How to Become A Bestseller on Amazon and Costco With Elavi’s Michelle Razavi

0:00Hey, business besties. Welcome back to the Female Founder World Podcast. I'm Jasmine. I'm the host of the show and the creator of the Female Founder World universe. Today, we've got the founder of Elevie, Michelle Razavi. Thank you so much for having me. Of course. You are now entering Female Founder World with your host, Jasmine Garnsworthy. Okay, for people that don't know Elevie, what are you guys doing? Yeah, we're on a mission to help people indulge without compromise with our low sugar, high protein snacks. Yum. I just ate your brownie for breakfast. I had one earlier today too. It is a lifesaver.

0:34Okay. Before you started the business, you're working at Sephora. What made you start this company? We're going back to early 2020 now. Yeah. Yeah. So I was working full-time at Sephora on the innovation team. And that's where I really fell in love with consumer product goods, with clean beauty, with clean ingredients. And at the same time, I was working a full-time corporate, while I was working a full-time corporate job, I was also teaching fitness classes at Equinox. And that's where I met my co-founder, Nikki, who was also teaching at Equinox and working a full-time corporate job herself at PwC.

1:07And at that time, I was personally struggling working 16-hour days to nourish my body between working a full-time job and then teaching in the evenings or early mornings, weekends. It was just so go, go, go. And you learn at a certain point your life around your mid-20s that you can't outwork out a poor diet. And I was having so many health issues and really struggled to find products that helped me cut sugar, get more protein in all while satisfying my sweet tooth and not upsetting my stomach. And I noticed there was a white space in the food system and shared the similar struggle with my co-founder Nikki.

1:45And so we wanted to bring fun and nostalgia back into the food system with the integrity and the transparency that we saw was lacking in the food system. And so we personally invested our own capital that we set aside for grad school into starting L of E. And I like to say we're the first angel investors into our company. And a couple of years later, we are now sold nationwide in Lifetime Fitness cafes. We are a Costco darling. We are number one on Amazon and are just really excited to help bring healthier food products into more hands. We're going to talk about Amazon a lot in this episode because it's one of those things that I think is really interesting.

2:26So much potential, really exciting for brands that can figure it out. And also just like there's a lot of spammy shit on the internet about how to win on Amazon. And so I want to speak to a founder who's actually doing it and is going to cut through all of that and tell us what's working. But I want to get a little bit more about your story first, because you launched with a product, this like collagen bar that you then discontinued, which I think is interesting because like your mission hasn't changed, but the product has changed. Can you like explain to us about why that, how that evolution happened and what your kind of main product is now?

3:01Yeah. So we launched with collagen protein bars literally three months before the pandemic, Jasmine. So we had no idea how this product was going to evolve in this new world and it did great, right? But it wasn't great enough to where we wanted it to be. And we introduced this new product line that were these low sugar dessert spreads, kind of like a healthy Nutella, and they were just taking off. And so I was having this conversation with one of my advisors, who's also one of the founders of RxBar. And he said, look, your protein bars, they're good. They're okay. But they're not going to get you to where you want to be.

3:35And these cashew butters, the fact that you got Costco's attention and that they're doing so well on Amazon, and they're outpacing your first product line, it is your job as a founder to manage resource allocation. That is your job. And no investor, retailer, anybody will get mad at you for doing a smart pivot. And that was the permission I needed because I carried so much shame around discontinuing a product line or trying to keep something or forcing something that was just so difficult to keep alive. And that was the permission I needed to discontinue a product line that was like our first born child.

4:11It was hard. We upset a lot of people. A lot of people were confused. But once. As in your customers. Our customers. I think some of our investors didn't understand it. So we had to really storytell around why this is an exciting pivot. It wasn't like we were closing down our business, but it was really removing what a lot of people bought into first with with L of E because that was first. And when we explain that, This is to reallocate our resources to a stronger product line and behind the scenes formulate the protein brownies. That just made so much more sense. And this ties back to Amazon, actually, in terms of really putting the nail on the coffin for the protein bars.

4:52The protein bars, especially our top two flavors, had high quality, multiple chocolate chips. And one thing we did not know about Amazon, and this is for anybody who has a food product and is thinking about Amazon, If you have something meltable, Amazon will not let you sell it in their warehouses to be eligible for FBA prime shipping between the months of May and September. So that is nearly half of your business that is gone overnight on Amazon. And we did such a great job building up our business Q1, Q2, and the protein bars just completely tanked during Amazon because we couldn't sell them on Amazon.

