How We Started A $40K/Month Side Hustle Selling All-Natural Self-Care Products

$40,000
revenue/mo
2
Founders
0
Employees
product
Doppeltree
from San Francisco
started November 2017
$40,000
revenue/mo
2
Founders
0
Employees
1.63K
followers

Hello! Who are you and what business did you start?

Hey everyone, we’re Tony and Fei, a husband-wife duo at Doppeltree, an all-natural self-care product company in SF that helps people take a moment out of their day to look and feel better. A little over 6 months ago we started making enough profits that Tony decided to leave his full-time marketing exec position at a fintech startup to focus on the business.

We have three flagship products. Our first is an All Natural Rejuvenating Eye Mask. After putting on these eye masks under your eyes for just 20 minutes, you’ll look like you’ve had a full 8 hours of sleep. The second is our Anti-Wrinkle & Rejuvenating Gold Facial Hydrogel Mask, which basically takes the eye mask and blows it up 10x so you can get all the benefits of the eye masks for your entire face. Our newest product is a Vitamin C Facial Serum with Real 24K Gold Essence, where, you got it, we include real gold essence (i.e. flakes) that helps smooth out your skin and provides a glowing and radiant complexion.

We actually have another flagship product under our (original) Doppelgänger Goods sister brand, an Organic Cotton Cold Brew Filter Bag for DIYers who love making stuff at home, in this case, cold brew coffee.

We started earning revenue in December 2017 (the month we launched), but it wasn’t until July 2018 (two months after we launched our eye masks) before we started consistently selling $1,000+ per week. We became cash flow positive (total net income > total costs) around October 2018. We currently average around $40,000 in revenue per month, with 40-50% net profit, depending on how much we spend on paid ads.

how-we-started-a-40k-month-side-hustle-selling-all-natural-self-care-products Our Doppeltree Gold Series Bundle

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

I (Tony) launched our first product - an Organic Cotton Cold Brew Filter Bag - back in December 2017 - mostly as a side hustle/hobby alongside my marketing exec position at a financial services technology startup in San Francisco. I had a simple (financial) goal in mind when I started: find a way to pay for my expensive $15 lunches in the city :)

The reason I picked cold brew was because: I’m an avid coffee drinker (personal interest - check), I saw people going nuts for it everywhere (demand - check), I wanted to sell a simple product that wasn’t going to literally break during shipping (no product quality issues - check), and I needed to make money off of it (margin - check).

Selling on Amazon is great to get started, but start thinking about how you can diversify away from it as soon as you’ve hit a good rhythm with your sales.

A few months later Fei decided to get in on the business as well, so she followed her interest in the natural and organic self-care category. As a Mom with 2 little girls (3 if you count me too =), 2 aging parents that recently moved closer to us constantly calling for tech support, and a demanding day job, she was always looking for a moment of pampering. That’s where the idea of natural self-care products came to mind, and where we landed on the under-eye masks.

Insofar as expertise and background, Fei and I met getting our MBAs at the University of Michigan Ross School of Business (GO BLUE!) and between that and my marketing and Fei’s supply-chain and new product development job, PLUS a DIY attitude, we’ve been able to grow our business in a stepwise fashion.

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

We source our products primarily from China, via a network of trusted manufacturers that we’ve vetted, and some that we’ve also visited in person. Fei grew up in China and has over 10+ years of experience working with OEM/ODM suppliers on sourcing and new product development via her day job, so finding a high-quality manufacturer wasn’t too difficult for us. Day-to-day we spend most of our energy ensuring that they meet the highest quality standards of production and are able to source ingredients that are all-natural, sustainable, and organic, whenever possible.

From a very high level, we start our product selection process based on what fits into the overall brand, and also ideally, products that we can source from our existing and trusted manufacturing partners.

