302 | Affordable Luxury: Partnering with the Right Suppliers | with Sergio Tache

Sergio Tache

Boring is good. Basic execution and focusing on the things that work for you is important. 

Chase Clymer

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. 

Today, I'm bringing to the show an amazing gentleman. I've got Sergio Tache, the founder and CEO of Dossier. They're a perfume house for the next generation. 

Sergio, welcome to the show. 

Sergio Tache

Thanks for having me. 

Chase Clymer

I'm excited to chat. So quickly, can you give us a little bit more details about Dossier, the types of products that you guys are bringing to market? What are you guys selling online? 

Sergio Tache

Yeah.

The general idea of Dossier is that we try to make great perfumes available for 99%. When we started the company, when we started thinking about the perfume industry, it just didn't make a lot of sense to us, at least to me. It didn't make sense that to smell nice, to go out on a date, to buy a nice perfume, you had to fork out 150 bucks plus. 

We just thought there's got to be a better way of doing this. What we did is that we initially reproduced famous scents and we manufactured them in France with the best ingredients. And obviously, the great car friendship that comes from France, in the southern part of France is a village called Grasse. 

The general idea again is that instead of selling them for a crazy amount of money, we sell them at a much more affordable price so that everybody can enjoy smelling nice and enjoy these great scents. 

Chase Clymer

That's amazing. 

Well now, you alluded to the problem that you were looking to solve. Can you take me back in time? Where did the idea for this business slash product come from? What was going on? 

Sergio Tache

I've been in the Ecommerce space for a while now, and especially in beauty. And I've always been fascinated about how we can give back more to customers. It just didn't make sense to me that some of these great products in beauty had such high margins. 

And when we started looking at the perfume industry in particular, it'd make even less sense. 

Just to give you a quick stat that I like mentioning, when you go to Sephora and you buy a bottle that costs $150, $200 plus, the cost of making the liquid inside the bottle, the actual perfume, is less than two bucks. And we just felt there's got to be a better way of making these great perfumes with high-quality ingredients available for more people. So that's how the idea started. 

And we launched with our impressions collection, which are perfumes that are inspired by luxury scents. And that's really what drove the company off the ground initially. 

And then after that, we launched our original selection, which are our own creations. And we're a pretty good product. 

Actually, one of our perfumes recently won a Best in Beauty award. So we're super proud of that. 

Chase Clymer

That's amazing. 

Sergio Tache

But the idea is that these two collections live within the Dossier world. But the North Star of the company is and will always be great ingredients, high craftsmanship, but at an affordable price for everybody, and not just the lucky few. 

Chase Clymer

That's amazing. 

Now, can you talk to me about how long did it take to go from this idea gets stuck in your head to you got a sample product in your hand? 

Sergio Tache

So I had a roadmap in my head because this was not my first company. The blueprint is pretty much always the same. Once you have that idea, “Okay, how can I make this product?” So you start talking to a bunch of suppliers in the perfume world. You start talking to people who will give you bottles, pumps, etc. 

And you know that in the beginning, you're probably getting it screwed on price because you just don't do industry that well. But the idea is just talking to as many people, as many suppliers as possible to put that first product together.

So that was the initial challenge. The initial challenge is that we wanted to start off with 20 different perfumes, so 20 different SKUs, which means a very low production in each SKU because we didn't want to launch with thousands of bottles. 

So the blueprint is the same, the challenges are different, but it's always about going out and finding, talking to the people in the industry, finding all the pieces and raw materials you need to start assembling this, or you can buy a finished good. We didn't want to do that. We wanted to build our own product. That was important to us. 

And definitely the most challenging piece for us was finding the right perfumer to work with. There's a lot of perfumers out there. It's still a pretty opaque and hard to access world. So that was the biggest initial hurdle that we had to cross is finding the right people to work with, especially on the perfumer side. 

Chase Clymer

Absolutely. And you mentioned that you launched with 20 SKUs.

