Ali Kriegsman 2
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[00:00:00] You are now entering female founder world with your host, Jasmine
Garnsworthy.
let's switch gaze a little bit. I want to talk very specifically about wholesale. Yes. And you helped us as well while we were creating this Retail Bootcamp program.
We're going to be doing it again soon. And one of the things that we see again and again in the community business owners just like holding out for that, like Target, Sephora big box retailer. And that makes sense, I think a lot of the time for a specific kind of brand to wait for that, maybe like exclusive distribution and.
That's I think. The thing that people don't fully understand all the time is what the implications of going into those big retailers are, what the costs are, Oh, yeah. what it means for your team, that it is often not profitable for years. Yep. When you go into these big retailers and so you need to be able to pull on these like cash leavers before you can do it.
And something that I see as well is like [00:01:00] folks who are building these businesses, who are growing through indie channels, seem to be able to build in a really sustainable way that can also help build brand if they're going into the right stores. And it's not just. Small businesses that are doing this like Bala does this.
Yeah, if you're in If you're like a grocery product, you absolutely have to have this strategy Because it doesn't make sense to sell like poppy. For example, like they can't be a DTC business Allison helped us with retail bootcamp as well and spoke about how they work with like smaller grocery, which was really helpful I want to chat to you about your advice for someone I got a DM literally yesterday from a founder in the community and she has actually a scent product and she does candles and she was saying that she keeps going into retailers and getting turned back and she's trying to get into these independent stores and she said that the feedback she gets is that it's too expensive.
So I would say like the alignment, there's an alignment thing because nothing's too expensive. [00:02:00] You're either going to the wrong kind of stockist, they don't have your customer or you're not meeting the like. Brand and their value and what they expect for that price. But for someone who's in this position where they're getting knocked back by retailers, they're like, don't think that they're that they're like, have hit the nail on the head in terms of their wholesale strategy, but they want to follow this like independent route.
You obviously have worked with a lot of brands and a lot of retailers while you're building bulletin. And I'd love to know your advice for someone who's in that position. Yeah. So just to clarify this founder that DM do. The retailers are telling her that her products are too expensive for them to buy.
Like they're basically saying, what they're basically saying to her then is, I don't think I can sell this. Yes. A hundred percent. And do we know how many retailers have said this? She said that she either doesn't get responses, she's emailed a lot, she doesn't get responses, and when she does, and she's like in store, it's a pricing issue, it's the feedback that they're giving her.[00:03:00]
Got it. So then, yeah, essentially what that retailer is saying to decode that is, I don't think I can sell this to my customer. Yeah. And that's either because that retailer's customer Is not shopping that price point like that. Let's say the candle 75. If that retail store, they're average MSRP is like 40.
If it's a lower price point store, then yeah, that retailer is not going to be able to push a 75 candle on a customer. The other thing the retailer could be saying is this actually is within my retail stores price point, but the way that your product. Is packaged and the scent and like kind of the overall impression of this product for how much it's going to cost me.
I don't think I can successfully sell this to my customer. So it's either that the retailers kind of [00:04:00] average price point in the store is too low to sell the price point of that product or the retailer. Does sell that price point, but that product is not communicating that it's worth that price. So if it's the former, then she needs to be targeting retailers that are just further upstream.
It's like you need to go to a retailer's website and figure out like what is the average price point of this retailer? Is this retailer selling like tchotchkes or is this retailer selling like, luxurious skincare and like cashmere scarves and is the customer shopping this retailer similar to the customer that I can see shopping my D2C site or stumbling upon me at a market and like easily shelling over 75 for my candle.
Imagine that your customer D2C and the customer walking into this store are one in the same. If it's the issue of this retail store sells This higher price point, [00:05:00] but your price point doesn't feel justified, then you need to reformulate, you need to repackage. And if you are pursuing retail, indie retail as a core part of your strategy, which I completely agree with you, I think most brands should.
Agree that there's a very small percentage of brands where it makes sense for them to hold out for that Sephora exclusive, that Ulta exclusive. And I think a lot of brands do that and they like shouldn't also. I think that there are plenty of brands, like Boy Smells started out super indie. Look at them now.
Like they're everywhere. And I don't think anyone is like, Oh, like it's a shame that they started out. Like it doesn't like, no, it's it doesn't matter. I think that's a thing of if retail is going to be your strategy, then you, you need to live and breathe your price point feeling worth it.
Like you pick up that candle, it needs to feel almost the opposite. Oh my god, I'm getting this for [00:06:00] only 75? Like it's, maybe it burns for longer than another candle at the same price point. Maybe like materiality wise, like the jar it comes in is like super luxurious, like it should smell really incredible.
