How We Grew Our Weighted Blanket Product To $250K/Month

Robin

•

Published: July 9th, 2019

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Robin

Founder, Luna Wellness

$250K

revenue/mo

Founders

Employees

Luna Wellness

lunablanket.com

from New York, New York, USA

started December 2017

$250,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

Amazon

shipping

FedEx

payments

Shopify Payments

Discover what books Robin recommends to grow your business!

Shoe Dog Phil Knight

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

Hi! I’m Robin and I’m one of the co-founders of the Luna weighted blanket which uses the science of deep pressure stimulation to help sensory disorders, anxiety, stress and insomnia.

What started out as a passion project in 2017 has now turned into a thriving business where we’ve already tripled our revenue from last year and are averaging $250K in revenue per month. We expect this number to increase 2-3X in the following months.

how-we-grew-our-weighted-blanket-product-to-250k-month

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

I’m a Dallas native and came up to the east coast to attend college at Cornell. I got my start in real estate/finance straight out of college, and am currently at a hedge fund in New York City (expected to quit this month).

Being in this environment and industry resulted in anxiety in my daily life and began to affect my sleep quality to the point where I would wake up several times a night. I tried meditation, white noise machines, melatonin supplements, you name it.

When I got back from the China trip, we immediately put in a small order of about 500 blankets. We decided that we would start Luna exclusively on Amazon as that seemed to be the fastest way to enter the market.

I was about to give up until I came across several studies on weighted blankets dating back to the 90s. There was an overwhelming amount of evidence pointing to the blanket’s effectiveness in reducing the participants levels of anxiety and improving their quality of sleep.

I decided to give it a shot and for the first time in a few years I was not only able to fall asleep faster but also able to stay asleep throughout the night. Using it on the couch also made me feel more relaxed.

I was hooked.

It turns out more than a third of American adults are not getting enough sleep, 45 percent report lying awake at night and 3 out of 4 Americans report experiencing at least one stress symptoms.

I never imagined myself doing a startup but the market statistics were so compelling, I had to take a shot (we’re a sleepless, stressed out nation). And so, I set on a mission to help people like me sleep better and feel better.

Without giving Luna my full and undivided attention, especially in these early stages, I couldn’t maximize and tighten up all aspects of the business. This resulted in poor inventory planning, which meant not getting enough blankets to those in need (I would get tons of emails asking when certain sizes would be back in stock).

So while working at a hedge fund has had its perks in terms of compensation, it lacks freedom and personal fulfillment, things I feel can be achieved by working for myself. And it’s a really heartwarming feeling when I get emails from customers saying how the weighted blanket has helped them overcome a serious issue.

Having this in the back of my head has made the jump a little easier.

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

At the moment, the only available blankets were poorly stitched, had issues with breathability (would wake up in sweats), used noisy heat plastic beads and came at a steep price of $200-$300. So I sought out to create a higher quality weighted blanket at an affordable price so it would be possible for everyone to access its benefits.

Make sure you create a product that customers NEED and has SUSTAINABLE, HEALTHY margins so you can compete with your competitors. If you can’t meet these two criteria, then find another product, there’s tons out there.

I first reached out to a family friend who had connections in the textile manufacturing industry and fortunately they were able to connect us to someone who could create weighted blankets. Since this was a relatively (and still is) new industry, there was no set blueprint on how to create a weighted blanket.

So we took the existing designs on the market and broke down what they did right and what needed improvements. The biggest issues were distribution of weight (beads would bunch up in the corner of the squares), breathability, stitching and bead leakage.

We went through several variations and ended up fixing these problems by developing a proprietary filling process where the beads would be woven into the fabric so no shifting would occur, using a cool fabric that wicks moisture away to redirect heat from your body, utilizing double stitching to increase durability and sewing 5 layers within the blanket to prevent leaking.

Early prototypes

We also created our weighted blankets using Oeko-Tex certified materials. This is an even higher designation than organic, and ensures that no harmful chemicals were used at any stage of the manufacturing process so customers can sleep easier knowing their products are free from not-so-pretty additives, such as formaldehyde (which is commonly used as a finishing in wrinkle-free or wrinkle-resistant bedding).

The design process took us several months of trial and error, mostly because the shipping times from China to the US were pretty long. Before finalizing the order, we decided that it was important to visit the manufacturers in person and work in real time to come up with the perfect weighted blanket.

My experience thus far in my career has made me a firm believer in in-person meetings, which

allows us to put a face to a name
understand the intricacies of how the business operates and
show your commitment.