5:27And we couldn't sell them on D2C because they're melting. And so it was that summer that we made the decision to cut the protein bars. And moving forward, all of our product lines were going to be non-meltable because we knew Amazon was such a strong player for us. It's great for acquisition, for brand discovery, for trial, for just revenue in general because it's such a mega channel. and that was the biggest formative decision that we made and it's continuing to impact our innovation pipeline for new products is it will never be meltable that is our role and so yeah that's that's how it came to be such an important learning to figure that out and like you know these things you can't you can't just kind of know this when you go into it right like you couldn't have known that when you started the business someone may have told you and you would have been like yeah but amazon won't be our main channel like whatever who cares yeah but now as you're building the business, you figure out like, actually, this is a huge driver for us.

6:25This is really important. And I love the way that you said that about being a founder, like your job is resource allocation and like your job is to, you know, grow the business. And how are you going to do that? You've, you've figured out something through trial and error and you need to double down on it. I think that's really smart and like such a, um, important thing for people to hear as well as they figuring out in their own businesses changes that they need to make and sometimes it's just like square peg round hole you just need to shift it and like it can feel like I'm I know that you are also like a manifestation like tbm girly and it can feel I think like you can feel it in your body when you're trying to push something that's not working and then once you make the decision you might be nervous about the conversations that you have to have but the openness and the relief once those hard decisions are made and it's like okay I can actually speak really authentically to this and I just it's really just about like crafting the message and if we lose people whatever that's fine like but I feel good about it in my body it's such a like practicing that intuition I think can like help so much when you can recognize those opportunities and that's when we knew it was the right decision it was this weight lifted off our shoulders we're like oh we can like breathe we can focus we have clarity we know exactly we just have to focus on one product line now because it felt like we were running two companies.

7:48And yes, we're two people and we're, you know, such a powerhouse team. But at a certain point, you know, the rubber meets the road. And there is this very formative analogy a mentor shared with me. He's like, do you want to be running up a hill with a backpack on or do you want to be sprinting downhill without anything on you? And and that was really a great visual for me of like, I want to be sprinting down a hill with ease. Yeah. And that is how we're trying to optimize our business. Yeah. Yeah, totally. Cause you could have spent years trying to figure out how to move those, those protein bars, but instead doubling down on what's working, which are these, you know, dessert, nut butter products working as well.

8:29Okay. This is besties. Let's switch gears for a second. Real quick. I want to talk to you about this season presenting sponsor, Vistaprint. They are sponsoring this entire season of the Female Founder World podcast and we love a supportive sponsor. So much so that we're actually working with Vistaprint ourselves to create the merch and all of those beautiful event perks that you know and love from our in real life Female Founder World events. If you haven't heard of Vistaprint, here's what you need to know. Vistaprint helps all kinds of business owners print all kinds of marketing products like super professional business cards, fun merch, eye-catching flyers and brochures, and a whole bunch more.

9:12And it's all completely custom. So you can do whatever you want. Whatever you're imagining right now, Vistaprint can print it. And if you're wondering if you're ready to be a designer girly, their easy-to-use website makes it super simple. Plus, they have designers on hand to help you if you really need it. Right now, Vistaprint is giving all female Founderworld podcast listeners a little something 25 % off your first order at vistaprint.com. Use the code FFW25 at checkout and step up your branding game. We put a link in the show notes if you want to learn more. So it sounds like you have amazing advisors.

9:52How did you find them? A lot of them in different ways. A lot of them through LinkedIn, through Instagram. You reach out to them? Yeah. I cold pitch a lot. I used to work in sales. Prior to Sephora, I worked at Eventbrite and I worked on the sales team. And I think that was such a formative experience my first career out of college where you literally pitched to the point where you expected failure and rejection. and so I'm very unapologetic about putting myself out there and asking our mantra at our company is just ask worst case scenario they say no yeah and so we found Jared the founder of RxBAR through a friend's sister's friends who was like an early employee at RxBAR and I just put it out into the universe I'm like that is my dream investor and advisor can you make it happen and it was a year and a half in the making.

