Nathan Resnick:
Hey, what’s going on. It’s Nathan Resnick. Welcome back to Product Sourcing Stories. Today we have some incredible e-commerce founders here, Cooper and Carlos, thanks so much for joining us guys. Before we dive in, I’d love for you to give a brief 30 second introduction about your background, how you started your e-commerce business and where you’re at today.
Cooper:
Definitely. Thanks for having us on. I’ll start out first, I guess. Carlos and I actually went to high school together, but we reconnected while we were studying business at San Diego state. We were both in the entrepreneurship program, had some classes together and definitely both knew after taking a few of those classes that we would love to start a business at some point. Carlos and I would sort of bounce ideas off each other. And I want to say it was like my junior year of college, Carlos pitched the idea for blankets with foot pockets. And for some reason that one just instantly made me go, yeah, let’s jump on that one and get things started. And we ended up launching in 2017, and have been going strong ever since.
Nathan Resnick:
That’s awesome. That’s awesome. So I want to learn, was this the first product you ever manufactured or was there products before that?
Cooper:
Outside of lemonade stands and things as a kid, this is definitely the first product I ever made.
Nathan Resnick:
Nice. So walk us through that process. I mean, how did you find your first factory?
Cooper:
Yeah. So the first batch that we ever made outside of prototyping and stuff, which literally just involved us going down to Jo-Anne Fabrics and getting sheets cut off the roll there and stapling it or hot gluing it together to form the pocket, just in our family rooms. Initially the first batch we did was we decided to sort of split up the process. So we ordered fabric wholesale from literally, I think it was fabric.com. And I ordered their entire inventory of gray fleece just on a big roll.
Nathan Resnick:
Wow.
Cooper:
And had it shipped to my parents’ house. And we had the most trouble basically finding a place to have it cut and sewn. And at this time we were thinking, how hard could it be to get blankets made? That’s the easiest product ever in our minds.
Nathan Resnick:
Right.
Cooper:
But the thing we didn’t really think about was since we were doing everything domestically for that first small batch, just the price of labor, the price of inventory, we were already almost close to cost of what we were hoping to sell the product for just getting that material. So we looked around local cut and sew places. We found some places up in Vista and Oceanside that were doing more t-shirts and clothing production, and it was going to be over doubling our costs to have them make each blanket. So for that first batch, I actually just went down to Target, bought a pair of scissors, taped a bunch of tape measures to the floor of my parents’ family room and built my own little sweat shop.
Nathan Resnick:
Wow.
Cooper:
And just pulled the blankets down the role, sliced them with the scissors. And then Carlos pulled some strings within his connections, and his dad connected us with a lady down in Chula Vista, which is here in San Diego. And she agreed to sew them for $5 a blanket in her apartment with her sewing machine. So we actually managed to get those made in time for launch, but she had fabric all over her apartment. It was like, I’m not sewing anymore blankets. I did 100 for you guys, and that’s it. And so after that we decided we definitely need to figure out how to get this all made overseas. It was just the only logical option, because we really needed to drive costs down as quickly as we could, if we wanted any chance to turn it into a profitable business. And then I’ll let Carlos takeover for the next step, because after that, we started outsourcing it to China.
Nathan Resnick:
Got it. Yeah. Carlos, let’s hear how you guys figured that out.
Carlos:
Yeah. So again, I was connected with you via SDSU and the Lavin Entrepreneur Program. So I think you had briefly given us a rundown of how Sourcify worked. I think this was, I believe around 2017 as well. I don’t think that we got things into production until mid 2018, but yeah, just got connected through a manufacturer through you guys. His name is Benny’s. I believe he’s located in Hong Kong and I mean, he pretty much helped us manufacture our latest batch of blankets, which we got, I’d say first… I believe it was February of this year. So things have been going well. The costs have been low and we’re very much looking forward to continue to work with him.
Nathan Resnick:
Nice. That’s awesome. I didn’t realize we had helped you with that, but that’s awesome to hear. That’s great. What fueled your final decision to work with with this factory?