Knowing what you know now, is that still the way that you'd want to do it? Or would you maybe give caution to some startups that don't have your experience? 

Sergio Tache

In general, first of all, it's a good question. 

The way I think about this is you need to spend the least amount of money possible to launch a first-of-item product. That's something I've always been very focused on. You don't need fancy branding. You just need a product. Is anybody going to buy my stuff? And once you validate that, then you can start scaling. 

For us, I think it was important to have a wide offering because I don't think we've got a lesson that we need to learn if we just offered, for example, sweet perfumes. Maybe for whatever reasons, those are not ripe perfumes and we would have given up. So we needed that breadth, but the focus was always how can we get this done for as cheaply as possible so we can test and learn. 

That's always been a big thing for us. We test products, sometimes it works, sometimes it doesn't. We move on. 

But I feel that, especially with the background I had, I felt comfortable launching those 20 SKUs. 

But what you need to ask yourself is, “How many products do I realistically need to get proof of concept?” And for us, we thought it was 20. In many industries and in many other cases, it will be significantly less than that. And you don't need to spend a ton of money on different products to learn whether this is viable or not. 

Chase Clymer

Absolutely. 

And I think though, to the credit of the brand you were building, I think the brand itself was part and part the product. You're trying to bring choices and variety and value to the customer. And you couldn't do that with a low amount of SKUs. 

Sergio Tache

That's exactly it. And what we're noticing is that when people buy on our website, they don't buy just one perfume. They tend to buy two or three perfumes. What we found out is that people are not interested in Dossier for the value per se. The value is a means to an end. 

What I mean by that is when people buy a Dossier, they want to experience great perfumes, but they just don't want to experience one. They want to have a wardrobe of perfumes. They want a perfume to go for work, a perfume to go out with friends. It's kind of hard to do that when the nice stuff costs $150 plus. 

The value that we provided, what it did is that it unlocked that whole experience and discovery process. And to your point, it would be hard to do that with just two or three parts. 

Chase Clymer

Absolutely. 

And so you alluded to this, but I want to ask one more follow-up and then we'll kind of move on with the journey. 

But you mentioned that you spoke with anyone that would pick up the phone and you were looking to find partners to help you build out this first product line. 

How many people do you think you talked to before you found a manufacturer that would allow you to order in quantities that didn't break the bank? 

For most listeners that haven't built a product, there's this thing called Minimum Quantity Orders. I forget what the... 

Sergio Tache

MLQ. 

Chase Clymer

Yeah. That's what I'm talking about. So let's talk a bit about that. 

Sergio Tache

I mean, we reached out to hundreds of suppliers. Hundreds. So this is not a number making up. It was well over the 100 mark. 

You need to cost a wide net. And when I talk to people who start companies and tell me, “Yeah, I reached two or three supplies,” No. That is not enough because you will be amazed at the depth. 

Well, especially in the beauty industry, I guess, but in any industry, you'd be amazed at the depth that this ecosystem has. So you need to talk to hundreds of suppliers for the different raw materials that you need, the different products that you need, just to make sure that you will get the right product. 

And what often is going to happen is, after that, I don't know, 70% won't answer you. Well, if you start with 10, you're finally starting with three. So that's not going to work out. 

So you just need to put as many chances on your side as possible because to your point, some suppliers or some suppliers did tell us, “Oh, you're not doing 100,000 bottles. Sorry, we're not talking to you.” 

So it's difficult to find the right small supplier to work with that's going to provide, first of all, good quality because if you don't have a good product, you're going nowhere. So you need to have a good product, but also who's willing to work with you in those small quantities. 

I always say this. Cast as wide as a net as humanly possible. Reach out to as many people and as many companies you can find. Do the research. Spend hours and hours on Google. And that's a good way to start because otherwise, you're just not putting enough trust on your side. 

Chase Clymer

Absolutely. And I ask these questions because I sometimes... I know what the answer is going to be. But I know that there's someone out there that needs to hear it again.

