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EP 278 - Julie Maskulka: Otter Voice Meeting Notes

EP 278 - Julie Maskulka

Ellen Yin45min

Ellen Yin

00:00

You're listening to cubicle the CEO episode 278. Corporate gifting isn't just a thoughtful gesture, it's a $33 billion market opportunity. And for Julie Maskulka, founder of Anecdote Candles, corporate gifting now drives 25% of her company's annual revenue, known for combining storytelling with scent, anecdote is carving out a unique space in this massive market, offering a custom candle gifting program that delivers an impressive average order value of $2,727 through testing different strategies like lowering minimum order quantities and tapping into distributor networks, anecdote, has been able to yield a 15% reorder rate from corporate clients, from targeting unexpected industries to creating scalable systems for customization. You'll hear from Julie on how to turn an idea for an untapped market into a powerful revenue driver.

Ellen Yin

00:54

Welcome to Cubicle to CEO, the podcast where we ask successful founders and CEOs the business questions you can't google. I'm your host. Ellen Yin, every Monday, go behind the business in a case study style interview with a leading entrepreneur who shares one specific growth strategy they've tested in their own business, exactly how they implemented it and what the results and revenue were. You'll also hear financially transparent insights from my own journey bootstrapping our media company from a $300 freelance project into millions in revenue.

Ellen Yin

01:36

Hey, everyone, welcome back to the show. Today, we have

Ellen Yin

01:40

from Anecdote Candles joining us, and you can't really see because I'm covering but if you're watching on YouTube, there is a candle burning in the background. It smells so good. Smells just like fall.

Ellen Yin

01:50

And Julie is here today to share about how corporate gifting as a strategy is accounting for about 25% of your total revenue at anecdote this year. So before we get into the case study, Julie, welcome to the show.

Julie Maskulka

02:04

Thank you. Excited to be here

Ellen Yin

02:06

So excited to have you here. And I would love for you to to share your cubicle the CEO story with us. So what was that final catalyst that you know landed you in in entrepreneurship?

Julie Maskulka

02:18

Yeah, former consultant turned candle maker. That's my that's my headline. I used to work in consulting, and my last job was at a design agency. Everyone had designer as a title. I was the business designer, which was like, you know, the person helped them figure out how to make money while everyone else was creative on the side. Anecdote became this weird side project. I was getting migraine headaches, and there was a candle that was triggering one of them. So I still cannot quite explain the steps that took me there, but I went down a very interesting internet rabbit hole. Learned all about candle making, and I just started tinkering with it. While I was doing that, I started, you know, it was a bit of a walk down memory lane, like, oh, this reminds me of the coffee shop I went to, or my Pilates class, or that one trip to Portland, and it slowly became just kind of this creative outlet of, Oh, what if I connect the two somehow?

Julie Maskulka

03:08

And so while I was working on it, I obviously I still had a pretty demanding job, but it became this thing that I just kept tinkering with, and I knew I wanted to test it in some bigger way. So I did a trade show, and we got picked up by Nordstrom, Anthropology, Macy's Lucky Brand. Like all through that show, I joked that it was my accidental business. But then it quickly became like an oops business, because we had to, had to figure out how to, how to ship the product. So I stumbled into it. But it weirdly, I think suits me. So I'm happy to be a candle maker now.

Ellen Yin

03:40

I love that consultant to candlemaker. That's unique, Cubicle to CEO story. That's a remarkable beginning, I think, to your your business story. I mean, not every first year entrepreneur can say they were immediately picked up by, you know, household names like like Nordstroms and Macy's and whatnot. But from what I understand, Anecdote is now in 2500 doors. So your business, you're selling in retail, you sell direct to consumer on your own website.

Ellen Yin

04:06

And then with today's case study, we're really zoning in on your corporate gifting strategy, like I mentioned at the beginning of this interview, that accounts for about 25% of your revenue, which is absolutely significant for our listeners who may not be as familiar with corporate gifting, can you kind of share with us why you felt corporate gifting was a unique opportunity for Anecdote, and especially, I guess, in the product vertical that you are why? Why candles and corporate gifting, right?

Julie Maskulka

04:06

And candles are not a common corporate gifting thing first of all, and so, for one, there was just an opportunity from that perspective. But if you think of any corporate gift you've received, like, I get them from my accountant, from my dentist, from all sorts of people, it always has their logo on it. For us from the very beginning. And how we had success in the retail market too was that we tell a story, and it's very simple. It's on the late. Cool, but we tell a story that piques people's interest, and they feel seen by it, and they get it. So when we started getting inbound inquiries of, do you do custom like, well, maybe, and it became this, like, very obvious opportunity for us to pursue, because we already have a product. And, you know, it's a great opportunity where we can just hone in on our value prop of making fragrance a conversation piece.