The process of finding a good manufacturer and getting started with them can take some time, so frankly it’s easier to work with one you’ve already built a relationship with. In general, we’ve found that an initial COGS (cost of goods sold) investment can be $1,000 - $2,000 for an initial order. You can probably go lower, but in our experience, this number is a good spend to a) minimize product expense (and risk if you can’t sell it) and also b) have enough product to sell during your initial launch. For a few of our products we’ve had good initial launches and then run out of product quickly, making us scramble to order more from the manufacturer.

Since Amazon is still our primary sales channel, we gauge demand, competition, and pricing here first. We want to offer a product that’s better than the competition, so we’ll research what pain points customers have with the current product set by looking at what competitors are doing and their negative customer reviews, and we’ll find ways to make it better.

For example, with our cold brew filter bags, we saw customers were complaining that it’s really hard to untie a cotton drawstring when it’s wet after you’re done making the cold brew and need to open the bag to clean it. So we customized the drawstring with our manufacturer and used a nylon material instead, which we now call the “EasyOpen” drawstring. A seemingly simple change like this can mean a competitive sales advantage and high customer satisfaction (see our 4.9-star reviews for the cold brew bag). We went through a similar product innovation process with our eye masks and vitamin C serums too.

On the design side, we work with Freelancers on Fiverr (some recurring), on the packaging, logo design, sometimes product images, etc. For $25-$50 you can get some great designs. For smaller projects, I’ve dusted off my early Photoshop skillz and dive into things myself!

At the end of the day, we’re looking to sell 10 products a day and make $10 net profit per product, so that’s $100 net profit per product per day. When you factor in costs like COGS + shipping, duties + fees, and (FBA - Fulfillment by Amazon) fulfillment + inventory fees you’ll want to retail something at around $20 per unit in order to make 50% margin and hit that $10 net profit margin number. This doesn’t factor in advertising and promotional costs which can vary widely and can cut into your profit margin even more.

how-we-started-a-40k-month-side-hustle-selling-all-natural-self-care-products Doppeltree and Doppelgänger Goods product prototypes, and competitor product research and testing

Describe the process of launching the business.

Since Doppeltree started off as a side hustle, we’ve taken our sweet old time to grow =) To date we’ve self-funded the company, first from savings, then from our earned profits.

The initial cost to launch our coffee filter bag was around $800; $640 for product + product inserts/packaging, $53.25 to design our first logo, $12.95 for a month of Canva to do our own design, and the remainder miscellaneous. For our eye mask launch 5 months later we invested about $2,000, primary because the MOQ (minimum order quantity) was higher.

We launched our website in August 2018 and recently did a redesign and moved from Wix to Shopify. For both, we pretty much designed the sites ourselves using some out-of-the-box templates that we’ve customized. Our website is still a work in progress!

how-we-started-a-40k-month-side-hustle-selling-all-natural-self-care-products The first version of our website

We also started our Instagram around the time we launched our website to attract influencers, start building more of a brand presence, and drive sales to our website.

Once we had our website, we also started testing selling directly to customers outside of Amazon, whether as part of a general cross-selling response to customers when they reached out to us, or more directly through paid ads on Google and Facebook.

Since launch, what has worked to attract and retain customers?

A few strategies and tactics that have worked well for us:

Great customer service
We’ve found that using a super positive tone really makes a difference… more exclamation marks than you’re used to!!! There are so many instances where a pissed off customer threatening (or even actually leaving us) a bad review has come back and apologized saying they had a bad week. It’s one way to convert some net detractors into net promoters.

We also take a pretty generous approach with our customers if they have any product issues. We technically have a 90-day *❤️ Us or Get Your Money Back 90-day Guarantee *, but in practice, we’ll always refund or send a replacement if they reach out. In our opinion, it’s not worth the time, effort, and cost (e.g. negative sentiment and reviews) by pushing back.