So I appreciate the answer. 

Sergio Tache

We all do. 

Chase Clymer

Oh yeah. 

Sergio Tache

We all do. We always forget... This is a common thing that you're going to see me talk about is back to basics. Execution is boring. There's nothing sexy about being an entrepreneur. It's about making sure that you get all the steps right. And step number one, just like we talked about, is making sure that you find the right supplies. There's only one secret to that, which is as many people as possible. 

Chase Clymer

That's amazing. 

Sergio Tache

Unless you have a special access you know specifically, which most people don't. 

Chase Clymer

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Chase Clymer

Well, let's talk about the next step, which I feel a lot of our listeners always get stuck at. They have a great product. You had a great product. How did you get it in front of customers? What was that go-to-market strategy? How did you get new eyes on this thing? 

Sergio Tache

That's a great segue. Just like I mentioned, I'm a firm believer that execution is boring. And just to take a step back, there's a whole romantic aspect of entrepreneurship where people say, “Figures great.” And to some extent, it's true.

If you fail because people didn't like your product, that's fine. You learn something very quickly and you move on to the next thing. If you failed because you didn't execute properly and you had a good product, but you didn't execute, there's no excuse for that. That's something that you need to get right. 

So going back to your question, I mean, boring is good. Executing the basic execution of focusing on the things that work for you is important. So for us, it was social media advertising, Google advertising, influencer marketing. 

We tried a bunch of other things and ultimately, you know, again, going back to the concept of this new shiny object syndrome, we realized that just focusing on these basic things and doing them extremely well was very important for us. So we put a huge emphasis on influencer marketing and especially on the video side of things. 

And the reason for that is we sell a product that requires some explanation. You can't just show a picture of the perfume and people are gonna get the concept. You need people to talk excitedly about the product and tell them, “Oh my God, this smells amazing. It smells just like, you know, little Boussaintel 33,” whatever. 

So we put a lot of emphasis on that and that helped awareness and also direct response. So that was important to us. But ultimately it was just that basic execution. 

I always like to say that we started selling perfume the hard way, which is online. That's not an easy thing to do. So then that execution, especially on the influencer marketing side where other people talked about a product was particularly important. 

And then related to that is just making sure that we offer an experience on a website that is adapted to the modern world. Super simple returns. You understand what we sell very clearly in our precious collection. 

We will say, citrus ginger inspired by Blur Channel. So it's very straightforward and a couple of things nearby, making that experience simple. And then also, “You know what? If you don't like the perfume, try it on, open the bottle, spray as much as you want. If you don't like it, send it back to us. We will refund you no questions asked.” 

So really trying to make that experience as simple as possible, combined with the discovery process of social media advertising, influence marketing. I think those were the keys.

But again, I'm not saying anything revolutionary here. It's about having a good product and then doing the basic things right. I think that's really important when you start off. 

Chase Clymer

Absolutely. 

And I'm going to ask you to, again, clarify something to the listeners that need to hear this stuff again. And this happens all the time at the agency. 

People will come in and they want to do a shotgun approach. They want to do 13 different things at once when they haven't maximized the channels that are already working. 

So again, can you talk about how you tried everything and then you focused on the three that were working and you just kept doubling down on it? 

Sergio Tache

Yeah. This is more specific to social media advertising. We tried Snapchat, we tried Pinterest, we tried a bunch of smaller platforms. Ultimately, at the end of the day, it's always the same stuff that works well. 

When you talk more broadly about channels, that was a particular focus for us. We really did not want to do anything else than online for the first couple of years because to your point, when you try to do too many things, you're going to fail. 

One, you're absolutely correct. We first need to optimize and maximize the opportunity within online and we still have some room to grow. But now we've started diversifying out. The company is 5 years old. We've grown quite a bit. So now we're starting to diversify our channels. 