Julie Maskulka

05:22

And so our pitch to corporate gifting is, you know, don't just put your logo on it because, I mean, everyone has enough chat skis in their apartment, but, but now you can elevate your brand with a scent and a story, and you can really make a statement piece for your customers or your prospects or your teachers, or whoever the recipient is.

Ellen Yin

05:40

And I will say, being on the receiving end of a lot of different, you know, types of gifting opportunities, I feel like we really like need more functional gifts in in that space, right? Like nobody wants another branded pen, like you said, or, or, you know, whatever. There's so many, like tote bags out there and, and I feel like having something that lives in your home and that you can see kind of on a daily basis, or that like adds to the ambience of your home definitely makes a difference.

Ellen Yin

06:08

I actually just want to show our listeners real quick who have never seen it like here's an example of a candle that says homebody. And I definitely identify as a homebody. So I love what it says. It says smells like invited and not going, which totally made me laugh when I saw that. But to your point, yeah, great conversation. Starter piece. What gave you the idea to actually go out and, like, test the strategy, though? Like, who were, who were your first corporate clients? When did you see that opportunity actually present itself in the business, not just kind of as, like, a theoretical idea.

Julie Maskulka

06:41

Right, It was about two years ago. It was inbound inquiries. It was current customers, or people who had seen the product. And the question was, hey, do you do custom? And the answer to ourselves was yes, sort of. And so we were slowly going back and forth. We had a very patient customer service person who, you know, 40 emails later, we got to, okay, great. Here's your label. That's not scalable, obviously, but it was a good way to learn. You know, what are the boundaries we should create, what really matters to them? So last year we took that was two years ago. Then last year we tested it a bit more. It was still pretty low. Fi, but Okay, now let's give people a menu. Let's make sure that we're really clear about what you can and cannot do.

Julie Maskulka

07:20

And, you know, just give them kind of a coloring book, like, yes, it's still going to be yours, but these are the things that are yours to create, and these are the fixed things, and that helped a lot to kind of, you know, create something that we can build on.

Ellen Yin

07:33

So how did you, I guess, decide on which aspects could be completely custom and which you needed to kind of keep more within a set menu in order to make the I guess the units work out for you in terms of scalability, right?

Julie Maskulka

07:49

So, I mean, anyone who's made candles like the hardest thing about making candles is, if you change the container, it doesn't matter if you're using the same fragrance, you're going to have to go through wick testing from start to finish. You may have to change the fragrance. It's pretty technical. So that was one thing where that's not going to matter that much to the customer. We have enough sizes available, we aren't going to touch that.

Julie Maskulka

08:11

The other thing that I thought would matter to people is fragrance. So we gave them a menu. We started with around 12. And you know, it's when it's your own project, it's like, oh, but what if that one person wants marine because they live by the ocean, and you add one more in? Turns out, that doesn't matter at all, which is funny, because we sell fragrance, but when we did a survey with some of our customers, they came back and said, you know, we asked them what was most important, and fragrance was ranked to least out of all the things, and it's because they're giving it to, you know, 100 1000 people, that they aren't going to please everyone. And so that was one thing we thought would matter, but didn't as much. So we keep it lower now and then. For us, what's the most, easiest thing to change is obviously the label.

Julie Maskulka

08:58

So we keep, you know, and this isn't how all companies that do corporate gifting, but we will not do a pure private label of great. Put your logo on it like we still keep the anecdote. Look and feel. We still keep the anecdote, but you get to write your own anecdote, and that's the real value prop of it. So that's where we gave people a lot of liberty of, okay, do you want to add your colors, change your logo, and that's really easy for us to do, just from on the back end of how can we make that operational? So we just tested small and learn, like, you know, what really matter, obviously, to them, like they want their brand to show up, and that's the easiest thing for us to make custom for them, right?

Ellen Yin

09:36

So to my understanding, then these brands, like you said they're getting to see their logo on the label. They're getting to come up with their own little quip, if you will, for that anecdote, they can change the colors to match their branding, but like the typography of the actual text is still like anecdote branding, and then like the anecdote logo on the lid of the jar, like you guys are still keeping that to make it do. Uh, like you said, fully, like CO branded, in a sense, right? It's an anecdote candle, but with their with their unique anecdote on it, right? What is one of your favorite corporate made of anecdotes that you've ever seen? I'm always curious.

Julie Maskulka

10:16

Thought you were gonna ask, so I actually pulled up some. I mean, we've had like, all sorts interesting really, the types of clients that you can attract. We had a marketing agency that was doing a big event specifically for marketers and advertisers. So their candle was called shift happen smells like connected minds and disrupted paradigms. Oh, I love that. We also worked with a private jet company, and there's blue skies, smells like brisk air and boundless horizons.

