Avocado Green: The Organic Mattress Brand That Built Its Own Supply Chain

12:04Vy Nguyen:Everything we sold online was all that we could produce. But as we've grown that supply chain, as we've grown our manufacturing capabilities, now we're extending our distribution channel so that consumers can find us in a lot of places now.

12:17The Shopify Masters Host:When you've been able to retain so much control over the brand and the brand story and where it's meeting people, right? You're DTCs for so many years. You've also opened some brick and mortar of your own, which we'll talk about. Then you move into wholesale and like three third-party retailers. and you can't control it quite as closely. How do you assess a partnership to make sure that it's actually going to strengthen the brand and not dilute it?

12:46Vy Nguyen:Yeah, that's a good question. I mean, one of the things we did well is I think we held out long enough to where the brand became an important draw for retailers to where when we could sit down with them, we could present a program that would fit us and them. What they understand with us is we'll drive you a new customer. We'll bring a new customer that cares about these things that maybe wasn't coming into your retail location before. And in return for that, you know, we're asking that, you know, the product, the pricing, the presentation fits what we needed to do so that we could continue to elevate the brand and keep it on message.

13:26Vy Nguyen:And I think because we waited enough till the brand matured enough, it's been able, it's allowed us to do that. where if you go too early and the retailer has a lot more sort of sway in the conversation and they could dictate the terms a little bit more, you do see that happen a lot where the retailer bring it in, dilute the brand, not present it right. And then over time, you're losing a lot of brand value by doing that.

13:50The Shopify Masters Host:You said you only started doing the wholesaling part of this two years ago.

13:54Vy Nguyen:Yeah, two years ago.

13:56The Shopify Masters Host:What has it taught you about your business that you didn't know prior?

14:00Vy Nguyen:There's a lot of consumers out there that still want to try beds, which is a good thing. So we feel like there's a lot of space. We've noticed that when we open a large regional dealer, it doesn't affect our D2C business. If anything, sometimes it grows the awareness of the brand. So the idea that if we sell a local dealer, somehow it would affect how much we could sell online or even our own stores. We haven't seen that. So that's been very interesting. If anything, there's a sort of snowball effect where having more distribution, having more people talk about the brand has helped overall bring more brand awareness.

14:38Vy Nguyen:When we go to these markets, and I was just in Florida with one of our retailers there, one of our wholesale partners, they talk about that we are bringing in such a different customer. We're bringing a customer who's done a lot of research, who knows what they want. They just want to try the bad, and they love it. I mean, I don't think it's a customer they would have necessarily had coming in before. It's a customer, obviously, who's driven and drawn to our commitment to sustainability. But I think they also do a lot of research. And one of the things we do really well is we don't obfuscate anything we do with regards to the bed.

15:12Vy Nguyen:We really put it out there, how we make it, where we get the components from, what everything is in the bed. And what you see with a lot of other sort of traditional mattress people is they sort of tell you it's a secret formula in there. I can't tell you what it's made out of. I can't tell you how it's constructed. it. And we've taken a different approach. You know, we think being radically transparent is much better for the brand and for consumer trust. And we've seen that really where consumers come in to the retailer saying, hey, I know what I want. You don't have to sell me. I just want to try it and make sure it fits right.

15:44The Shopify Masters Host:Has it also unlocked a different kind of customer set for you?

15:48Vy Nguyen:Well, it's given us, I think, coverage in a lot of places that I think we wouldn't naturally have thought we would go. Like where? The mid, the south, you know, like, like it would have been, I wouldn't have thought like, you know, like I was just through Florida, like up and down Florida, our products are selling great. And these wouldn't have been natural markets where we'd be like, hey, let's open, let's open our own retail stores.

16:11The Shopify Masters Host:Did you see when sleep became sort of mainstream part of the health and wellness conversation, it have a direct impact on your business?

16:20Vy Nguyen:I think it's been such a slow boil. So I don't know if we've seen, saw it like switch one day or another, but we've seen where consumers are, are, you know, with the O-ring and the whoop or like, so yeah, people are finally understanding, Hey, I want a good night's sleep. I need a better night's sleep for recovery. And so one of the things we did recently, we rolled out two firmer mattresses because I think a lot of consumers, especially athletes are starting to understand having the right firmness, especially if you're active, is really a big part of recovery. And so those like our extra firm, which is pretty firm.

