Ocochi

How We Started A $10K/Month All-Natural Bedding Brand

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Nan, Wendy and Jessica

Founder, Ocochi

$10K

revenue/mo

Founders

Employees

Ocochi

ocochi.com

from Chicago, Illinois, USA

started July 2019

$10,000

revenue/mo

Founders

Employees

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Hello! Who are you and what are you working on?

Hi there! We are Nanny Peggy, Wendy, and Jess, the founders of Ocochi. Three generations of women from the same family. After a lot of fun and hard work, we have Ocochi – our beloved family-run bedding company. We sell boutique bamboo bed linen and luxurious mulberry silk duvets that are sustainable and chemical-free.

Too hot, too cold and total restlessness. We’ve been there and known what a nightmare it can be and how seriously a poor night’s sleep can affect the next day. But once we had done our research into mulberry silk duvets and bamboo bed linen, we knew we had found something really special.

Bamboo and mulberry silk are not just hypoallergenic and natural, but also light, moisture-wicking and so incredibly soft… and, while they keep you comfortably warm they also prevent overheating and sweating.

After three years devoted to establishing the company, we soft-launched ocochi.com in mid-2019 in Chicago, USA. Although the long-term goal is to have a strong online presence, our primary soft-launch channel needed to be front stage with the customer and cost-efficient.

We loved the opportunity we had found and were passionate about it, but would anyone buy our products and, if they would, why and at what price?

We contacted various luxury apartment buildings around Chicago to ask if we could hold pop-up events in their lobbies. In our first three months we held 50 events, from which we have gleaned invaluable customer research and built many customer relationships – plus, all the revenue they generated has paid for our second inventory order.

What’s your backstory and how did you come up with the idea?

We came up with the idea back in July 2016 when Wendy went out to China to spend a week with Jess who was living and working in Shanghai. It was on a trip to a nearby water town that we came across local women who were fluffing up handfuls of a candy floss looking fiber and using it to make duvets. This was where we discovered mulberry silk duvets.

The skill and artistry of the women were incredible, and we watched as they made everything by hand to the finest standards as exemplified in the fine stitching. We were enthralled and came away determined to find out more.

On our journey into the story behind mulberry silk, we also came across bamboo bedding and immediately fell in love with it because it, too, was sustainable, soft and beautiful to work with. We saw the two products as complementary, both in their environmentally friendly origins and in the way that they improve the quality of sleep.

The next step was to find out whether there was a market for the products. We loved the opportunity we had found and were passionate about it, but would anyone buy our products and, if they would, why and at what price?

We established that there were some bamboo and mulberry silk bedding players in the market, but these were far and few between. The few companies that were around were performing very well with multi-million-dollar turnovers. Assuming we could match them with our brand appeal this was a tick for marketability.

With our research of competitor price positioning and supplier costs, we confirmed that there were margins that would enable us to proceed and ultimately turn our love for a product into a business.

Last, but by no means least, was the realization that by setting up Ocochi we will help people sleep better and help the planet. We discovered that nearly a quarter of Americans have sleep issues and that sleep debt is on the rise.

With cotton still being king in the bedding market, we were also shocked to discover the impact that it has on the planet and on communities. For example, 2.2 pounds of cotton, equivalent to one pair of jeans and one t-shirt, requires 20,000 liters of freshwater to grow. That could have provided enough water for 10,000 people to drink for one day.

By contrast, bamboo and mulberry trees only require rainwater to grow. They do not need fertilizers or pesticides, nor do they require annual replanting. One acre of bamboo will yield 10 times more than one acre of cotton.

According to the WWF, by 2025, two-thirds of the world’s population may be facing water shortages. Transitioning from cotton to bamboo and silk is one step closer to helping our planet and leading a healthier life.

We know that there have been giant improvements in the cotton world. Organic cotton uses environmentally friendly pesticides and efficient irrigation systems, which sounds great, but that’s not the whole story. Organic cotton can take up to three times the amount of water to grow than standard cotton. In other words, it creates a bigger problem.