Ellen Yin

10:45

Ooh, very, very nice. So obviously very different clientele and agency versus a private jet company. Let's talk about the kind of because you really have a two pronged approach, right? You can sell directly to these corporate clients. You can also sell through, let's say, like distributors. If we talk about the direct sales side, first, walk us through your process for identifying the key industries and partners that you think are really great fit for. You know this, this corporate gifting strategy, because, like I said, there's a huge difference between an agency and a private jet company. So what's the through line between, you know, companies like that?

Julie Maskulka

11:25

There is, for sure, it's someone who wants to tell a story first of all, and like has a point of view. And so sometimes it's not just the industry, it's also the use case. So if they're giving something to their clients, trying to catch their interest, rather than, you know, maybe doing something internal, for example, like that may be a better opportunity to pursue. But just in terms of industries with the actual through line, this is where we had to do a lot of testing, and I had to go back on some of my assumptions.

Julie Maskulka

11:56

Like I thought in the beginning, retail or Realtors would be a great one. Like, you know, you homes, and let's make it smell like chocolate chip cookies. But not that was hard because it was very fragmented, and you have a lot of different people who only want 20 candles or throughout the year, and so that was harder for us. What became really good industries were ones that were mission focused, had a point of view, and also, when I was going back to with you's case like they really wanted to connect with the recipient.

Julie Maskulka

12:24

Early on, one of our best industries, and still to this day, is just education sector. If you think about, you know, anything from boarding schools to higher ed, they often need money, so they have donor gifts. They often need volunteers, and they're very grateful for that, they often need alumni, so they are great for that too. So they are connected there to their community in a lot of different ways. The design industry is another one of those that you know, there are a lot of different players in that space. There's showrooms, there's architects and all sorts of vendors like that's been an interesting one.

Julie Maskulka

12:59

And photographers too, because that was one that was really surprising. But they all work together and share ideas, so we were able to kind of tap into that community and get a lot of referrals. Because again, if you think of like the use case, they really care about the recipient, because there's such a high revenue attached to that person that they want to cultivate that relationship with them over time. So

Ellen Yin

13:20

I real quick before I go back to some of these examples that you shared, because very interesting. I wanted to first have you expand on that initial point you made about how you thought real estate would be, you know, a natural fit for for this kind of gifting, and it ended up not being the right fit, from what I heard you say, some of it came down to, like, unit economics, like someone saying, Oh, I only want you know, 20 candles. Was it just because of that, just like the sporadic Ness, I guess, of when they would need candles and for a small quantity? Or were there other factors that kind of played into why an obvious industry actually was not a good fit?

Julie Maskulka

13:58

Yeah, and this was our story, so it makes it there may be a candle company out there who figured it out. But for us, what it was hard is because you're working with an individual, and that's their business. So even though they work with a brokerage, you know, this is a person who runs their business a certain way. And so it wasn't just, you know, the quantity, it was, is the timing, right? It was, Oh, great. You can put my logo on it. I don't have a logo, and it's one, you know, if you also think of yes, that's a very professional job to have. But they have their own personality in their identity, in a lot of ways. So that also made it hard sometimes to make sure that we're sticking with the script of, okay, this is what you get to do. You can have a name, an anecdote, a scent, pick your colors. So it was just for us. It just didn't make sense at that time, when we were still trying to test out what the right market fit was,

Ellen Yin

14:47

okay, that makes complete sense. So just like a lot more, what do you call it? Variables at play that kind of make it harder for it to be uniform, right? The example that I love. Ed was the one you gave around education, especially higher ed. Like you said, that example of, okay, they have alumni that they want to reach, they have donors, they have volunteers. Do you find that with those types of clients, they are working with you year after year, and just maybe swapping out the anecdote, or, you know, the look of the gift that they're creating, or how does it look with some of those clients that have multiple communities that they're serving with these gifts?

Julie Maskulka

15:29

Yeah and that's the goal that they keep buying. And, you know, I think sometimes for company, or, you know, for schools, let's just use them. When they're trying to give gifts, there's a lot of pressure that we have to give them something new. We had a few schools say, Oh, they want to know what the candle is this year. So if you can create it as great, this is, you know, college so and so's annual candle. You know, there's a bit of excitement there. We also have different sizes, and that was something that we actually did a few different events to connect with these schools. And so when they saw that, they're like, oh, great, I'm going to give this to the top donor, this to the middle and this to the volunteers.

Julie Maskulka

16:03

And I know it sounds very obvious, but when it's right in front of them that they can actually, you know, move things around. Say, Oh, great. This is for that. This is for that. So we were able to nurture those relationships and help them think about, you know, it's not just a one and done. How can you make it still exciting the year after?