16:56Vy Nguyen:I mean, it's not that much for that. But it's selling really well. And so surprisingly, it's one of the, you know, one of our best new product launches we've had in a little while.

17:07The Shopify Masters Host:You're talking about the importance of transparency and that a lot of your customers. They do deep research, right? They want this education. And at the same time, when you're in the world of doing things that are more naturally oriented, sustainable, whatever, it's like you kind of have that challenge of having it not come off as spinach, you know? What has been your core storytelling approach at Avocado that has allowed you to really resonate with customers in that way.

17:42Vy Nguyen:I mean, one of the things we talk about even more recently is to go beyond, you know, this sort of niche approach where we talk about making sure we explain the why. We didn't want to get pigeonholed into something where, hey, this is like a super green product that's sort of granola. And somehow by going natural, you're compromising quality. And we've really had to educate consumers on that. And it's almost the opposite, at least in our industry. is quite opposite, that having these high-quality components leads to a much better quality product, much higher durability, much less heat retention in your mattress.

18:22Vy Nguyen:And so I think if consumers understand that, that's the win, and that's the why behind the components and the materials we use. Instead of focusing on the, hey, it's natural, we try to educate on the why.

18:36The Shopify Masters Host:Right, right, right, because there is a psychological association, there has been at least historically where you say like, okay, well, if I'm going to do this thing that's like healthier for me. Doesn't taste as good. It doesn't taste as good. The makeup doesn't work as well. Like it's not going to function as well.

18:49Vy Nguyen:The performance is not as well. Yeah. And it's kind of the opposite with our product.

18:53The Shopify Masters Host:I've heard you also say that, you know, obviously we're in this world right now where a lot of people are chasing short viral moments. Short form can be really big for brand building. It works for a lot of brands, but you have more of an orientation towards longer form, deeper storytelling?

19:12Vy Nguyen:Yeah. We have real depth in what we're presenting. There's a lot behind it. We're not trying to catch a little hook and get people at this impulse buy. This is a very high considered purchase. It's not an impulse buy. Yeah. We want to make sure there's brand alignment to the consumer. And we think if we explain our brand story, not so much, you know, just romance, one product image or a quick little video. Like that doesn't really explain what our brand completely stands for.

19:41The Shopify Masters Host:Because you're trying to live your values internally, the ones that you're espousing. I mean, because they're real values.

19:46Vy Nguyen:I mean, they're not values as a marketing gimmick.

19:49The Shopify Masters Host:You were talking about an orientation toward this sort of like deeper, longer form storytelling and how that supports purchases that are not impulse. People are doing a lot of research. Where are you reaching consumers with that storytelling? What are the channels?

20:03Vy Nguyen:You know, we put it out on all the major channels, but some of the stuff we do is like we write an annual impact report that talks about everything we do to impact the environment, all of our sustainability efforts. And it's a long, long thing that we publish every year. You know, those are the kind of things that we work on. I'm sure from that document, we'll produce some videos on it. We certainly will have it up on our site as sort of a downloadable PDF. But, you know, through that document, we'll make shorts and we'll make long form content and have it on YouTube and stuff like that. But it starts with like a real commitment to like, OK, let's write an impact report that talks about all the things that we do, how it impacts the environment, how it impacts our products.

20:41Vy Nguyen:And so it starts from that. And that's a real commitment. Like it takes a long time to put that together.

20:47The Shopify Masters Host:There's this other discovery piece, which is that like, you know, as you were saying, when somebody is buying something as high ticket as a mattress or now like the furniture that you sell, most people do a lot of research. I do an obsessive amount of research. Some of the best recommendations that I get are from other friends and people that I trust, right? That word of mouth component. And then also it's like going like obsessively deep on Reddit. on like the Reddit threads. The Reddit threads are a goldmine. Like how instrumental has that been for the business? The sort of marketing that's happening via word of mouth that you're not even controlling.

21:25Vy Nguyen:Yeah. I think if you're committed to building a great quality product and putting the customer first, that stuff naturally happens. You know, we certainly believe in both of those principles. One of the stats we look at is like how frequent a new customer comes back to buy something within 12 months. And it's like over 60%. And so that alone shows you, once the customer is believing in the brand, they come back. And 60 % of them will come back within 12 months to buy another item. That's incredibly high for the industry. It's very, it's much, yeah, it's probably magnitude higher than most anybody else in the industry.

