautiful, we made a custom glass bottle and it looks almost like a, a high-end like fragrance. Um,
• 39:44
  But it's a huge pivot from where we were. You know, it's all square edges. It's completely different. And it was really well received by our community, obviously. And it's like so Instagrammable. So I think like know that it's a process. And of course, if you can get your ducks in a row and if you're the kind of person who has, you know, funding out the gate and like a bunch of like experience in business, maybe that's a different story. But for me, coming from a background in interiors and not having any idea about what
• 40:10
  how to run a beauty company. I, yeah, it was, it was something that, you know, in the beginning, I was just like, you know, I could sit here trying to make things perfect and never launch anything. So kind of just taking it with like grain of salt and be like, you know, it's not perfect, but it's, it's good enough.
• 40:30
  Yeah, it'll do. And you should just like move forward rather than being crippled by that, like perfection notion. Oh, wow. So many great tips there. I said, obviously then I've made so many mistakes, but I think all of, all of them, I'm okay with them. And it's like, you know, you learn as you go and it, it, everyone's story is so unique to them as far as your background and what, you know, going into entrepreneurship. So, um,
• 40:57
  If you're the kind of person who is really like going off a product like I was and didn't have a ton of business background, like don't get crippled by perfection because then you'll never get anywhere. 100 percent. Love that.
• 41:13
  Where is the business today and what exciting things are coming up that you can shout about? Or what do you want to tell everyone about with Freck? Yeah, totally. Well, we just completed, uh, at the end of 2020, we, um,
• 41:29
  Raised our seed round finally for the first time up until then I had almost completely run the business off of Depth financing. So taking loans from like PayPal and Shopify Just to keep us going and then I did a super small friend and family around to To get us through like our partnerships with Urban Outfitters, etc. But We are kind of
• 41:56
  gearing up to raise our series a at a certain point, like probably early next year, which is really exciting. Cause it'll be the, you know, we've been like really, like we've been really lean and I like being lean. I like having a lean team and just, you know, badasses who come with their a game. We like being lean on capital because I think it keeps you like hungry and like,
• 42:17
  you know, uh, quick to pivot. Um, we actually are launching a new product tomorrow. I'm not sure when this will air, but, um, it's our first it's after tomorrow. You can talk about it. Okay, cool. It's our, it's our first exclusive product with Sephora. So I'm excited to see how that goes out. Um, it's slime light, multi-mineral hologram highlighter, which is in the cheek slime component, but it's, um,
• 42:40
  It's a highlighter and it's just the most, the most extra highlighter ever. It's like multi-chrome. So it goes like green to gold to silver to like invisible. And then we have three shades of that. So I'm really excited about that. But more so than, I mean, I'm just really excited. I really believe in the product, but I also think that this is a launch that I've been really excited for for a really long time because we finally have, you know,
• 43:03
  the time and the capital and the bandwidth and the team to like really properly execute a launch, which I think we haven't had before just because we've been so in the weeds, frankly, we haven't had any support. And like, we've, we've really focused this year on like building out our like guidance team to help us, you know, you don't know what you don't know. So help like finding the team to like help us fill in those blanks. And I think it's like our
• 43:33
  like ever, not campaign launch campaign ever. So I'm actually maybe more excited for this one than I was for the initial launch of Freco G. Um, because when I look back, I'm like, I was so nervous and like, I was just like really overwhelmed and over my head. And now I'm like, okay, so we've like, we've prepared, we've like,
• 43:53
  really spent the time developing this product and like the, all the R&D and innovation that's gone behind it. And then also like from the marketing team, we had our launch party on Thursday. So just like proud of the team, proud of the products. And I'm really excited to see how that goes, but we have two mega, mega, mega launches coming out in January and March of next year. So stay tuned for that.