Cooper:
So more than anything really, was just that they were responding to our emails. I think we got in with you guys really early stage. We paid, I think 500 bucks or something. And you guys basically just connected us with a number of verified factories over in China and just connected via email. And there was actually a batch that we produced in between this latest one and the first one where we just went on Alibaba. And we finally, I don’t know, six months into the business, learned that cut and sew was the industry term for textile manufacturing. And we didn’t know anything about the fact that most factories selling blankets could cut them and fold them, and sew the pocket that we have into it, so we were trying to find specialty blanket factories and stuff.
Cooper:
And there was one batch before the one that we actually used, you guys connected us with, where we ordered the product, again, just rolls of fabric from China through a factory on Alibaba. And same thing, we were just reaching out and trying to get a good price. And with that batch, we actually went down to Mexico to have them sewn. So this time we connected with a company near the border on the U.S. side that we paid to take them down, find some factory in Tiawana that could cut and sew them, bring them back. But same thing, after import and export duties and everything with that, it’s still ended up being pretty expensive. So then this last one, we had been talking with the poor guy, Benny from the factory for probably seven or eight months via email before we actually pulled the trigger and ordered something from them. But they really came through, which was awesome.
Nathan Resnick:
Nice. That’s good. I mean, it’s all about the relationship when it comes to manufacturing. So it’s good to hear that even though it took quite a few months to make it happen, it finally came through. So that’s amazing. I want you to walk us through your idea to product process that you follow. I mean, I can imagine now that you’ve done this once, you probably have a bunch of other ideas that you’re thinking about launching, can you walk us through now, how you decide what ideas to bring to life and then what process you follow?
Cooper:
Yeah, totally. So I think for us as a small business, it’s bootstrapping it. One of the biggest lessons we’ve learned when it comes to manufacturing specifically is not winding up with a bunch of toxic inventory that we don’t have the capacity to move quickly. So each time that we produce the batch and the reason that we’ve been selling it in batches, is largely just because we end up spending the majority of our budget on just getting blankets produced at a reasonable price. So economies of scale and our capacity to try a product that we can actually afford to have made and then still as a small business, have money leftover to budget. Because it sucks having 500 blankets sitting in a closet and then $60 left in your business account when you’re fresh out of college and you don’t have any way to move it.
Cooper:
And I think that finding that line between if we want to try something new, maybe focusing less on getting it at a profitable price point and more just getting some that you might be losing money on those individual sales. But you still have money to actually test the market, get it out there. And then you can commit to getting a larger amount. And then also, with print on demand websites and those kinds of things. Now we can test adding clothing merchandise, we’ve added socks to our website that we were able to design, custom socks. And then those are just print on demand if somebody adds it to an order. But as a small business, that’s one of the biggest things, has just been, can we get this made? What price can we get it made? But also how few can we get made? Because a lot of those factories over in China and stuff have minimum order quantities of 500, 1,000, 10,000 units. And that can definitely be a big roadblock for a new business.
Nathan Resnick:
Totally, totally. I mean, I think that’s the key right here is, how do you test a product with the least amount of budget to de-validate that idea? And I want to talk about validation. I mean, when you think about launching new products, what’s your process for validating that with customers?
Cooper:
So the last batch that we did was a little bit unique, because we actually ran a Kickstarter campaign for it. And that was the first batch of blankets where we essentially had our customer base decide the colors and some of the design elements of what we produce. So the first batch that we did, we were in this little incubator at SDSU called, the idea lab, and they really helped by having us go and do a bunch of interviews and market testing on campus. So we interviewed probably 100 students, and were surprised to learn that neutral colored blankets were by far the most popular. I think more people said that they would want an olive green blanket then a blue or red blanket.
Nathan Resnick:
Oh, wow.