We encourage customers to buy our other products by bundling products together, offering free samples and discounts to try similar products.

how-we-started-a-40k-month-side-hustle-selling-all-natural-self-care-products

Extend your product line to better cross-sell

One of the reasons we decided this year to double-down on our Doppeltree brand is because we’ve found success in cross-selling similar self-care products to both new and existing customers. We don’t have exact numbers yet since we launched our face masks and vitamin C serums just this summer, but we’re noticing many customers purchasing 2 or more in our Gold Series product line (eye mask, face mask, and vitamin C serum).

We encourage customers to buy our other products in a few ways:

  1. We bundle products together and offer a discount versus if they’d buy each item individually.
  2. We offer free samples. If a customer purchases item A, we’ll offer to send a free sample of items B or C. Within each sample we offer a discount on their first purchase of that item.
  3. We offer a discount to try another (similar) product(s).
  4. In our automated marketing communications, we reinforce 1-3 above.

Razor Blade Strategy

Offering a product that encourages repeat purchase is nice too =) We get a lot of repeat purchases of our eye masks and foot pads.

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

Since launching in December 2017 we’ve experienced lots of changes, both in the business, and personally:

  • We’ve grown from a single product to seven today, with another 2-3 planned to launch before EOY.
  • We started on Amazon, but now also sell direct to consumers via our website at www.doppeltree.com.
  • We decided to focus on Doppeltree as our main brand around all natural self-care products. That said, we’re open to launching other sister brands, especially on Amazon, if we can drive incremental revenue and net profits.
  • We’ve expanded our sales channel and geographies; we’re in the U.S., Canada, the UK, France, Italy, Spain, we do wholesale, and we also have some passionate Ambassadors for the brand.
  • And probably the biggest change was... Fei and I decided in March that I could resign from my job and run our business full-time (yikes!). We were lucky enough that a little over a year after we started, we were making enough net income that one of us could walk away from our day job.

For our long term goal, we’re targeting to grow our top-line by 50% by Fall 2020. At that point, we’d have the option to fully commit ourselves to Doppeltree 100% of the time, instead of after we put the kids to bed, take a shower, then start back up around 10pm chatting with our overseas partners :)

how-we-started-a-40k-month-side-hustle-selling-all-natural-self-care-products

Doppeltree Amazon US sales revenue from Dec 2017 launch through August 2019

A few of the things we plan to do on our path there are:

  1. Diversify our sales so that most of our sales come in through our website and other “owned” channels. There’s just too much risk having too much sales via 1-2 non-owned channels.
  2. Launch more all natural self-care products that fit within the Doppeltree brand, as well as other non-Doppeltree products that will help drive our top/bottom lines.
  3. Find recurring wholesale sales opportunities and move more into the B2B/wholesale realm to diversify our customer base.

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

Don’t put all your eggs in one (sales) basket!

Insofar as selling on Amazon, it’s a great platform to get started to reach an enormous captive customer base, but start thinking about how you can diversify away from it as soon as you’ve hit a good rhythm with your sales. When we say diversify away, we mean generating sales from non-Amazon channels. For fulfillment and shipping Amazon is really the only small biz friendly player in town, although it sounds like Shopify will be offering a competing fulfillment service soon.

The reason we say this is because when one channel dominates ALL of your sales, if anything happens, you’re screwed!

A family member, who started selling on Amazon FBA nearly two years earlier than us (and who was the inspiration for me getting started), was shut down by Amazon right before Thanksgiving 2 years ago. Despite appealing, escalating, etc. Amazon didn’t reinstate them. They went from $1,000+ daily sales to $0 overnight. That’s really scary.

We experienced something different but also hits home the “diversify your sales channel” message. This summer, our eye mask was targeted by a malicious competitor, likely from overseas. The cliff notes version of what happened is, they uploaded pornographic images onto our listing, and despite our notifying Amazon what happened, Amazon still flagged our listing as an “adult product,” and subsequently our listing was suppressed for more than a month. The problem started with the malicious seller, but the worst part was running into the black-hole-of-red-tape that’s the Amazon Seller world, and not being able to get Amazon to uncheck the “Adult Flag” box in their back-end systems. We probably lost around $20,000 in sales during this high summer demand period.