Take us through the process of designing, prototyping and manufacturing your first product

The manufacturing process was a huge learning curve for us. With the Chinese being the artisans of bamboo and mulberry silk, our supplier journey was primarily focused on China.

Over the course of three years, we vetted over 30 factories. Initially, we had assumed that our focus would be on the vetting process and product quality, but we discovered a third and equally important element – relationship building.

Ultimately, in China nothing ends with a written contract, it comes down to trust from both sides of the partnership. Even with Jess’s understanding of the Chinese culture and language, gained at university and through working in Shanghai, there were still plenty of hurdles! It’s difficult to imagine how much harder things would have been without Jess’s experience.

On our first tour of factories, we openly admit that we were clueless and the only thing that earned us respect was the fact that Jess could speak Chinese. Thankfully, we have a family member, Geoff (Wendy’s husband) with a wealth of experience in the supply chain, so we quickly organized another research trip to China and whisked him along with us.

After significant vetting and the all-important go-ahead from Geoff, we finally picked our supplier. Funnily enough, this happened to be the first one that we had visited! We knew at the time we had a great feeling about the factory, but we also knew we had to be thorough and vet others to confirm our initial gut feeling.

So, you may be wondering why we chose this supplier ….

They offered unparalleled quality of fabrics
Repeatability in high-quality production
They had long term partnerships with Western companies also selling bedding
Factory conditions were excellent
They provided certifications for products and good working conditions for their staff
Last, but not least, we trusted them

Unfortunately for our bank account, they were the most expensive - at least twice the price of any other supplier. We knew this meant less profit for us, but we also knew that higher quality for the customer is what wins in the long-term. We aren’t looking to make a quick buck. We want to be a trusted brand.

In terms of design, we took what they were already producing and improved on this by adding classic details and the experience of three generations of women! Nan brought the practical element to the design, such as adding extra buttons and ties in each corner of the duvet cover that attaches to your duvet, stopping slippage. Wendy and Jess spent a lot of time researching simple, timeless designs and sourcing environmentally friendly packaging and accessories for the bedding, such as conch shell buttons instead of plastic ones and reusable jute bags so that every order is packaged like a gift.

Tell us how you launched the business and how you started acquiring customers

We self-financed the company 50/50 between Wendy and Jess (not wishing to put Nanny Peggy’s pension at risk) and therefore needed to be careful how we spent our capital.

The pop-up shops in luxury apartments in Chicago have not only generated revenue, but they’ve essentially been free research, costing nothing apart from the nibbles and our time. We pitch up with a few bottles of chilled Prosecco and boxes of warm beignets. Some days people are just so tired after work they’re not interested in talking, and that’s ok, but other times we are inundated. We judge our success on how many beignets we’ve eaten ourselves. A thin week is a good week of engagement for us!

At a typical event, we will speak to at least 10 fully engaged residents. Our conversion rate is 30% with an average order value of $300. The relationships that we build at the event later lead to a returning customer rate of 10%. Another 10% of our sales now come from referrals from these customers. So, all in all, these events have helped to build strong customer relationships, which is so important to a family-run local business in Chicago.

We’ve now taken the face-to-face events to the next stage and are currently engaging with buildings in other cities, as well as being included on their reward platforms and providing marketing material for residents. It’s an extremely cost-effective way of getting our name out there and building partnerships with leasing companies. So far, we are marketed on 30 rewards platforms and provide over 50 buildings with move-in packages.

How are you doing today and what does the future look like?

We’re turning over $10,000 a month which might not sound much to a big organization but to a self-funded family business in its first year, it’s a lot.

In the six months since the soft launch in Chicago, we’ve also shipped to Arizona, Florida, California, Wisconsin, Texas, and Michigan with inquiries from Italy and the UK. We employ a fulfillment company to process the bulk of the orders but if there’s a local one we’ll still deliver that ourselves. It adds to the personal service we try to offer.

