This article will discuss how to start a company, specifically in consumer products with first-hand information from the founder of Tom & Sheri’s Products.
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Recently we spoke to Austin Eudaly, founder of Tom & Sheri’s Products, Inc. which produces a premium wrinkle releaser spray for clothing for consumers. Founded in Dallas where the company also does the bottling, Tom & Sheri’s is off to a strong start. Austin shared with us his experience and insight on how to start a company. Excerpts from our conversation are below.
When Tackling How to Start a Company, Where Did You Begin?
When Austin was heading off to college, his mom introduced him to a homemade wrinkle releaser spray. “Years ago, my mom, Sheri, gave up on ironing and created a homemade wrinkle releaser spray. It was a game changer. No more irons, no more hassle and no more wrinkles.”
After using the product himself, he abandoned ironing completely. However, it took a trip to Croatia with some friends to realize the product might be a business. “I saw a need for this product when friends kept stealing mine. So I set out to perfect the formula.” He began on his journey to learn how to start a company.
During 2017, Austin spent 7 months talking to chemists and researching different bottle shapes and sizes. He tested 30+ different spray bottle handles in order to come up with a complete product. According to Austin, the goal was to “make a modern wrinkle releaser that was efficient, effective, and natural. After several trial-runs, Tom & Sheri’s “Iron in a Bottle” became a reality. He explains he, “named the company Tom & Sheri’s Products after my parents who’ve always been my inspiration and support.”
By April 2018, he had the formula perfected. He officially launched the product June 1, ordering 3,000 bottles worth of formula and packaging from suppliers. Sales and positive feedback from customers have been compelling. Enough so, he just ordered 40,000 more bottles last week.
What Have You Learned about Selling Online?
Austin does not have a CPG or e-commerce background. While prominent Dallas retailers Stanley Korshak and Culwell & Son agreed to sell the product in stores, e-commerce has been the primary driver of Tom & Sheri’s first 3,000 sales.
The greatest driver of those sales has been influencers. “I’ve learned that influencers have power and they are very real.” Austin realized how strong the influencer category was when a mom blogger named Shay Shull (Mix & Match Mama) posted about the wrinkle releaser — Tom & Sheri’s promptly sold 900 bottles that day. According to Austin, “out of the company’s $50,000 in sales to date (generated over 2 months), 90% of that is from 2 key influencers that have blogged about the product.”
It’s forced Austin to take the influencer market seriously and delve into paid influencers. One issue is that paid influencers want to get paid up front. Founders like Austin risk no real alignment, an incentive for ongoing sales, or responsibility for total units sold. Austin told us he’s “looking for longer-term arrangements with influencers and more aligned compensation structures that give influencers a percentage of sales.” Tom & Sheri’s also just started doing Facebook advertising which is yielding 2.5x marketing spend. It’s still early, but effective. The online store conversion rate is a whopping 10% (industry average is sub 2%) and over 2/3rds of online shoppers buy multiple bottles.
Who Is Your Target Market?
Austin initially developing the product with a focus on men like him with PGA golfer, Bronson Burgoon as an early brand ambassador. However, his new exposure to the mom-blogger world changed his target market. For instance, they just ordered baby outfits that say ‘ironing makes me cry’ which their team plans to send to mothers.
While the product is intentionally gender neutral, he’s shifted his target market. According to Austin, “the average mother in her lifetime will iron enough clothes to go up and down the Empire State Building”
Ideally, Tom & Sheri’s will partner with 30 to 50 influencers. They’ll simultaneously cultivate relationships with hotels, cruise lines, and other creative marketing partnerships. According to Austin, “our goal is to continue selling online through influencers like Mix and Match Mama. We also want to be an additional fine retailer similar to those we are already in like Stanley Korshak and Culwell & Son.” Longer term, mass retail is a focus. Austin shares, “We plan to be in Central Market and Whole Foods. Hotel-wise, we are in talks with Four Seasons and other high-end hotels to provide customers with a wrinkle solution other than traditional ironing:”
What Channels Is Tom & Sheri’s Selling Through?
The plan right now is to attack both the e-commerce channel and classic CPG channels in store. Several boutiques have reached out asking if Tom & Sheri’s sells wholesale, so for now, the company is young enough to explore both avenues and gravitate towards what the customer is asking for.
According to Austin, “influencer pops are great. But our long-term strategy is to sell through more consistent e-commerce channels and in stores. Right now the product is carried by Stanley Korshak, Culwell & Son, All Good Things Paper (boutique in Dallas), Tin Lizzie’s (boutique in Oklahoma City), and a few others.”
What Have Been the Biggest Challenges You’ve Experience When Learning How to Start a Company?
“Finding a chemist that would take the time to work with me was challenging. Just getting someone to return my call proved to be difficult! The first thing they think is ‘who is this random guy from Dallas talking to me about wrinkled clothes?’” Once Austin did get on the phone with chemists, he then had to make sure that person wasn’t locked into non-compete agreements or confidentiality agreements with larger CPG brands.
When Shay Shull blogged about the business on her blog Mix and Match Mama, the company was unprepared for the 900 orders that immediately came in.
“My head of operations Heather Wilson and I were up until 1 AM every night filling bottles and packaging to go out the next few days. I thought we would sell 10 to 30 bottles total. Right now we’re at about 1,500 from that channel alone,” according to Austin.
What Have Been Some Surprising Learnings of Your Particular Business?
Packaging a spray bottle isn’t as straightforward as just putting a bottle in a box. According to Austin, “some of the bottles actually exploded in the mail. It was a combination of intense heat and abuse by the post office. We had to figure out how to solve that packaging problem while taking care of those upset customers.”
What Keeps You Up at Night?
The company has received some great feedback. They’ve sold 3,000 bottles, but getting to the next level will require Austin to take some risk in the form of tying up capital with large orders. “We want to work with other influencers and are in discussions to be on QVC, so I’ve got to have the product on hand to satisfy the demand.” It takes 9 weeks from when the Tom & Sheri’s orders product to receive that product and customers won’t wait that long, so just-in-time ordering won’t work. Austin is taking the plunge: “We just ordered 40k more bottles last week.”
Thanks to Tom & Sheri’s for sharing with us how to start a company. They’re off to a strong start, and we’ll continue to chronicle their progress in future posts.