10:44And he first came on as an advisor and I pitched him to be our investor. He said, not right now. We stayed patient. And then a year of working with him. And I was like, you know, we've had a great, you know, working relationship with you. We'd love for you to formally invest. And he did. And that was at a time when he wasn't investing anyone. So it was a lot of follow-ups and persistence and patience. Yeah. Congratulations. How much have you raised so far? Is that something that you can share? Yeah, we've raised a little over a million. We're raising as well right now. But, you know, relative to, you know, the company's growth, we have done lifetime$2 million.

11:18So we're operating very lean and efficiently. And that's always been in our DNA because we bootstrapped from day one with our own money. So even any outside capital we receive, we view it as ours. And so, yeah, it's kind of a necessity being a female founder is we all know this. We're getting less than two percent of funding and it's kind of been a blessing in disguise because it forces you to be so creative, so efficient, so on top of your money that now in this interesting time to be fundraising, the conversations are actually a lot stronger because we've been so disciplined. That's really interesting.

11:56When you first started that initial money that you put in, can you share how much that was and what it went to, or at least like the allocation of like the percentage of what that money was spent on and where it got you? Yeah, it was very incremental. So it would be like 5k here, 5k there. It wasn't just like all at once. And it was just my co-founder and I's personal savings. So it just kind of like go back and forth between like, all right, do you have 5k to cover this invoice? Or like, we kept things super lean in terms of like Shopify, Canva, using like all the like tools, doing everything ourselves.

12:26We would deliver packages wherever we could, if we could just drive and drop it off to save money on postage. We were so budget. Anywhere we could, we would ask for discounts. Most of our capital went to just inventory and packaging because we're a food business. So yeah, so that's really like how we did. I think collectively, we put in about$60 ,000,$70 ,000 between the two of us. And that was over like a year? How far did that get you? That was over a year and a half. Yeah. Yeah. We were tight. Well done. Good for you. What does the team look like now? So is the two of you, is there anyone else on the team?

13:01Yeah. My co-founder and I are the only full-time employees and we have amazing contractors that are supporting us in growth marketing, in design and social media and partnerships. How do you manage, this is something that I'm figuring out. Like we, you know, it's very similar at Female Founder World. Like there's a couple of permanent folks and then this amazing universe of freelancers and contractors and people on Fiverr and that we just like tap as we need them. How do you manage people who are not full-time employees? Yeah, I do weekly meets that are about half hour with all my contractors and that's flexible.

13:40If it's like a crazy chaotic week, we'll double up or voice note in between. I'm a huge fan of using Slack voice notes to kind of... Love a voice note. Yeah, just to sometimes like this didn't need to be a meeting. This could have just turned on very quickly. So I'm very much like don't have an unnecessary meeting unless you need one. So sometimes I'll cancel meetings if it's like a light week or everything's already been taken care of. And yeah, we just communicate via Slack, email, have that weekly touch point when necessary, and just make sure that we're just really communicating, especially in different time zones that we're all working in of, hey, this deliverable is here.

14:14Here's our post recap, sending calendar invites sometimes just to remind each other and hold everybody accountable for launches. And yeah, just being super transparent and talking about one thing. Anytime I bring someone on, I ask them like, when are you most optimal in terms of your work time? Do you like to work in the mornings or in the evenings? And trying to build a culture with them based on what's optimal for their brain and vice versa, sharing, hey, this is my communication style. This is how my brain likes to work. I like to unplug at nights or whatever. I'm active at nights just so that everyone's on the same page.

14:46Something that I do is just really try and set like manage the expectation that I'm going to be emailing and slacking all the time. You don't have to respond. Yes. But I need to be able to send it at all times. So it's up to you to like manage those notifications and like make sure you're not seeing it when you're not working and when you're not on. Otherwise, I think it can lead to like a really unhealthy dynamic within the team where you're this like, um, annoying high pressure founder who is constantly at people. And I'm like, I'm not expecting you to respond. You need to manage that time and those notifications.

15:20So key. Did you know on Slack, you can schedule messages to go out later? Yes. But then I get concerned that I'm going to, things aren't going to go chronologically and that it's not going to be in the right order. But sometimes I do do it if it's like, you know, a Saturday night and I'm kind of like, I actually don't want anyone to know I don't want Slack right now. I hear you. I've done that a couple of times and I'll like pin things too, just so that like we all can like reference it faster. But yeah, that's, you don't want to out yourself. Yeah. I'm sitting at home on Slack. Cool. Jasmine.