Ellen Yin

16:22

right? That's actually really interesting. I would have never thought to kind of almost tear out gifts in that way. But it kind of does gamify it for for the end consumer, right? It's like, oh, especially like the donor level, like, oh, I want to get the top donor level candle. It almost is like, like an accolade or a trophy that you kind of right wear as a badge of honor, or, I guess, put in your home as a badge of honor. So that's very, very interesting. I love that idea. And one thing that I've kind of observed about that example is it seems like the companies who, again, are very focused on fostering community, or have established communities, seem to be the ones that benefit a lot from from a gifting strategy like this.

Ellen Yin

17:06

One thing that I found really fascinating in the pre interview research that we were collecting from you and your team is that you have gotten really good at identifying communities where sharing or even like copying each other in a good way, of course, comes more naturally. And you actually referenced them earlier. Photographers, you said, are a great fit for for this. And that kind of made me wonder, okay, you said, like real estate agents, for example, they're all individuals. They kind of all each have their unique personas. I would think the same of photographers. I would think you would maybe run into some of the same challenges there. So I guess, what makes photographers, what have you observed, makes them different and a better fit? And can you expand a little bit on what you mean by like, these are industries where they naturally are good at, like, sharing or copying each other.

Julie Maskulka

17:54

And this is, you know, just from our perspective, but there's, I mean realtors, they are in competition with, you know, they have their yard signs out there that so and so sold this home photographers, if you think of a lot of them are independent and, I mean, there are a lot of communities of, you know, even just online. Of great, let's, can you help me with this client? Can you, I mean, we've worked with photographers, and we've seen part of their social content is just how to run a business, because they've built this network of creatives that they work with.

Julie Maskulka

18:21

So yeah, they may be competing with each other, but a lot of them too, or, you know, maybe they're in different geographies, or they serve different industries, do different types of photography, like, they still kind of have their little piece of the puzzle that they all still are helping. I just think there is a lot more of a community mindset of, Oh, can you help me figure this out? And a lot of them too, if you think of creatives who are now trying to run a business, I think that's right, something to where they lean into that community a bit more, right?

Ellen Yin

18:52

No, that does make sense. Like you operate kind of more in that collaborative mindset. And I guess that makes sense too, because, like in real estate, like, typically you're either a commercial or residential, and it's like one or the other. Whereas with photography, there's so many individual niches. You could be a wedding photographer, a newborn photographer, family portrait branding. So, like, there's so many more sub niches that I feel like it's a little bit easier to kind of refer out or find opportunities to kind of collaborate in that way. So that makes a lot of sense at the beginning.

Ellen Yin

19:24

You mentioned too that this whole gifting strategy really started because of that inbound demand that you were receiving these days. Are you spending a lot of time or staff resources on outbound, pitching to corporate clients? And if so, can you, can you kind of break down that process, like, who on staff at the corporate brand? Are you pitching? How do you find their contact? What's your initial outreach look like, and what are you proposing in that initial outreach?

Julie Maskulka

19:52

Yeah, and that's something we're still experimenting with. But, you know, initially inbound, it was our current customer base, so we do a lot more. I. Proactive outbound, reach to our customer base. To say, by the way, yes, we do do corporate it's much more formalized now, but that's still our audience. Early on, we tried to do a lot more outbound. This was two years ago when we were piloting a lot of different parts of the program, and it was really hard, because you have so many different industries, you actually don't know who the buyer is, it's not just title, it's function.

Julie Maskulka

20:22

So do they work in procurement? Do they work in marketing? Do they work in HR? It's, it's hard, so we tried to actually tap into communities. So let's work with HR professionals, and, you know, connect with them. Going back to the schools examples, we did the same thing. We actually sponsored a big conference at a school. And they were, you know, we were surrounded by Ed Tech platforms, also displaying stuff. And then we were the fun Candle Company, and, yeah, and they came up. So we try to just take, you know, are there really small moments where we can, you know, not just send them a cold email that didn't work, but can we just happen in the right communities?

Julie Maskulka

20:57

And it's always going to be a bit of a gamble, but if we can try to just focus on the high value ones, right our better potential, and then we'll probably get to it. But we actually do a lot more outbound through the distributors, because they have that network that we don't always know how to because they they do know who's the procurement and the strategy and the marketing and the events and the HR at all the different companies so and they have that contact. So we aren't going to try to take that from them. We're going to try to, you know, build that relationship with them, to tap in from that perspective.

Ellen Yin

21:29

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Ellen Yin

22:58

Can you share a little bit more about your distributor network, like, Who are these distributors? How do you connect with them? And what is that relationship look like in terms of, you know, what they're responsible for versus what you are? And I think for a lot of our listeners, maybe we've never, you know, there's a lot of us who haven't worked with distributors before, so understanding even, like the the financial aspects, like, what percentage is going to these distributors? Is there a fee to buy into be part of a distributor network? Any insight you want to share there would be really helpful.