22:00Vy Nguyen:And that's partly because we've built this whole lifestyle brand, but also this whole life cycle products from cribs to kids' mattress, pillows, our organic bed sheets, our mattress protectors. I mean, there's a lot that, you know, that you could come back for.

22:14The Shopify Masters Host:Right. Somebody might not need another mattress a year later, but they might now need a pillow. You now have 14 stores of your own. Yeah.

22:26Vy Nguyen:We call them experience centers, but yeah, we have 14 of our own experience centers.

22:29The Shopify Masters Host:Okay. That strikes me as so true. Your first one was in Santa Monica, which is my local avocado store. And I was telling you before we started rolling that like, I love, I mean, I didn't think I would ever say this about what is fundamentally a mattress store. I love going there. It's like filled with plants and there's kombucha on tap. Nobody's really like trying to sell you on anything. What did you know that you wanted to do differently?

22:54Vy Nguyen:Well, when we set out to build that store, I mean, we literally laid out like, hey, let's look at all the surveys about the pain points of a mattress retailing and what consumers complain about. I mean, literally it was rated like below going to a dentist.

23:09The Shopify Masters Host:Oh, wow. Yeah. That is bad.

23:11Vy Nguyen:It was pretty bad. And so we said, let's do everything opposite. And so, you know, that's sort of the premise we took. And it starts with, you know, people complain that they walk into a store and there's 50 beds. They don't know what you're doing. So we have, you know, the Santa Monica store is probably 3 ,500 square feet and there's maybe eight beds in there. So there's space in between. People feel comfortable to lay down. So there's not like, you know, you're jumping from one bed to another. We give you plenty of sort of personal space to feel and go from mattress to mattress. We create a very calm, soothing environment.

23:42Vy Nguyen:A lot of complaints are like when they walked into retail and you got those fluorescent lights and you got some guy sort of hovering over you all day. So we sort of try to just change all that. We really said let's create an environment where consumers come in. They feel comfortable. We work with them to find what's the right fit for them. And we're not trying to sell them or upsell them. And I think a lot of consumers always felt that in traditional retailing. You want to be a billion-dollar brand. Our goal is to get there in the next three to five years. So that's sort of the marching orders.

24:18The Shopify Masters Host:And where are you right now?

24:19Vy Nguyen:We're getting, I would say, we're a little less than half of that. But, you know, we're on our way. Okay.

24:26The Shopify Masters Host:what as the leader co-CEO leader of this company needs to happen from an operational perspective and a cultural perspective to get you there on that timeline i mean we have everything in place

24:39Vy Nguyen:i mean we have a very proven retail model so but that takes time i think we're going to open another store in new york this year we'd like to sort of scale that team to get to the point where we could do five stores a year our wholesale team they'll put in they'll open another three four locations this year. So we'll be at a close to a thousand by the end of this year. So I think all the things are in place. We also don't want to rush it so that we fumble on the execution. And so I think it's been very important for us to like, Hey, let's do it and do them right. Even with the wholesale side, we've, we've, we've sort of throttled that to a certain amount that we've told the team like, Hey, we only can support 50 new doors a month because you've got to set up training, you've got to set up distribution, logistics.

25:23Vy Nguyen:And so we don't want to set a bad precedent by just rushing the market and not executing well. And I don't think we've had any dealer that we've opened the last two years that have left us. I think actually maybe one, but they were up in Alaska. So that was a long way to ship. That was a long way to ship.

25:41The Shopify Masters Host:Have there been moments on the journey where you realized that you were moving too quickly and it had a negative impact?

25:52Vy Nguyen:I mean, during COVID, I think everybody sort of faced that. I mean, we, we, we scaled from, you know, probably pre-COVID 300 employees and maybe, I don't know, 300 ,000 square feet or something like that in space. And we went to like a thousand employees and a million square feet and operating in, in like five, six different buildings. And, and it got, it got, it got a little messy. You know, we were rushing to make product and rushing to scale. And we weren't as focused on making sure the cost side of the business was managed well enough. And so like post-COVID, it really, you know, sort of hit in the gut where as, you know, the business sort of all that demand got pulled forward.

26:33Vy Nguyen:Post-COVID, when the demand dropped, now you have all this sort of overhead that you've got to manage. And then now you've got to go through the whole process of right sizing and getting to the right cost structure. And that's, that's a very painful process.