But you are absolutely correct. Just focus on the basics. Focus on one thing at a time. And I'm repeating myself here, but I firmly believe that basic execution wins. Do focus on the one, two things that work really well for you, maximize that. Then when you feel like you're getting tapped out, then you start moving on. 

You can always try them and things. That's not the issue. You shouldn't be completely blind to it, but just make sure that you keep the efforts focused on what's really important for the business and what allows you to grow initially.

Chase Clymer

Absolutely. 

All entrepreneurs are builders and they get that shiny objects syndrome. And there's always something new and fun to play with. But if everything's important, then nothing's important. 

Sergio Tache

100%. 

Chase Clymer

And you're going to spin in circles if that's your approach to it. So I always like to make sure we highlight that here.  

Now, this is a pivot, I guess. Could you tell me about maybe one of the lows at dossier and how you guys got through it? 

Sergio Tache

The background of the company is we didn't raise a lot of money. First of all, because we didn't really need it. Second of all, because I believe you need some money to launch a brand in beauty, but you don't need dozens of millions of bucks. You can get to a good viable product without breaking the bank. 

So that's the background of the company. I always say 80% of my job as CEO is to make sure there's enough money in the bank. And one of the low moments is when I screwed up at that. 

So at some point, we're going to a fundraising process. That fundraising process, as usual, and everybody should know this and I learned the hard way, takes way longer than you anticipate. And at some point, we had literally $20 on the bank account. 

So this is not a number I'm making up. It was 20.33, if I remember very exactly. So that was a low moment. That was tough. That meant we had to have difficult conversations with our suppliers. 

Thank God they still trust us. They saw the growth. Obviously, this cash crunch happened right before Black Friday where any Ecommerce, this cash processing is going to be a bit depleted because they just need to invest in inventory. 

So that meant just making sure the employees got paid. That was the number one rule. The most important thing for me is that they didn't feel stressed out about that cash position. 

But yeah. Those were... I don't get stressed out easily. But those moments gave me some sleepless nights, which does not happen a lot. 

So, your number one job is to make sure there's enough money in the bank accounts. And as a CEO, just learn that money goes out the door much, much, much faster than you can possibly anticipate. 

And again, I'm not saying anything new here. I'm sure a lot of people in your podcast say the same thing, but once you actually go through it, you realize, “Holy shit.” I'm sorry, I'm not sure if I can swear, but... 

Chase Clymer

Yes, you can. 

Sergio Tache

But money goes out the door much, much faster than you can possibly anticipate. So be cognizant of that. Always give yourself enough time to do the next fundraiser if you need one. 

Chase Clymer

Absolutely.

I think just in sales in general, it's always like the money comes slower and it's not as much as you think and it's harder to get than you think. 

Sergio Tache

And everything is more expensive than you think. 

Chase Clymer

Oh yeah. Especially these days in 2024. But that's a conversation for a different day. 

Now, before I let you go, is there anything, any advice that you have that you think might resonate with our audience? 

Sergio Tache

Yeah, a couple. 

So number one, what helped me in my career, the number one thing that really... I used to work for a bank before. And that transition to entrepreneurship was not necessarily easy. 

But I think what made it considerably easier is that I had a great friend who became my mentor and who was really in the Ecommerce space. And just having that mentorship from somebody who knows what he or she is talking about is going to save you so much time. 

I think that's really, if you can find somebody in this space that can help you, go for it. I cannot say enough good things about that mentorship program. 

Number two, I call this ‘know what you're getting yourself into’. And I'm not talking necessarily about the entrepreneurship lifestyle, what you want to call it. I'm talking more about how you start the company, how you fund the company. Is it self-funded or is it VC money? 

There's no good or bad route, it all depends on what you want and what you think is best for you. There's pros and cons to both, but just make sure you know what you're getting yourself into because the routes are very different and have very, very different implications. 