Julie Maskulka

23:28

Yeah, of course. And the distributor network is new for us, because when we were trying, you know, I mentioned earlier, we were doing cold emails, and it wasn't quite getting there, that's when I paused and said, okay, like, what has worked for us in the past. And five years ago, when the business was an accident, what worked with showing up at a trade show, letting people see our stuff, they got it and then they wanted it. So last year, we did our first trade show. I actually, I didn't know much about distributors, either how it worked, and I'm kind of a I have two modes. I will either just jump in and figure it out later, or I'll pause and then reflect. And I've done both with this network.

Julie Maskulka

24:04

But our first trade show, we went to Vegas in January for four days and got about like 500 leads of distributors, wow, samples. And that was really, I mean, it was a bit of like, just information overload, trying to figure out. But we slowly, you know, the first, if you think, at the very top of the funnel, we just first had to let them know we are here, and we make candles, and then we, you know, it's a very old school and relationship based industry, in a good way. So we had to really nurture those relationships. And then when we did outreach, it wasn't just, okay, great. Here's an email blast. It's, can we talk for 20 minutes? What are you working on? Okay, let me give you some samples you work with healthcare. Let me give you five healthcare mock ups that you can take your clients, instead of just saying smells like your brand and marketing plan, which is kind of our usual basis.

Julie Maskulka

24:54

So we've slowly had to figure out who the right distributors are of because if you think about it. So when you work with a distributor, they are selling our product to the customer. So we have a double cell in a way, that they are selling all sorts of things to their customers. So they have to, we have to make sure that they're not just selling a candle, but selling a candle that, you know, makes a statement and isn't just going to be our logo. So we had to make sure that they got it too, because we didn't want to just turn into this promo company, yeah, which is what the distributor network is, and not in a bad way. It's just that's not we did not want to pivot and just become this white label Candle Company. We wanted to stay true to who we were.

Julie Maskulka

25:34

And then on the economics of what you were asking before, the usual breakdown is we do it just by quantity, so it can be anywhere from 30 to 50% and then it's a very interesting network. Just I always say I need a Rosetta Stone to understand all the different things of how it works, because they're used to like setup fees, but we don't have setup fees, or they ask for all different things. So we made our pricing really clean. We said it's, here you go. This is what it is by quintee, and shipping is included, and no setup fees, because we just wanted to streamline it and make it really easy to get our product out there without having to go back and forth a lot of okay, here's your quote, and let's nickel and dime you on that and that, right?

Ellen Yin

26:16

So just to clarify, these are promote promotional companies. They specialize in promotional products and gifts, and then they might have different like sectors that they specialize in, like you said, healthcare, for example. And you're not necessarily selling your products, like in food and beverage. Like when you work with a distributor, you're selling maybe wholesale to them, and then they're selling at a markup to, I guess another wholesale price to the to the to the bar or the grocery store, and then they're doing the final markup for the customer. So you're not doing that, but it's more so like based on whatever purchase orders their clients are are making of anecdote candles, you are just giving a percentage commission to them based on volume. Is my understanding correct?

Ellen Yin

27:00

Okay, that's super helpful. Thank you for sharing that. And it seems like trade shows then, like, if any of our listeners have product based businesses and want to get into corporate gifting, is that the best way to get in front of these distributors?

Julie Maskulka

27:11

I think so. I think, you know, that's their world. They see so many things all day. And for us, I mean, some people hated it because we didn't have a logo, or we couldn't do the 10 things they wanted. But some people loved it because it was fresh and new. And you aren't going to get that immediate feedback unless you're there, right? And I think, you know, it's also, if you think of just how many emails people get, like, I turn things away all the time. It's simple. It takes a little bit of time, but I still think it's one of the best ways, at least, you're going to get the highest return your first one or two trade shows that you do. But yeah, I still think it's just the easiest way to get your stuff out there. And then obviously what you do with that list of leads is up to you, right?

Ellen Yin

27:54

And I'm assuming you still get the end customers information, because they have to work with you to, like, design their candle or or is that not true? And you actually don't get gain access to to that information? Correct?

Julie Maskulka

28:07

We don't. And, I mean, it's the distributors relationship, so kind of what I was used to before, if we have to sell to them, to sell to their customer, and got it, and we want to be really respectful of that relationship, and we don't want to interfere with that, because, right, we're selling your customer a candle today, but next week, you may have to sell them T shirts, and we don't make T shirts, and we want to make sure that they're still, you know, positioned to serve that customer in any way that they need to.

Ellen Yin

28:33

Do you find that when you're just kind of evaluating opportunity costs for yourself here, do you feel like the increased volume and maybe new clientele that you get through distributors makes it worth it, even though you lose, let's say, other aspects, like access to customer information for reselling and, you know, reduced margins, like is the trade off now that you're, you know, a couple years into this, is it worth it? Or do you feel like in the future, you may try to focus the majority of your efforts on just directly selling to corporate gifting clients without the aid of distributors.