One way to avoid what we experienced, is to trademark your brand with the USPTO (the United States Patent and Trademark Office) and register your brand with Amazon, which we’ve now done. When you do this, it’s harder for other sellers to “hijack” your listing, but it’s not foolproof. And do it early, because the entire process can take up to a year.

If you’re partnering with a significant other, take time to define responsibilities =)

When you have 2 people running a business who are very close personally - e.g. spouses and significant others! - it’s important to figure out who’s going to do what and to not let pride get in the way.

It’s been a learning experience for Fei and me to start working together in a business setting. I have to admit, going from directly managing 8 people at my previous role to being a sole contributor, and having to work closely with and sometimes taking direction from Fei, can be irritating! I realize a lot has to do with personalities involved, but it’s something to keep in mind. 😉

What platform/tools do you use for your business?

  • Shopify for our website. We moved from Wix because some of Wix’s functionalities, like providing discount code options, weren’t as robust.
    • FormBuilder for form submissions.
    • Product Reviews for website product reviews.
  • MailChimp for email.
  • Gmail Business Suite (email, calendar, spreadsheets, docs). Absolutely no need for Microsoft Office.
  • Asana for project management. Used at my previous company and I’ve brought it with me to Doppeltree (to the chagrin of Fei!).
  • Slack (free version) for communications.
  • Evernote for miscellaneous note-taking.
  • Zapier for some automated data processing (linking Shopify <> Google Contacts <> MailChimp). We use them mainly to automatically transfer customer outreach/contact info from Google Contacts to MailChimp, but unfortunately not fully functional right now because there’s a Zapier <> Google Contacts API limitation whereby Zapier cannot really determine when a contact is “new” or just being “updated”.
  • TaxJar for online sales tax by state. Tax compliance is A LOT of work depending on how seriously you take it (which you probably should!). TaxJar helps clear up a lot of the confusion, although it’s expensive, around $600 annually for us. Interestingly, Amazon is starting to do a lot of state-by-state tax collection automatically, so if you sell exclusively on Amazon, TaxJar may provide less value going forward.
  • Dymo mail label printer so that when we send our eye mask and footpad samples it looks professional.

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

There aren’t any books that come to mind for either of us, but one of the early podcasts we listened to was The Amazing Seller, which taught us a lot about selling on Amazon, especially when we were just starting out.

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

It’s possible!

What started off as a fun side hustle, has now become a key part of our long-term plan to “get out of the grind” of working for someone else, and most importantly, being in control of our own time and where we need to physically be. This is important for us because we have 2 girls - 8 and 5 years old - that we want to spend more quality time with. Fei and I have also been secret FIRE admirers (Financial Independence Retire Early) since we moved out to the Bay Area 10+ years ago, and our small biz will hopefully help us realize that dream.)

Although probably a cliche, another tip is, just get started.

Nowadays the (financial) bar to start a business is pretty darn low, especially when you’re selling digital goods or something online. Even if you’re selling physical goods, you don’t need a store or a location, you can ship your product directly from the manufacturer to the fulfillment center. So with a $1,000 - $2,000 investment and yes, some elbow grease and time, you can get started.

Once you start, you’ll learn so much more than all the books, podcasts, and email newsletters can provide you :) Experience is the best advice you can get!

Where can we go to learn more?

  • Website
  • Instagram
  • Stay up-to-date on what we’re up to and get discounts by joining our newsletter mailing list. Go to https://www.doppeltree.com and submit your email at the bottom of the page, or email us at [email protected].
  • Starter Story readers can get $5 off their first purchase at Doppeltree by using code STARTERSTORY5

If you have any questions or comments, drop a comment below!

-  
Tony & Fei Ouyang,   Founder of Doppeltree

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