15:50Um, I want to talk about Costco because this is, uh, you know, that's massive. That's huge. How did Costco happen? And that was really what helped you kind of validate that you needed to switch your products from the collagen bars to this nut butter. When did they approach you? How did you approach them? What was the process? Yeah. I cold pitched Costco, which is wild. And I just sent them an email saying, Hey, here's our products. I noticed that there's a gap in your set. I always try to lead with value in a pitch instead of like, let me tell you about me. It's more like, here's what I can provide for you.

16:23I know. I think, can we just like pause on that? Yeah. Because that is so important. We, we have this program called retail bootcamp where we have brands in the community come through, learn how to, um, how to build out, uh, their wholesale strategy, particularly with independent stockers. And part of that is like, you know, working on your pitch materials. And I often will like jump in and review people's, um, materials and I'm like, you are leading with you too much. What do they need? What do they need? Solve a problem for them. And I think that people say it, but like, I don't think it's necessarily getting through like re completely reframe in your mind, what this, what this conversation is.

17:06It's all about what do they need and how are you the answer to that? And like be super, super explicit about it. Yeah. Give yourself one sentence tops to explain who you are. That's it. The rest of the email or the pitch is all about, here's what I can drive for you. Here's what I've done elsewhere to give yourself validation and credibility and make the call to action very clear of like, let's set up a call or can I send you samples? Make the ask very clear at the end versus just like, here you go. Let me word vomit on you. I don't know what you're going to do with this. So I always say like the three C's of concise, compelling and call to action are the three key things for a pitch.

17:42But yeah, so pitched, had no expectations. I'm like, I'm literally just like, you know, throwing it out there. And miraculously, because I do tracking on my emails, it was forwarded like 50 times. Oh, wow. So I think he forwarded it out to all these different buyers. And my regional local buyer in Los Angeles, where we're based, reached out and I thought it was a scam. And I had a missed phone call. And I remember calling my co-founder. I'm like, I think Costco just called me and left a voicemail. And they did. And they're like, hey, your email came across our desk. This sounds really cool. Can we try samples?

18:21Wow. And then from there, I knew we had one shot and we didn't want to blow it. So they didn't ask us to do this, but I went out of my way to go to Costco, take photos of our potential set, create a full blown deck. And once we sent samples and they said they liked it, they want to jump on a call. They didn't ask us to prepare anything. I came prepared with a full deck saying, here's your set. Here's our product. Here's how we were doing on Amazon. You make it easy, easy. So easy. yeah so easy i'm like where i did my research i know what you need here's our potential price here's the target consumer that is a costco member i learned the terminology costco doesn't call their location stores they call them warehouses so i talked to anybody i could listen to every single podcast i could on costco to really learn the language of costco because it's a completely different ecosystem and universe really it's the model's different in terms of how they even take margin.

19:15And so educating myself on Costco, I wanted to be so prepared. And like you just said, make it so easy to have them say yes. And they said, yes, they're like, okay, you're a little too nascent right now for us to fully bring you in. However, there's this thing called a road show. And it's kind of like a farmer's market meets a pop-up where you have to be a vendor, a certified vendor with Costco, go through all their paperwork as if you're going to be selling in there and you set up shop for a weekend, two weekends, five weekends, depending on what you negotiate with them. And you sample and sell your products in a Costco and multiple Costco locations that you decide with them.

19:51And we did a roadshow and that was our test. They're like, if you can do well, then we'll bring you in. And here's the key thing that a lot of founders make mistake on. Set those KPIs early with your buyer. Some of them are like, okay, oh my God, we get to do a roadshow. This is so cool. Then we're going to get a PO. It's like, no. What is the KPI? What is the sales target or whatever they need to see for you to get that PO? So I asked my buyer, I'm like, hey, what does success look like for you? What weekly sales do you need to see? I'm going to be very transparent with you. I want the PO. A roadshow is cool and fun and exciting, but I want a PO after this roadshow.

20:30What does that look like? And so we had that conversation so early so that we knew what our metrics were that we needed to hit so that when we hit them, and we did, we had that conversation of like, hey, I know you said you wanted to see this. We crushed it. We surpassed it. When can we get a PO? And that conversation was so seamless. And we got a PO in record time. And now we're about to launch our second launch in double the stores. Amazing. Congratulations. First of all, follow up questions. What is the tool that you use to track your emails to make sure they're getting opened? Yeah. So I use Boomerang, which is a Google Chrome extension.