Cooper:
So in our case, we opted to go with a gray color scheme for our first batch. And then our second batch, we got a little cocky and we decided to launch a black blanket and then a mint, icy blue color that was unique. And the black sold pretty well, but there was really no rhyme or reason for why we chose the blue. We were just like, it’s something different. It looked cool.
Nathan Resnick:
Just sounds cool. The icy blue…
Cooper:
Yeah. We called it the cool mint Bomfy, but there was no market validation for that color. So this last batch, we had a good amount of Kickstarter backers and we sent out several rounds of surveys until we narrowed it down. Because our manufacturer could only do a certain amount of colors for the size of batch we were ordering. And so this time we wound up with a pink lavender skew, we brought back the gray, because it was really popular the first time.
Nathan Resnick:
Right.
Cooper:
And then Carlos, what’s the other color? Oh, a midnight navy blue-
Carlos:
Midnight, yeah.
Cooper:
Yeah, which is really popular as well. So we let our customers choose the colors this time and went with a more data backed approach in terms of choosing the designs, instead of saying, well, the two of us think this is cool. So hopefully all of our customers will.
Nathan Resnick:
Right, right. And when you guys handle freight from your factory, is that done by the factory? Or do you guys have another freight forwarder that you work with individually?
Cooper:
So we basically worked with the factory up until it arrived at the port of Los Angeles and then worked with a freight forwarder at that point. We’re still pretty new to the international shipping process. So I mean, with us, it’s the first batch where we just ordered the product from China or the material, I should say. It arrived in Long Beach and they contacted us and said, you need to contact your customs broker, so you don’t get charged warehousing fees. And we literally were like our who? And that’s a big thing for businesses like ours, is we didn’t realize that import tax and customs fees we’re going to tack on a couple more thousand dollars to get that inventory here, which only added a fractional amount of cost per unit to us.
Nathan Resnick:
Right.
Cooper:
But navigating all of that, right now is we have the factory basically handle everything until it gets to the U.S. I think we’ve worked with a different customs broker every single time to get it to us. And then we’re packing and shipping orders just out of our apartment.
Nathan Resnick:
Got it. Cool. What system are you guys using to ship to customers? Is it ShipStation or Stamps?
Cooper:
We’re just using Shopify’s default right now.
Nathan Resnick:
Okay. Nice.
Cooper:
We haven’t really looked at other options. Ideally I’d love to get to a point where we’re just using a 3PL or something to-
Nathan Resnick:
Yeah, totally. Can you tell us about either a manufacturing disaster or manufacturing success story that you faced along your journey?
Cooper:
Yeah. Carlos, do you want to share the story of the patches on this last batch?
Carlos:
Oh, man. The patches. Yeah. So yeah, just, I mean obviously one of the things that we’ve come to learn is the communications with the manufacturers can definitely be a little bit more challenging with the language barrier. And obviously they’re on the other side of the world. So we’ll be getting messages from them at three, four in the morning and stuff. And so originally they had sent us a sample. I think it was two or three samples. The patch, the way that we differentiate or pretty much put our branding on our blankets is by a patch. Originally it was just with the logo, but now we’ve added both the logo and the name on it. And so originally, we wanted this latest batch, have it look more sleek. Because originally it was just a one by one square. I think it was three inch by three inch of the logo. It was big.
Carlos:
Some of the feedback that we got, they had said that something a little more subtle would be a little bit better. So reduce this, and it was more of a rectangular three by one logo patch. And so he had sent us the samples. They were perfect, exactly how we wanted them with the brand, with the logo name or sorry, with the logo and the brand name. So when it was time to put in the order, they were sending us pictures of the updates of where they we’re at. And we had seen that they had put on a logo, a square logo that I’m not even sure where they got it from. Cooper, do you remember where they got it from? I guess they had put it on hundreds of the blankets. And so-
Cooper:
What happened was-
Carlos:
Yup. Go ahead.