• 44:15
  Oh my God, that sounds so exciting and so amazing. I love your names. Holy moly. That is just so much fun. I love it. Gosh. Yeah, it's a fun part. Can't believe you're on a podcast the day before a huge launch. Like props to you. Thank you. Goodness. What is your top tip or piece of advice for entrepreneurs? Mm-hmm.
• 44:40
  I think, you know, it's funny, this changes, I think, over time and as you kind of find your groove and all that. But I think just make yourself proud, like behave with integrity and from everything from how you treat your employees.
• 44:59
  To training your employees, super important, because if you don't invest the time into training them, you might as well not hire them, which I think is really hard for people to remember when they're so in the weeds as a startup. Integrity from product innovation. Des and I, when we work together on product development, we just think about products that we wish existed. We don't want to bring things into the world just to bring them and just to make money, which is the thing for me, especially with...
• 45:27
  the environment and just the way that the world is right now. So just make yourself proud, I think, is what I would say now. And be thoughtful about your decisions. Don't be too rash. And yeah, I mean, the reason why you're starting this is your own personal reason. And it can be nobody else's reason. So I think if you just kind of try and look inward and
• 45:52
  and support yourself and know, trust your gut, know that you're, you're here because you're here. I think that's a helpful thing to keep in mind as you're going through your journey. Yeah. I love that finding your North star and just stick to that.
• 46:07
  So I'm conscious of the time. We have a few minutes left before the top of the hour and we finish every episode with a series of six quick questions that I fire through, some of which we might have covered, some of which we might not have. But question number one is what's your why? Why are you doing what you're doing? What is your North Star? Beauty is self-expression, period.
• 46:30
  Um, and, and I, I want that to resonate in the beauty industry for future generations. And I, I just want everybody to know that, you know, beauty is your beauty. It's not anyone else's. No one else can tell you what beautiful is. Question number two is what do you think has been the number one marketing moment that's made the business pop?
• 46:55
  Oh, it's definitely that moment I was telling you about with Sarah on the internet. And I think also...
• 47:02
  Uh, recently I've, I've been really kind of like behind the camera recently, my team has been, you know, kind of like nudging me to be more the face of the brand. And that's really like the, the viral TikTok videos that we have had success with all of that is mean. So I think it's just because I'm kind of like unfiltered with the community, um, as you can probably tell. Uh, so I think that's been a huge one. Like, like me stepping in front of the camera for the first time has been huge for the business. Interesting. I love that.
• 47:31
  Question number three is where do you hang out to get smarter? What are you reading or listening to or subscribing to that is bad ass? Yeah, I hang out here with you. No, I love I actually have not been listening to podcasts recently. I am huge on therapy. I go to therapy twice a week. So I think maybe you can tell, but I'm like very like emotional, like I'm emotional.
• 47:59
  when I'm making myself, talking about making myself proud, making my employees proud, you know, I'm a very emotional person, like emotionally intelligent. So I think that I really like, I, I, my therapy is actually funny because there'll be certain times where I lay down and we'll talk about kind of nothing. And then my therapist also knows that when I come in and I sit, she knows to sit across from me. And now we're in like a work, we're solving a business problem or like a crisis, not crisis, but like, you know, there's like something that we need to do.
• 48:27
  Um, so that's been really helpful for me in my therapy, like having that flexibility and somebody to, to focus on. That's really cool. Love that as an answer. Question number four is how do you win the day? What are your AM or PM rituals and habits that keep you feeling motivated and successful and happy?
• 48:47
  Oh my gosh, that is such a hard question because I literally joke with my assistant that I am the most high functioning dysfunctional person ever. I own a skincare company and it's like, honestly, I'm so busy that sometimes I don't even wash my face at night, which is terrible. But that's like where I'm at right now.
• 49:09
  Um, so I don't really have any like hard rituals. I mean, obviously like taking the time for my skincare. Oh, one thing that I've been doing, actually, my assistant has taught me this recently. Like, uh, he's always like, I do my, um, morning affirmations and I was like, well, that's a little like woo woo for me, but I actually have been just kind of like trying to practice gratitude a little bit more in the morning. Um, that's been a really, actually, yeah, that's my ritual. There we go. What was your affirmation today? Okay.