Julie Maskulka

29:11

I haven't decided that yet, because I still think it is worth it. I think distributors, they just have access to so many more clients, the right clients and right those clients. Also, some of them have you know, this is my person who gives me all my swag for the big tech company I work out like they just, yeah, they have that go to person like we are. Not everyone's go to person for candles yet.

Julie Maskulka

29:31

The other thing is, because there are not a lot of candles out there, that if we can suddenly get put into all of their presentation decks like we are, we're just getting tapped in a lot more than I think we were able to do on our own, specifically when I'm talking about making sure that we're being seen in front of the right audience, because we did spend a lot of time pitching, and maybe people thought that was cool, but they didn't actually need a candle or a corporate gift. So distributors, they have people who need things. That's the easy way to run a business.

Ellen Yin

29:59

Yeah. Yeah, no, that's an excellent point, even if, like you said, maybe candles aren't their their gift of choice for that particular occasion, just the fact that you're included in the brand deck, and you know, your level of awareness is being increased through through this strategy, I think that alone, yeah, makes a ton of sense, compared to, you know, spending your marketing dollars maybe elsewhere to gain that same level of widespread saturation or awareness as a candle brand.

Ellen Yin

30:26

I want to get into some of the metrics now, because I know that's what you know is really juicy for our listeners, and I'm so grateful that you were so transparent in sharing these with us. So your average order value for a corporate gifting client is $2,727.61 I love the specificity down to the penny, and the average number of items that come in a corporate gifting order is 176 now you did add a note here that your minimum order quantity is 48 but it was previously 96 and lowering that minimum order quantity actually helped you get More first time orders, and then the customers would come back and reorder again. So I would love to understand like, how did you nail down 48 as the magic number? If you started with that 96 what were the telltale signs that that number wasn't working for you? And why 48 specifically as the new MOQ?

Julie Maskulka

31:17

Yeah, we led with 96 so when we started corporate gifting, it's crazy. Like, all we do is change the label. In the beginning, we outsource the label printing. And for those who have a product business, when you do label printing, like it's one of the few things where it's really a volume game. Like, if you buy more, you will save more, and that's because when you're buying 100 labels, it still takes the same amount of time to put things on the press. So it's actually pretty expensive that we were paying almost the same amount on the label itself than we were for all of our other cogs. And that's we looked at a ton of label providers. So that's just how it is.

Julie Maskulka

31:54

So we did 96 just from an economic standpoint. Everyone was asking for 48 though, and 96 really was a barrier. And so, you know, because we were really trying to build this out. And first you just have to get customers, and then you can, then you can figure out how to, you know, make the economics work for you a lot more long term. So that's why we done we then dropped it down to 48 we still sometimes get requests for smaller and that's where it just feels like a little too much work for that low order. But we still do offer that every once in a while to people like more, just like as a courtesy, right? But we just 96 was too much of a barrier, and 48 seemed like appropriate if you think of like a bulk order.

Ellen Yin

32:38

Yeah, no, for sure, did you I mean, this might be a metric that's too hard to just, you know, think of off the top of your head. But do you remember when you made that switch over from 96 to 48 what percentage of previous like no's just immediately converted, just because of that reduced barrier to entry? Or maybe even just what your overall closing rate increased by when you made that switch over.

Julie Maskulka

33:05

I don't know the exact and it's also because when we started, like, honestly the first year, we were not tracking all the metrics, because we were just more than, like, Yes No Pass Fail. Does this work? But I will say, like, the first year, when it was 96 that accounted for like, one and a half percent of our revenue. And then the next year, and this was still like, pre, distributor, pre, you know, everything that we were trying to formalize, but when we at least had the menu that in our total revenue, or it accounted for about 10% of our total revenue, so I can't say that, you know, gave us that eight and a half point spread, but It definitely helped.

Ellen Yin

33:40

Yeah, no. I mean, it's a significant player, right? So that I think that correlation, what is that like? Correlation, not causation. I know it's always hard to differentiate, but in there, yeah, right, there's certainly some sort of connection or pattern there. Speaking of other patterns, your reorder rate is 15% which is amazing. How do you re target? And actually, I want to clarify here. Is that 15% your corporate gifting clients reordering corporate gift packages, or is this 15% of the end user who actually receives that candle as coming back to your website for individual orders?

Julie Maskulka

34:17

It's corporate gifting. Okay, we don't always know the end user, so it's, it's corporate gifting.

Ellen Yin

34:24

How do you incentivize them to come back time and time again? I mean, obviously, besides like providing a great customer experience and a great product, but is there anything else that you specifically try to do as an initiative to really get them to reorder from you.