21:12I highly recommend it. It's kind of like a CRM meets a mail tracker. And essentially when you write an email on the bottom, before you click send, there's this separate line that Boomerang embeds in. And you can schedule this email to Boomerang back into your inbox if you didn't get a reply within four days, two weeks, you can customize down to the time that a boomerang's back. And you can also schedule send. So you can schedule to send at like Tuesday, 10 a.m. when you know it's most optimal open time. And it'll track not only opens, but clicks. If you had any links embedded in, maybe it's a deck link or other document, you can track all of that.

21:52And so I highly recommend boomerang. Everyone on my team uses it. I wish I get paid to promote it. I don't. Let's get a commission link. Exactly. But it's been such a game changer because I used to schedule calendar invites to follow up with certain people. And when you just grow at such a fast pace, that isn't sustainable. And so I highly recommend that. Very cool. And you mentioned that the pricing model at Costco is different. How is it different? Yeah. So traditional retailers, they make 40, 50, sometimes 60 % margin, right? And they take that cut out of a product that they buy. Costco is unique in that they ask for like 10, 15 % margin.

22:33They make their money off the memberships. So their goal is just to provide such a great shopping experience, the best value of the best products to retain essentially members and attract new ones. And so when you're thinking about the pricing, it's just a totally different configuration that we've ever engineered with any other retailer and candidly yes we we do have to go down on our margin but the volume makes up for it yeah and the the presence and the and the brand positioning and just the legitimacy that costco brings it was well worth it and on a deeper level as a brand and our mission to bring accessibility we were okay with going down on our margin for costco because it meant that our products were more accessible to the masses and that's what this is all about so um the reason why you go down your margin.

23:21So even though Costco is taking less of a cut than some of the other retailers might be, for example, like a Target or someone like that or a Walmart, you are reducing your retail price. And we pass that savings on to the customer. Yeah. Okay. That's really good to clarify. The next thing I want to talk about is Amazon because in July this year, you were the number one bestseller on Amazon during prime week, which is insane. I know. Wow. Like for a brand that is that new and you think about who you're competing with during that week. That's amazing. How did that happen? Do you have someone managing Amazon for you?

24:01Are you guys doing it? What's the process? Yeah. So a couple of ways to answer that question. So that happened after really tinkering and pulling all these different levers that culminate into this. It wasn't like an overnight success. We've been on Amazon for years. We've cycled through different agencies. We've gone through out-of-stock issues, which have really dinged us because we've been growing. And I think to hit to this moment where we're outpacing much larger, well-established brands, it was a couple key things. One, coming out of Costco, we got so much data and insight about our customers and what they're looking for, areas of improvement, that we did a full rebrand coming out of our roadshow last year.

24:38And so with all this data, we took it to an agency and they helped us redesign, revamp, and re-architect our packaging to really sell our products for us. So that was one key thing that really shifted the needle for us was having this inviting, nostalgic, fun packaging for this very unique product. So the product that we're talking about is a blue vanilla frosting cashew butter. It's naturally blue from blue spirulina. It's unlike anything you'll see on Amazon or in store. And that in and of itself, innovative product that is delicious, that consumers want to tell their friends about, that can attract people, that intrigues you.

25:17You have to try it. So that's the second thing. And then third is really just setting up the right funnel, the right listing, and making sure your views and SEO are all dialed in. So kind of going into that, you want to have about 50, ideally 100 reviews. So hitting that 100 review mark really moved the needle. And that also boosts you in the algorithm in Amazon. Then from there, high res photography, we invested in a fantastic photographer. Shout out to Nick Anderson, who helped us really capture the beauty. Based in LA? No, he's based in the Midwest. Okay. But he's fantastic. He does food photography.

25:57I found him on TikTok. And then I just DMed him on Instagram and he was like, Oh, I like what you guys are doing. So investing in photography, investing in a rebrand, um, making sure you get to, you know, 50 to a hundred reviews, which you can do in a myriad of ways and, um, really optimizing our listing. And I did that by looking at competitors in our, in our category, you know, taking some ideas from them, um, investing in video, and then finally building a really strong funnel through meta ads. Um, Because 70 % of our traffic comes from organic, which means that people are discovering us either through organic content or through paid ads, going to Amazon to research us and then buying.