Emails and calls just doesn’t offer the same connection and Chinese suppliers want to build actual relationships. During our visit, they drove us for 2 hours to the factory and another 2 hours back to our hotel, gave us extensive tours of the facilities, introduced us to their CEO who decided to have an hour long chat with us on his own time and even offered to take us out to lunch. It just shows the difference we have in terms of business culture in the US vs China.

Our manufacturing partner’s facility

Describe the process of launching the business.

When I got back from the China trip, we immediately put in a small order of about 500 blankets. We didn’t want to seek out any sort of outside financing just yet, so we used what we had saved up (definitely glad I saved!) We decided that we would start Luna exclusively on Amazon as that seemed to be the fastest way to enter the market. Once we gained enough traction and sales through Amazon we would launch our own website.

What’s so amazing about Amazon is the relative ease of bringing a product to the mass market. Storage, fulfillment, returns, and payment processing are handled by Amazon (with a price of course).

With these processes already streamlined through Amazon, we spent the bulk of our time focusing on 2 major points, optimizing our listing, (solid SEO descriptions, high quality informational style photos, competitive pricing, customer reviews etc) and managing advertising campaigns on Amazon.

At that time, the landscape of the weighted blanket market on Amazon was predominantly made up of Chinese sellers with lackluster listings coupled with broken English and cookie cutter product and lifestyle images.

As an American based brand, we saw this as one of the biggest ways we would differentiate Luna.

Competitor photo taken from listing

When our product arrived from China, the weighted blanket craze was in full effect and sales skyrocketed.

We complimented this craze through emailing press outlets / bloggers who had already covered weighted blankets and this got us picked up by Healthline, Mens Journal, Man Repeller, Real Simple, POPSUGAR, Yahoo and more. NOTE: We probably emailed over 400 journalists and got a response from less than 10.

We found out that if you have something that’s breaking news (groundbreaking invention) you should take that "breaking news" angle with the Entrepreneur, Inc, Fast Co, Forbes types of publications because they'll want to know how you got funded and they'll be more interested in the story of the entrepreneur behind the product.

But when you’re pitching lifestyle publications (the ones that reach your target market), you need to really think about what’s in it for the audience and what will make their readers actually click on your story.

JOURNALIST TEMPLATE

(We tried using a subject line that would draw in the journalist while being relatable to our product. They get thousands of emails a day from people pitching their product so keep it short, relatable and interesting)

Subject: Do you have issues sleeping?

Subject: When was the last time you were super stressed out?

Hi *name*,

*interesting fact about person or article etc* (Wanted to run this by you and see if it'd be of interest since you're insert subject they’re writing about and how it connects with your product or story.)

I’m the creator of (product), and can offer you a quote for an article on the following:

Ex: ways to beat insomnia naturally
This is where you can offer additional ideas for topics

My advice would be perfect for your audience because I’m (list your expertise/background). (Quick 1-2 sentence about your story or product. KEEP IT SHORT AND INTERESTING!)

You can learn more about us here ( link to website ).

Will you be covering any (industry/product) stories anytime soon? If so, let me know. I’m also happy to send you a sample for you to try.

Appreciate your time!

Best,

(Name)

PS - With (holiday/event/topical thing) around the corner, I know a story relating to (product) would be a hit for your audience.

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

Since launching, Amazon is still our main source of revenue. The majority of our marketing spends goes into Amazon ads where we structure our campaigns into three categories (Automatic, Research and High-performing).

When launching a new product, we’ll start off with an automatic campaign to source potential keywords. We started off with a budget of $30 a day and we’ll run this campaign. After this period of time, we’ll take the best performing keywords that have a CTR greater than 6% and an ACOS (adspend / sales attributed to that ad) that’s lower than our product margin and put them into our research campaign.

These keywords will be added as a broad search term in order to generate additional long tail keywords and this process helps us narrow down the winning keywords. These are then put into the “High-performing” campaign that contains our best performing keywords.

Since launching Luna, we have received an overwhelming amount of warm and heartfelt emails from buyers letting us know how much they love our product and how it has changed their and their loved ones sleep quality. Buyers that suffered tragedies, suffer from an array of anxiety and depression issues have reached out to us letting us know how the Luna blanket has helped them. These emails are single handedly the most rewarding part of Luna.

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

We started out with small orders of about $10,000 leaving us with 25% margin, but over the course of these 2 years, we have developed a strong relationship with our manufacturer and upped our order quantity by 10x. Today, we’re seeing close to 40% margins.