Like maybe it has three wicks instead of two, like it, that value needs to be communicated and it needs to feel like a no brainer for the retailer to bring it on so that they can sell it to the customer. And I think the other thing I'd say is like retailers more and more, I think they want to know that there's some.
Brand awareness built in already. So invest in your Instagram looking beautiful so that again, if they check you out, like it only further communicates that you're worth the price point. If you're trying to sell into a retailer and your candle is retailing for 75, so the retailer has to pay like 38 something, let's say 37 something per unit your Instagram can't feel [00:07:00] like homemaker y, whatever.
It's it should feel. Luxury, like it should feel like that candle can be on net a porter, it should feel like those assets can live in a beautiful magazine go try to make your Instagram feel like that candle could be a hundred dollars. Yeah. Because, Retailers are consumers too they will look at your Instagram, they will look at your website, they will look at all of your D to C stuff to decide if they want to buy your candle.
The same way that if a consumer is seeing your candle in the store, they're also going to look you up on Instagram. They're also going to look at your website. So I don't know if that answered the question. That is such good advice. I would only add one other like small thing and that is the low the, what's the lowest lying fruit?
Lowest hanging fruit. Yeah, lowest hanging fruit. Is also just make sure that if you're emailing, make sure you're, your pitch is nice. It's like short. You like, make sure you've got your sell sheet looking great, like all of that kind of stuff.
And if you're feeling confident [00:08:00] about that, then yeah, that's great. You need to dive into this other stuff. Yeah. You just mentioned. Yeah. Can we talk about influencer marketing? Yes. There's this viral post that's been going around that says the era of influencer marketing is dead. And it's this carousel post, Nat and I spoke about it in a solo episode recently that hasn't actually aired yet.
the perspective is interesting. It's like influencer marketing as we know it has changed and it's not these brands that I talked to that launched like 10 years ago, they just gifted a bunch of gals on Instagram and went viral and off they went and that did everything and built the brand.
And now it feels like things are, like harder and more expensive and you need to be really like clever and strategic about it. How would you build a creator or an influencer program from scratch now for a consumer brand? Yeah. I just did this year. How'd you do it? Tell us your secret.
[00:09:00] [00:10:00]
I do, I'll comment first on the statement that influencer marketing is dead. First of all, I think that the influencer as we know it is dead simply because The influencers that we've all come to love and follow yeah, when they're posting to their grid or their stories, like five to ten brands a day, let's say on their stories, because they're getting gifted and they're tagging or let's say it's like even in partnership and they're styling something or they're doing like a makeup routine featuring that brand and they're charging, however many thousand dollars for that.
And then let's say every other post is something featuring a brand. It's Once you get into that volume, everything becomes noise, right? It's like the stamp of [00:11:00] approval from that influencer becomes like the stamp gets more like diluted or like dries out. I don't know. I'm trying to like make the stamp thing work here.
So yeah, it just becomes noise. It's if I'm seeing an influencer post like a zillion brands in a week, I'm just like, okay, like I'm not falling for that brand anymore because that's happening. So I do think that era is over. Over do think that creators and influencers, but I would say more creators are still very critical for building brand awareness.
So when we launched perfume at scent lab, for example it was an innovative product. It's like a blend at home perfume. You get two perfume mists. They're like super beautiful and complex on their own. But you can mix and match. Two of them to make your own custom perfume in a perfume bottle that you get [00:12:00] in a color of your choosing.
No one's doing that. So one, you have the challenge of explaining that's a thing you can do and two, like introducing Scent Lab as a brand. So there's an element of building brand awareness and education. It's like a one two punch. Mm hmm. And I knew that had to happen through creators.
I knew that was the most cost effective way of doing it and so I basically Created like our first kind of massive seeding program and seeded to nearly a thousand creators this year in a matter of seven months. Seven months. And people who are super new to this seeding means essentially gift gifting.
Gifting, gifting. And so we launched, it's a lot of creators. It's a lot of creators. We didn't pay for videos. We just gifted. Yep. And my approach was. I'm gonna gift to the dream customer, right? . I'm not gifting to, influencer X with 50,000 followers. I'm gifting to, college age girls who have Stanley Cups and Uggs and like [00:13:00] elf lip glosses, but they'll buy a road lip gloss or a summer Fridays, like when they, wanna splurge.
. And. They aren't very aspirational and they'll wear a Narciso Rodriguez perfume and Sol de Janeiro. That's the customer. And so we found a bunch of TikTok creators with two interns that we put together. paid every month to, find and reach out to a certain number of creators weekly.