26:45The Shopify Masters Host:And what was that recalibration? You had to shrink things to some degree?

26:48Vy Nguyen:We had to shrink things, we had to do layoffs. We had to, we had to do a lot. I mean, you had to sort of do it for survival and we had to do it as fast as, you know, we could. And so it took us a couple of years though. It's right sizing never works as, or never comes down as fast as, as you think it could. Like there's just things that you're stuck and whether it's leases, you know, even layoffs, like it's very difficult to just go in and say, hey, let's just, you know, cut everything. It's always sort of these incremental steps that organizations take. And so, yeah, we did that for the better part of like two years, getting the business back to the right cost structure.

27:26The Shopify Masters Host:You have scaled this company in a really massive way and still dealing with moments where you need to go through a bit of a contraction before it can grow again. Going on a trajectory like that also requires pretty profound growth from you as a leader and a human being. Like, how is... It has been a problem. Who is V, the CEO and leader in 2026 versus 2018?

27:56Vy Nguyen:No, that's interesting. No, it has definitely been a maturing process. I think, you know, obviously there's the empathy side of it and seeing what you have to do to keep the business alive and having to do layoffs. So that's always a painful sort of emotional process. Coming out of that, as we've built a much better organization that understands its mission, understands how to operate the business so that we could achieve our objectives. You know, we always say, you know, but we respect all of the sort of charitable things we do. You know, there's no profits. There's no charity. We can't do, there's no mission without profits.

28:37Vy Nguyen:And so, you know, that's sort of the mantra we have. But yeah, I've had to learn how to be a much more detailed operator. You know, we've brought in a lot more skilled people that have helped, you know, develop budgeting processes and expense management processes. So we're just a lot more tightly organized operation, a lot better organized than we were probably four or five years ago.

29:00The Shopify Masters Host:What do you wish you'd figured out sooner?

29:02Vy Nguyen:Probably that. I think that would have helped a lot, you know, figuring out that up and down the organization to create a structure that we can manage growth without losing sight of sort of the cost side of it. were, you know, for a period of time there, we were, it was all about, you know, growth and catching up to the demand. And I think we were less focused on the cost of doing that.

29:27The Shopify Masters Host:Right. And that is a path that some businesses take, especially if they're VC backed, right? It's like growth over everything, worry about profitability later, but you've been, you've never gone that route. You've never gotten outside funding, right?

29:42Vy Nguyen:We never got that. And so that probably has helped us. I'd be honest with you, like Like we see, even in the mattress space, brands that kind of went that route and never figured out the hard muscle of how to make money. They haven't been able to make it. We've seen that across the whole, all kinds of industries. I think the D2C brands that sort of were built on this premise of like, you know, growth will solve all problems faced a real reckoning. But there's a bit of flushing out of that. And you have to make a profit in business to be able to achieve everything you want to achieve. And so the organization has got to learn how to do that at some point.

30:15The Shopify Masters Host:Yeah. And I like what you said too about profit with purpose. You know, it's like, you think about the profitability of the company also being able to unlock these charitable efforts so that you can make a difference in the world.

30:28Vy Nguyen:The charitable efforts to all the B Corp initiatives we do for their employees. Like you can't do any of that stuff. The 1 % for the planet, you can't do any of this stuff if you don't have profits. And so I think our organization understands that a lot more than than we did probably in previous years.

30:43The Shopify Masters Host:You said that as a kid, you know, having the example of your dad, you're not necessarily really understanding the magnitude of it, but it maybe impacts you more as an adult and you're looking back on what he went through and what he built and sort of what you were picking up by osmosis. Yeah, yeah, yeah. What impact do you think it's had on you and the way you function as a human and also as a businessman?

31:04Vy Nguyen:Yeah. Look, I mean, I think just see the resilience of like picking up a family, going to a new country, learning a language. I think that's taught me just resilience, perseverance. Every day you sort of got to put your boots on and sort of one step forward at a time. And I think that gets you places. And when you get sort of knocked down, get back up and keep moving forward. So to see him able to do that probably makes my journey seem a lot easier.

31:38The Shopify Masters Host:V, thank you so much for being here today. Oh, thank you. Yeah, it was fun. It was a real pleasure. And thanks to all of you for tuning in. Be sure to subscribe to Shopify Masters so you never miss an episode. And we will see you next time.