Cooper:
The patch was correct. Sorry to cut you off, Carlos. The patch was correct, but the location was a little bit off. It wasn’t square in the corner of the blanket. And I very specifically remember, we had moved from email communication to WhatsApp, which was just a lot easier and more efficient. We hear back from them a lot quicker. And I remember Carlos messaged him and he specifically phrased it as, can you make it square in the corner, so it’s equal distance from the edge?
Nathan Resnick:
Right.
Cooper:
Which he misinterpreted as, can you make the patches square? So they just sort of reformatted it from this rectangular shape. It was our logo and then our name after it, and just like rearranged it into a big black square patch with a bunch of empty space. And then they sent us another round of samples with all three colors and they were perfect, but they had these weird new patches. So immediately we messaged them and we’re like, hey, these are perfect, but why did you change the patch? And they screen shotted and sent us the message we had sent. So it was just a translation, and us not being clear, but because we were running behind on production and Chinese New Year’s was coming up, which I guess they all take a month off and shut down their factories. They rushed it. And they just sewed the patch on all 500 units.
Nathan Resnick:
Oh, wow.
Carlos:
Yeah. And I mean…
Cooper:
If they undo it, it would leave a big, messed up spot in the blanket.
Carlos:
Yeah.
Nathan Resnick:
Well, it’s something you learn, manufacturing overseas. It’s always dealing with challenges with language barriers and design barriers. It’s part of the learning process and part of the growing process. Right?
Cooper:
Definitely. Fortunately, the patches weren’t the biggest deal in the world. So we had an internal discussion and decided, let’s just leave them as they are, get the inventory here. And we had customers that had pre-ordered through Kickstarter. So we didn’t want to keep them waiting over something that at the end of the day, wasn’t going to impact the way that they used or enjoyed the product.
Nathan Resnick:
Right.
Cooper:
But it could have been a much worse error if it had been a dimension or a sewing miscommunication.
Nathan Resnick:
Totally. Got it. Got it. So wrapping up here, last question is what’s next for you? What new products do you have in the pipeline or what growth channels are you excited by? What’s next?
Cooper:
Carlos, do you want to take that one?
Carlos:
Yeah. Yeah. So what next? I mean, as Cooper alluded to earlier, was that this whole process we’ve been bootstrapping, a lot of the marketing dollars that we’ve spent on mainly digital means have come from our pocket. And obviously any sales that we’re returning goes straight back into marketing. As of recently, I mean, right before COVID hit, we did get access to some funds pretty much used for more ordering of product, and actually carving out an actual budget for marketing. And so, as of recent, we’ve actually partnered with an agency that is going to help us scale our Facebook or Instagram ads and things like that, to hopefully get us to a point where we’re pretty profitable and able to actually use the money that we’re getting on sales to expand our product line.
Carlos:
Currently, we offer three colors, but in a world where we scaled up, we’re hoping to, offer more colors, offer an additional product line past just the blanket with the foot pockets. Some of the things that we’ve dabbled with is weighted blankets, just because we know those are a thing, a trend that people are really, really into right now. And so, we face a few hurdles and stuff through the manufacturing and through bootstrapping and stuff. But we’re looking to really scale things up, especially this Q4 to hopefully get us to a point where we’re able to offer more products, different colors and things like that, hopefully heading into 2021.
Nathan Resnick:
Yeah. That’s awesome. That’s great. Well, if listeners want to get in touch, where can they find you?
Carlos:
They can find us at our website, bomfyb.com. That’s B-O-M-F-Y-B.com. And then also our social media, we have a Facebook page, Instagram. Instagram handle is @B-O-M-F-B. So, yeah.
Nathan Resnick:
Awesome.
Cooper:
B-O-M-F-Y-B. @Bomfyb pretty much anywhere on the internet.
Nathan Resnick:
Bomfyb.
Carlos:
Yeah.
Nathan Resnick:
There we go.
Carlos:
There you go.
Nathan Resnick:
Cool. Well, Cooper and Carlos, really appreciate you coming on and thanks again for sharing your story.
Cooper:
Definitely. Thanks for having us Nathan. It was good to be here.