Just to give an example, if you're probably self-funded, chances are you're going to grow slower. That's fine. It's not a big deal. And that's your choice. If you're going down the VC route, chances are you are probably going to grow faster, but that company is not yours anymore. Again, that's okay, but just make sure that you know these things and what you are getting into it. 

Especially once you start signing these contracts, decide these big life changes, the devil's in the details. Make sure you really understand the contract you're signing. Even on something simple like a convertible note, there's a lot of little details that can trip you up.

I cannot, this is boring, but I cannot emphasize this enough. Read that contract well, get advice and know what you're getting yourself into. 

Number three, I'm a big believer in focusing on the basics and in this case, focusing relentlessly on unique economics. The math is pretty simple. You sell stuff, that stuff has a margin. And how much dollars do I need to make by selling this stuff to cover my fixed costs?

The formula on that point of view is extremely, extremely simple. So we have this concept called contribution margin one, two, three. So we look at contribution margin after COGS, contribution margin after COGS plus shipping or fulfillment cost, and then contribution margin after COGS fulfillment cost, and then a CAC. 

I look at these numbers daily several times a day, even though it's a little bit unhealthy, but you need to focus on these numbers relentlessly because you need to know them inside out and understand, “Okay, I'm making stuff up. I'm making whatever it is. 30 bucks in order. Great. Okay. My fixed cost is a hundred. Therefore I need to sell at least four products, or at least four orders.” 

The math is simple, but you need to focus on that. 

Speaking of simple math, and by the way, interrupt me if I'm going on a tangent here.

Chase Clymer

No, no, no. This is super fun. And I'm already in my head. We're gonna have Sergio back. We're just gonna talk about this formula for 30 minutes. 

Sergio Tache

And then number 2 is a different formula. But your revenue... Ecommerce is not difficult. You're not putting a man on the moon. The revenue is really sessions times conversion rate times AOV. And if you want a light lifetime, you go times repeat. The formula is extremely simple. 

So you only have a couple of levers you can work on to increase your business. More sessions, better conversion rate, better AOV. 

Chase Clymer

I wrote a whole ebook about that formula. Yeah.

Sergio Tache

Oh, really? Oh, awesome. That's awesome. I'm glad we agree. 

But once you go into details of those specific “What can I do to increase my sessions?” Of course, there's a bunch of options you can do. But always remember, it's simple. Focus on these simple things. What can I do on each part of this equation to grow my business? So that's another thing. 

And then I mentioned to you about failure to execute. Failure because you didn't execute properly is not acceptable. I'm a firm believer that there's no charm or glory in that. 

And then the fifth point is... And I'm going to close with this. I know we've talked about it several times. I really believe that boring is good. Focus on the boring stuff. The basic stuff is really what's going to get you 80% there. Focus relentlessly on that and you'll do just great. 

Either you do just great or the second best option is to fail very quickly, which is actually not great but it's actually way better than failing slowly, which I think is the worst possible outcome. 

That was a rant. But I hope it helped. 

Chase Clymer

Oh, no, it absolutely did, Sergio. And I can't thank you enough. 

So the last question, I guess for you is like one, if people are curious and excited about the product, where should they go? 

And then two, if they want to get a hold of you, talk to you about something, what should they do? 

Sergio Tache

Yep. So for the product, dossier.co is where we sell our products in the US. We launched in Mexico, we launched in Canada too. We launched in Australia and the UK, soon to be in continental Europe too. But in the US, dossier.co. 

And then if you have a Walmart next to you, which is pretty much everywhere, you can go to any Walmart, any Supercenter, Walmart Supercenter, and you will find our perfumes. So we're present in all the Walmart stores. 

And if you want to reach out to me, either by email, sergio@dossier.co or through LinkedIn, whatever makes whatever is easy for you. And I'll reply. 

Chase Clymer

Awesome. Sergio, thank you so much for coming on the show today. 

Sergio Tache

The pleasure was all mine. Thank you for having me. 

Chase Clymer

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

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Until next time!