And for the perfume launch, we had 330 creators launch between July 15th and August 30th. Wow. Promoting their custom perfume potion on Tik Tok. And I basically took the brand from, I won't say the exact number, but like a certain number of monthly site visits a month to Give us a percentage increase.
I can't do a percentage increase in my head, but let's, [00:14:00] this is I'm, I will preface this with mental math, let's say 800 percent increase. Wow, okay. It, like for brand awareness, So creators work for brand awareness. Creators work for brand awareness, and sparking those creator videos on the back end of TikTok.
Asking for a creator's ad code and then basically launching that creator's video as an ad within TikTok. Okay, how do you do this? Okay. What's an ad code? Okay. So this, we may have to do a separate workshop on this guys. Okay. So when a creator posts a video, let's say you're me, right? And I'm a creator and I'm like, here is my content.
I made my amazing perfume potion. You reach out to me as the brand and you're like, hi, I loved your video. Can you please send me your ad code? There's an ad code. that I can create, that any of us can create for any TikTok video that we make, and I will copy and paste the ad [00:15:00] code and send it to you so that you as a brand can use it for either seven days, 30 days, or like 120 days.
And it'll appear as an ad on the influencers account. Yes. So it's like whitelisting. Yep. Is that the same thing? And that means that the influencer then is getting more followers and they're starting Yeah. Because you're putting money behind their content and you're getting this like stamp of approval and this content looking super organic. It works really well. All right. Any business owners want to post about us and our membership? Yeah. We'll do this for you. No, it's great. It's great. And it's great. It's a win. And so that worked really well for us for creating brand awareness, creating education.
But you need budget, right? It's like you need budget to run the ads. And I consult for companies on the side that are doing this, that can't set the minimum viable daily budget with TikTok. It's like with Google ads, where Google ads is like, if you're not spending. 5, 000 with me a week, like you don't [00:16:00] exist.
I think Instagram meta used to be this way too. It's like you can't just spend 30 a day on meta and expect like crazy conversion. If you're spending like 50 a day on a sparked ad, are you gonna get crazy results? No, but if you're spending 250 a day, like you probably will see better results.
It's just not It's, there's like a minimum viable spend I think, on these platforms. So when, 250 creators post their videos within this period, are you like cherry picking the content that you think is the best and then putting ad spend behind that? Yep. Or, the content is organically doing well and you're like, let's just boost this more.
How do you a mix of both. Yeah. It's a mix of both. Because It's like a gut check? Or it's Who do we want to be? Yeah, right? Like sometimes creators post things and it does really well But the product isn't necessarily featured It does organically well But the product isn't featured in a way that we think is going to drive site visits and [00:17:00] sales for us versus another video maybe isn't organically doing well, but We know that the video, if you give it some TLC aka budget it is going to it's going to pop off.
If I, though, were to start a consumer brand tomorrow I think what I would do differently is I would find a few ambassadors within the customer cohort. That genuinely love the product, are very comfortable kind of working with you like for very minimum budget a month, like a small stipend a month and like getting free product from you a month that are creating recurring content for you on their own TikToks and are aware and consent to being sparked.
At any time. Which is when you put this ad money behind it. Yep. That are also just like posting organically to their own Instagram, to their own TikTok. And they represent your brand and [00:18:00] they are ongoing brand ambassadors for your brand. And I would have them also be like running events for your brand like every two months.
I think those are like the most kind of organic and cost effective way to Build brand awareness on a budget especially if you're like marketing to a demographic that you're not in. And I think that was like a big struggle that I had in my last role. I want to talk about the actual outreach process and what that looks like for for creators, because 800, like getting 800, that's just a lot.
What is the outreach process? What do you include including in that first message? Is it a DM you on TikTok. Like, how do you do it? So my background is in sales, which helps a lot. This is basically a sales engine. You, Can do it on your own. I think again, This is not something that a founder [00:19:00] should be spending time doing and I think this is something that is worth finding college interns to help you with that aspire toward entrepreneurship that want the experience and again I believe in paying people for this type of work.
So like small budget plus experience plus they have like their own independent desire to learn this stuff, right? Like for their own career. That's like the perfect type of person to work with. It's a mix of email and DM. Like a lot of these creators want this type of outreach. So they put their email in their LinkedIn bio.
And you can DM creators, even if they don't, Follow you. It's just a toss up of are they gonna see it? Are they gonna get back to you? And so we A B test one intern doing DMs, one intern doing emails And there's an initial DM and then an initial email that's Hey, we found you.