• 49:39
  Um, it was, it was like, I love you and I'm proud of our team. And it's obviously it's all like focused on like going into this launch. It's like, I'm so proud of the team. I actually, last week we were on a marketing call with our marketing consultant that is leaving and she had gotten us through like the Sephora launch in the past eight months. She was only supposed to be here for six weeks and it turned into eight months. And so we were, it was her last meeting, uh, with us. And I was just looking at the team and just being like, wow, wow.
• 50:07
  Y'all have come so far, myself included, all of us have come so far in eight months and just being like so excited about that. But I'm just super grateful for my team today and like every day. But today I'm just like, whoa, I can't believe we made it to launch day. Oh, that's a nice one. I love that. I think self affirmations is a really great idea. I'm going to I'm going to try that out. Question number five is if you were given a thousand dollars of no strings attached to grant money, where would you spend it in the business?
• 50:37
  Hmm. No strings attached. I would say it depends on the state of the business. But like, do you want like if it was like the last thousand dollars I had or if it if I just had a thousand dollars extra today, thousand dollars extra today, I would I take my team to dinner.
• 50:58
  And celebrate all of the hard work that they do. I mean, like we talk about entrepreneurship and like the beginning of the journey so much. And I love that. But like literally we would not no one would be here without their teams. Like it's it's incredible. And like the amount that you can rely and lean on people and like from people who have been in the organization since day one, like.
• 51:18
  Des and my art director, Nassara, all the way to new hires. Everyone is so critical. And I never, ever want to take a podcast or a speech or whatever without shouting out how important it is to delegate and rely on your team and trust them that they know what they're doing. And you got to focus on the up here stuff and let people.
• 51:39
  delegate down into their roles that they can really own their channels. Otherwise you'll just be in the weeds forever and you'll never get anywhere, which was a really hard lesson for me to learn in the beginning. Yeah.
• 51:50
  Noted. Yeah. Last question. I'm super aware of the time and I don't want to be greedy with you. So question number six is how do you deal with failure? What is your mindset and approach when shit hits the fan? Yeah. I used to get really spun out about it. I would just be like, oh, my God, oh, my God, my God. But now I'm just like it happens so much, especially with like keeping things in stock and, you know, all of like operational stuff. Like there's always going to be fires.
• 52:17
  So I think fires, it's just like, you just got to like, keep calm. You're going to find a solution. And if it, if it F's up, like whatever. But, um, I think like for me personally dealing with failure, I think I'm just so used to it because the business came into the world, like failing so many times.
• 52:36
  Um, but again, I would, I would point back to like, make yourself proud. Like if you really believe in something and it fails, um, learn from that, know that and know that that's so valuable. Cause like, you know, I think this is a great way to tie out this, this episode. It's like hearing everything that Freck went through in order to get to now we're at Sephora. It's like all, if all of those failures hadn't happened.
• 52:58
  I never would have gotten a Sephora. I would have launched a product that was subpar or wasn't ready or whatever. You know what I mean? So just trust the process, trust your gut and like keep your North Star and make yourself proud. And even if you fail, like make yourself proud and not failure.
• 53:12
  Totally. And if you had have given up, you wouldn't have gotten into Sephora and you could have so easily given up after the first hurdle. This is crazy persistence. Wow. You're amazing. This was so cool. You taught me things that I did not know about and had never heard before. So love that for me. I'm excited for your launch tomorrow. Congratulations. I'm going to be tuning in for January for all this new cool stuff coming out. And I'm going to be cheering you on from the sidelines. Thank you so much.
• 53:40
  Thank you so much, Dean, for having me. It was so nice to meet you and chat.
• 53:48
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 54:12
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 54:35
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.
• 54:51
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 55:16
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 55:38
  As always, please do subscribe, rate and review the show, and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.