Julie Maskulka

34:43

We've done a few things, and you know, when I alluded to earlier that we have tiered pricing. And one thing that we found is that sometimes people were right on the cusp of, Okay, should I buy it now or let me wait? And we came out with something, you know, okay, maybe they do need more candles later this year, but they can't buy. Them right now. So we offered warehousing, which is just a fancy term saying, you know, if you commit to ordering 1000 candles this year and you only need 200 at a time, we'll break those orders out for you, but you'll still get the same price as 1000 units. Oh, wow. Okay, less and again.

Julie Maskulka

35:16

Because for us, the biggest variable price is just the packaging itself. So if we know that that's covered, then that's fine. We'll, you know, hedge it and make sure we can pick that up. So that was one thing we did. We tried different incentives. Of, okay, let's start a referral program or things like that. But corporates are not in always incentivized the same way that a D to C customer is. Of, send this to your friend because it's a very in some ways, it's a transactional thing. Of, okay, I have this event and I need this thing, so we do also just kind of send some nudges of, Hey, is it time again?

Julie Maskulka

35:48

And we've done some small promos here or there, but surprisingly, what? Or maybe not surprisingly, just making sure that we can make it easy for them to get the best discount possible, whether that's through, you know, warehousing, or we've offered drop shifting to different customers in different locations, just the simple things like that, to take that logistical load off of them has been the biggest incentive for them.

Ellen Yin

36:14

Yeah, warehousing, that's super interesting. That's the first time I'm so I'm learning a new term here.

Julie Maskulka

36:19

I didn't know it either, but that's,

Ellen Yin

36:20

yeah, no, it's really fascinating. It's almost like, like a payment plan, but for like, product quantities, which is really, right, really, really interesting. So love that. Thank you for sharing that you did mention, though, in some of your pre submitted information prior to this interview, that even though you don't always know who your end user is that is receiving that actual corporate gift, or the corporate the candle from the corporate brand. Sometimes you do find that some of these people who receive the candles come back to you to reorder more of that scent, maybe that they received and loved.

Ellen Yin

36:55

Do you find that to be just completely organic, like someone you know loves the candle, and they just kind of look at the label and they Google anecdote candles and just end up back on your website. Or is there any sort of retargeting campaign for those people, especially if you don't know their information? I'm not sure how that would work, but just just kind of curious if any part of this is like outbound, or if it's all just inbound returns,

Julie Maskulka

37:19

not outbound yet, but we have explored it, and let's do another podcast next year, and I will have a better answer, because we see concerns to that we've thought about. Yeah, so that's a bit of a challenge, but actually, so there's two parts of that. It is inbound, and that's one reason why, going back to earlier, when I said we have a menu, and we're really clear about what you can and cannot change, even though people don't seem to care about the fragrance, some of them want to change the actual notes. So all of our candles are, they have two things. So it's, you know, Amber and citrus or whatever. And sometimes people like, oh, I don't want it to say Amber. I want it to say sandalwood. And so we won't change that. We say, No, this is an in market fragrance. This is what they know about.

Julie Maskulka

37:58

That's a bit of a tangential But coming back to your original question. It's all inbound. And the only way we can kind of track it, and we do this a lot with our retailer accounts too, is oftentimes people will search. They aren't searching for the fragrance, they're searching for the candle name and the anecdote. So they'll search, you know, smells like private planes or whatever. That's just enough to kind of know. And again, you know, it's more signal to the noise than a clear metric, but it's enough to know someone, someone really cares enough to actually search for this on our site. And yeah, get there, get that information. So right now, it's very low five. That's how we're doing it. And again, we're also still building this out that we do want to be a little bit more formal and proactive in the future.

Ellen Yin

38:43

So what happens then? Like that example that you just gave, when a customer comes to your website searching for that very specific anecdote, obviously, that one was connected to the private jet company. It's not a line that you publicly carry. And so if they want to reorder that exact anecdote and that exact scent and branding and everything. Do you fulfill an order like that, or would it not make sense, because then it's just an individual now reordering like one or two candles?

Julie Maskulka

39:10

So because we sold that product to whether it was through the distributor or the corporate like, we aren't going to sell that exact product directly to the customer with their logo, just because that's part of the terms and doesn't feel appropriate to like, yeah, here, here's another candle with someone's logo. And, you know, it could be something they I mean, candles are probably, I don't know the actual statistic on it, but I think they have a very high like regifting, that they may have received it from someone else. So we don't do that, but we do, we do have two things.

Julie Maskulka

39:39

We upload all of the anecdotes that people have created in the past. So if you type in private planes, and that was actually that used our oak moss Citron fragrance, for example, it will populate that search result. And then we also do have a custom candle version on our website just for the C customers, so it will direct them there. Of Do you want to create your. Own, and it's, you know, specifically for people who just want one candle. It's not going to have their logo, but they can, you know, use the exact same fragrance and create it however they want.