We'd really love to work with [00:20:00] you. This is what we're about. This is what we'd love to gift you. Here is the ask. If you're interested please let us know and send us your email. That's the DM version. In the email version, it's hey, here's the ask. Please reply back if you're interested.
And it's like super friendly, it's super brief and it's just a volume game. I had one, one intern reaching out to 150 people a week and another intern reaching out to between 100 and 200 a week. Yeah. And the ask, you're asking them to share between, share something about the product within a certain like time period.
Is that what you're asking? Yeah. Yeah. Amazing. And we didn't do we tested creator. Like briefs and not sending a creator brief. So like here are the rules and then not sending any rules. Again, I think for a mass brand, letting the creator rip was better. I think giving rules for a more prestige brand say beauty merit they, I've seen [00:21:00] their creator briefs, like they, they need them. For us, oddly enough, like the content was much better when we didn't provide any guardrails. Okay. That's really good to know. For anyone who's listening to this and they're also interested in figuring out. This process, we have a workshop that we did with the marketing lead at Gorgie, the drink brand. And it's their community sampling program that they did. She walks us through like step by step everything that they did.
A lot of it echoes like what you just said as well. So make sure you go and check that out. It's in the Business Bestie dashboard. Can we talk about fundraising before we wrap up? And. Yes. Your lessons, your thoughts, how people should go about doing it if they want to do it, and I guess just like whether you think consumer brands should actually be raising money right now.
Oh my goodness. So funny because prior to joining a venture backed consumer, Brand, I was like, I really don't believe in venture backed consumer. Yeah. Did [00:22:00] it. And have come out the other side, like not sure how I feel now. Because here's the thing, like working capital needs, like the cost of inventory, especially once you get that like big juicy PO from a retailer.
That's real. Inventory costs so much money and getting working capital loans and things like that, like you can do it. But is it enough to support POs I don't know. Who's to say? But should venture capital be used for that? I don't know.
I had a conversation recently with Kelly from Golden Hour Ventures and she's coming on the podcast and we were talking about this and she said that She likes, she recommends, and look, no financial advice on this podcast, guys. [00:23:00] This is not financial advice, but that founders should use debt to finance anything that they can see revenue, like directly to revenue.
So like a big PO or something like that. And venture capital should go to growth. Yeah. Like always go to growth. Yeah. And what's that what does that look like? And she's I never want to see just like when you're raising money. I never want to see a founder come and tell me like how they're going to use this money to, to just only fund their operations.
Like you need to be showing me how you're going to expand into a new market or like whatever that looks like. But yeah I'm just curious, I think, again, like I said at the top of this conversation, I hear people talking about, if only I could raise money and all my problems would go away.
And so I just want to get your thoughts on that. I don't agree with that. I think that actually raising money I think I think that Raising money creates bad habits. I think that it warps people's sense of how well the business is doing. I think [00:24:00] that it really warps people's judgments.
I think it warps people's priorities. And I think it, it takes people's eye off the ball of finding true product market fit. Yeah. Making sure you have real demand. Yeah. I think that businesses that like find product market fit after bootstrapping for many years that like are ready to enter growth mode that subsequently take on venture capital as part of an expansion strategy.
That makes sense to me. I think that If you take venture capital on super early as like part of your journey to finding product market fit before you have it, I think that's where things get really tricky and I think we've seen a lot of that happen since VC became like a desirable vehicle for consumer brands.
From what I've seen from the inside, it seems like VCs. Because a lot of times consumers have [00:25:00] really cooled down on consumer investing, and if they do invest, they really want to know that they're not investing into a void, and that there's a big retailer on the horizon. And if that's not happening, then it's not happening.
And so I think that the market has really contracted. I think it's harder than ever. but I also think it's like understandable. I would personally not invest in consumer businesses as a VC. I, Just think given my background, which is more B2B that is where I would feel more comfortable. And I think that the exit count of consumer brands that do generate returns for VCs you know, they're more [00:26:00] few and far between.
But no, I don't think that money solves these problems. I actually think that it creates like a really warped sense of reality for founders from my perspective. Ally. Thank you so much for coming on the show. The last thing I want to ask you is for a resource recommendation. Do you have one? Oh my god, she's so controversial, I just learned. Her name is Teal Swan. I don't know who she is. Okay, I love her podcasts.
They're like really quick, like 10 13 minute, like real talk, like psychology yeah. Confrontations, basically. But she also might be a cult leader, so just be aware. Don't get dragged into the cult, guys. Yeah. Okay, Allie, thank you so much. It's been amazing chatting with you.
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