Our future is focused on e-commerce and on driving traffic to the website through online ads, email marketing and of course through wholesale. Where Wendy is very experienced in face-to-face sales, Jess is going to take the lead in e-commerce growth.

What we are not going to do is throw huge amounts of money at advertising until we know what works, but already we have had a fantastic result on our email marketing with an open rate of 50% and a click-through rate of 2.5%.

Through starting the business have you learned anything particularly helpful or advantageous?

It’s great to do a soft launch and to trial the validity of your business plan. By this we mean that sometimes who you think is going to be your prime customer might not be or what you think will be your core product also might not be.

We thought our key customer would be women but it’s 50/50 with men. Out of all the men we have spoken to at our pop-up events, 95% suffer from overheating at night. Many of the women that purchased sleep at a different temperature to their partner too. Some even described how they have had to sleep with two duvets on their bed – one for each person!

Another surprise has been the mulberry silk duvet sales. There is a lack of choice for sustainable and temperature regulating duvets and increasing allergy problems to feathers. We have achieved 300% of our duvet sales target.

Treasure and nurture your customers. 20% of our business runs from returning customers and referrals. If you build and maintain active relationships with the customers you meet, you just never know how it will payback.

We’ve also learned that starting a business doesn’t have to be as expensive as you might think. As an example, we started to look for a business mentor and came across a free mentoring organization in Chicago called SCORE, which can help and guide you through your business plan.

We also discovered a local university that runs a law clinic twice a week to give students firsthand experience with small businesses. Instead of paying thousands for a lawyer to advise on the type of business structure we needed to employ for Ocochi and for contractual advice, we ended up getting all of it free. Always look around to see what free resources are available.

Most importantly, we’ve learned to be resilient and to keep at it. Whilst setting up the business, Wendy was diagnosed with breast cancer. This could have been the moment to give up but instead, we used the business as a positive focus and reinforcement of our bedding concept. By this, we mean that Wendy had to spend way more time in bed than planned, but this put our bedding to use and reconfirmed the importance of breathability and softness in both bamboo and mulberry silk.

After all the meetings and conference calls we had to host from Wendy’s bed, it’s now part of the Ocochi tradition to hold our 20 minute morning Kickstarter meetings in bed with a cup of coffee!

What platforms/tools do you use for your business?

Shopify has been absolutely fantastic. We are on Instagram and Facebook, but social media is one of the areas we are going to work on in 2020.

We speak to our supplier on WeChat. We have a strong working relationship, so this is a convenient and informal means of communication.

We do email marketing via Klayvio which is integrated with Shopify and offers simple and professionally pre-built email templates.

What have been the most influential books, podcasts or other resources?

Why we sleep by Matthew Walker was a fascinating read

How any startup can achieve explosive customer growth traction by Gabriel Weinberg and Justin Mares helped us plan our launch

How I built this: the unexpected paths to success from the world’s most inspiring entrepreneurs by Guy Raz was another inspiration.

Other resources – we would not be where we are today were it not for the many guiding influences from family, friends, and colleagues.

Advice for other entrepreneurs who want to get started or are just starting out?

Do your research to build a strong business plan. It can’t be said enough times.

But, just as important, it is being passionate about the product. Because we have believed in what we’re doing, it has helped us through the down days.

Remember that you can never get everything perfect. The day will come when you just have to take a deep breath and press the button and launch.

Expect knockbacks and remember not everyone is going to want to buy your product. Have strong shoulders!

Treasure and nurture your customers. As said above, 20% of our business runs from returning customers and referrals. If you nurture and treasure the people you meet, you just never know how it will payback. The nurturing of one customer in a one-bed apartment can lead to them purchasing bedding for all five bedrooms in their second home.

Have fun! Not a day goes by without something weird and wonderful happening, often at an event. Even if we have no sales, we meet a wealth of characters and thrive on people’s energy.

Nanny Peggy’s final words are “you’re never too old to start a business” #nantrepreneur