Ellen Yin

40:10

Got it, okay. That makes a lot of sense. And have you found any data indicating whether corporate gifting overall is more profitable for you guys, then the D to C, the direct to consumer sales, whether it looks like, you know, labor costs to actually fulfill the orders, or maybe even the cost of acquisition of a corporate client versus a end customer. Do you have any thoughts you want to share with our listeners on that piece?

Julie Maskulka

40:36

Yes, it is for us, and that's because we've found a way to make it very scalable where, you know, we're really just changing the label. We are not going through. And, you know, we do it like a lot of custom with a lot of our retailers, and that's just a totally different game with the Yin economics and the R and D behind that of going through the vessel design and new fragrance every time. But because this is our core line, we have six products, and all we're doing is changing the label. It's a pretty you know, the actual cost to produce is not that different than anything else, if that. I mean, obviously sometimes there are different requirements of they want it individually boxed or but that's, you know, that's also an add on, and then customer acquisition.

Julie Maskulka

41:18

I mean, I will say the trade shows are a much bigger expense, but it's also you have to do that to show up and, you know, cast a big net all about the follow up. So that's something this year that we're thinking about. How can we now that we have, so, you know, this top of funnel, we think we have a good, you know, group of distributors, for example, how can we now go down a level, and are there different channels that we can tap into, nurture those relationships and convert those leads differently, right? So, because it's a volume game that you're it does work out for us in our favor.

Julie Maskulka

41:49

The other thing is, like the business started with retail and wholesale, and that's always been how we kind of know how to operate a business. Like, yes, we have a website and we do have a lot of customers, but we were never, you know, a pure D to C place. So the wholesale is something that we're, we're used to, just in terms of how, how do we produce these large orders, and do do that efficiently?

Ellen Yin

42:10

Thank you. Super insightful. To wrap up this case study, then I guess I'll kind of follow up to that final point you made about, you know, your origins being in retail and wholesale. Have you ever seen a use case where a corporate brand came to you and said, hey, you know, we want to do this, like custom candle, right, using your normal corporate gifting channel. But instead of gifting it, let's say to our community, we actually want to sell it as, like branded merch to our community. So they're not quite fitting in that category of like a retail shop that wants to maybe constantly stock these and become like a wholesale account, but maybe they want to do just like a limited edition merch drop for their community. Do you allow that use case and and if so, any any details around that you want to share?

Julie Maskulka

42:54

We've had a few, and sometimes it comes through like a PR agency, and it's hard, because kind of what you're describing is it's not a pure brand collab, and that's usually what we would try to convert it to, because if it's going to be something that, you know, you're also marketing, we want to be there with you on that. And then it may also change, you know, the look and feel of the product. But we haven't encountered a lot, but we do, where we do it is, like, if they're launching a new product, and maybe they're doing it in their media kits. Like that's actually a very common use case. So maybe it's not always selling on the website, but they're using it for all of their press kits. We've done that with musicians too. Of let's, you know, announce this new release.

Julie Maskulka

43:31

If it were something where they want to sell it on the website, the economics may not work out too, because they need to add, you know, a spread to that. So you haven't gotten there yet. And I do think if that came our way, we would actually try to, like, pitch it as if there's the right brand fit, that we'd want it to be more like a collab than just a great year by this product and sell it, right?

Ellen Yin

43:53

Okay. No, that, that totally makes sense. Thank you so much, Julie, for just sharing with such transparency. I learned so much always being in this seat and and getting to kind of peek behind the curtain of business models that are so different to what I operate day to day in my own business. So I know our listeners, especially those running product based businesses, really appreciate it too. Where can our listeners continue to connect with you personally and or Anecdote candles online.

Unknown Speaker

44:18

Yeah, you can visit our website. Anecdote candles.com Instagram, too. Those are the two best places

Ellen Yin

44:24

Perfect. And I believe you have a special 25% off code for our listeners as well, right? Can you share that with our people?

Unknown Speaker

44:33

Yes, write it down so you don't forget. It's 'CEO'

Ellen Yin

44:36

Perfect, easy to remember. So that code will be below in the show notes. Also, all the links that Julie mentioned will be below in the show notes. So go check out their website. It's so fun. Honestly, I like spent an afternoon just reading through all of the Anecdotes. It really is, especially if you're someone who likes witty humor, I think you'll really enjoy the different anecdotes that are on their candles and Julie, thank you again for joining us. Thank you all for listening in, and we will catch you in next week's episode.

Ellen Yin

45:10

If you love today's episode, send it to a friend. Tag us on Instagram at Cubicle to CEO, or give us a five star rating at ratethispodcast.com/cubicletoCEO. You can also access bonus episodes on our private podcast by joining the C Suite, our flagship annual membership providing exclusive cash savings content and an offline community for small business CEOs. Check out the link in the show notes to join us.

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