Believe it or not, we’re still trying to catch up with the demand on Amazon, and are consistently placing much larger orders compared to our previous ones. To accommodate these orders, we’ve turned to financing companies like Kickpay and Clearbanc due to a 2 week lag in the payout schedule on Amazon (and for new sellers they hold a 2 week rolling reserve) which can really hurt a business’s cash flow. That being said, we have plans to launch more blanket sizes as well as additional sleep related products (pillows, regular comforters, mattresses) to expand our product into a brand not just solely focused on Amazon.

We only run Amazon sponsored product and brand ads and that currently is about 10% of our monthly revenue. We find product / category targeting as well as retargeting ads to be very expensive. If you have access to AMS (Amazon Marketing Services) I would suggest testing out product display ads as that’s been one of our ads with the lowest ACoS (Advertising cost of sales: Cost spent on ads / sales generated from ads).

Our current breakdown of sales is about 90% from Amazon and 10% from our website, and plan on driving more traffic to our website via Google, FB, IG ads, influencers and partnerships with complementary brands. We’re in talks with a subscription box that is doing a dedicated box for sleep and we’re really excited to see that go live!

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

With Luna, the biggest takeaway that we had was the importance of inventory planning and management. It is absolutely a delicate line between ordering too much or too little, and when manufacturing in and shipping from China, there are a lot of issues that you need to take into account when planning lead times. Through trial and error (like missing out on the holiday season...ouch!) we learned to balance our orders and plan out logistically the best process for us. There’s a period of time (usually Q4) when freight costs and amazon storage fees will increase substantially so it’s smart to factor that into your inventory planning. Print out a schedule of Chinese holidays in order to anticipate any delays to your manufacturing schedule as there’s a lot you may not be aware of (Dragon Boat Festival, Tomb Sweeping Festival).

Be wary of Chinese manufacturers and keep constant communication. A lot of the time, their best customers are domestic and they’re placing larger quantity orders. This is the reality and the factories revolve around their Chinese customers. When that happens, they may try to improve things or domestic customers might want to change something on their mold or circuits and they’ll go ahead and do that without consulting you first. This can really screws things up when we develop our packaging or product copy. For example, one time our manufacturer changed the size of our packaging without telling us and this place us in an “Oversize” category on Amazon which meant higher fees. So always be on your toes.

You get what you pay for. These factories have to turn a profit so don’t squeeze them till the last drop because they will start cutting corners. We visited 10 other manufacturers before settling on ours and were extremely tempted in selecting them solely based on price and because their samples looked great (in retrospect, all the premade samples looked great because they could create them to the highest standard). We realized just looking at samples wouldn’t reflect the true quality of the product so we asked for some of the brands they manufactured and did test orders. As expected, the test orders that we received ended up being really low quality and we learned our lesson.

Test order from low cost manufacturer

Tell the factory you are sending an inspector during production. Even if you aren’t, they’ll be producing to the standard where they’re expecting an inspector to come and check out the products. It’s also EXTREMELY important to count the quantity that’s actually shipping out. If your commercial invoice & packing list list 500 cartons, you better make sure that you’re sending 500 cartons to the US. Not 499, not 501, 500.

Any shortage or overage will require you to file something called a Manifest Discrepancy Report to re-declare your goods so they can be released. This report takes 7-10 business days (but one time took up to 30 days for us) and failure to do so can result in penalties or seizure of your goods. Our first supplier sent about 6/8 shipments where there was a count discrepancy causing significant delays and lost sales (we called it quits after the 8th shipment). COUNT YOUR GOODS!

What platform/tools do you use for your business?

Since currently there are only 2 of us at Luna, we look toward outside platforms to plan inventory, process payments, and fulfill our goods. Inventory Planner has been a great tool in ensuring we don’t miss out on the holiday season rush!

Shopify, Flexport, Kickpay, and Quickbooks are all easy to use and relatively inexpensive tools to consider if you are a small business.

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

Shoe Dog by Phil Knight. If you’re still on the fence about starting your own business, pick this book up and it will rock your world.

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

Make sure you create a product that customers NEED and has SUSTAINABLE, HEALTHY margins so you can compete with your competitors. If you can’t meet these two criteria, then find another product, there’s tons out there.

Are you looking to hire for certain positions right now?

While Luna is still a young company, it is growing at an exponential rate and we definitely see bringing on strategic hires in the next couple years specifically in the design & digital marketing fields.