How to Market a New Product Launch

0:00When we created this demand, we targeted people on Google. So anyone that was typing in sustainable packaging, we were hitting them with this landing page and they would get a free sample. Hello, welcome to Shopify Masters, your companion for starting and building a business. I'm Shuang Esther Shan. When you run a business, every decision counts. That includes how you pack your orders. Anita Sakhar and Vic Dave are life and business partners. They ran an online retail store back in 2016, and the amount of plastic they needed to fulfill orders shocked them. So they looked for sustainable alternatives.

0:41They worked with multiple suppliers to find materials that can decompose naturally. In the end, Anita and Vic created shipping packages that are at-home composable, made from plants. And they launched Hero Packaging. Their idea is a hit. In fact, just last year, they received more than a million dollars in fundraising. Anita is here now to share how they turned a problem they wanted to solve into a profitable business with over 50 ,000 customers. Anita, welcome to the show. Thank you so much for being here. Thank you for having me. I'm so excited. Very, very excited to chat because I was actually researching and trying to understand sustainable packaging.

1:25and that's how I found Hero Packaging many years ago. So take us back to 2016 and what was the typical problem that you faced with the traditional packaging you were using at the time? I had a business back in 2016 and I was sending out orders without even thinking about packaging. It was all about trying to get out of my nine to five, out of the corporate sector. I just wanted a business where I could make some money and not have to work for anyone else. and packaging was not something that I ever thought that I would be in. But there was a time, you know, it was like a peak season where we were shipping out maybe 60 or 80 orders a day.

2:06And I remember this one particular day, it was during school holidays and I had my kids with me and they were sitting in this room and they were helping me to pack orders and we were putting all the products in these plastic mailers. We were sealing it up and they were putting the shipping labels on it and we were waiting for the postman to come. and I just remember seeing a sea of plastic everywhere. The whole room was covered in these plastic parcels and I knew that what was inside those parcels was not only the product but also bubble wrap and tape and a whole bunch of other plastic stuff. And it kind of made me feel sick knowing that as soon as it landed on someone's doorstep, it was just going to go straight into the bin.

2:44Most people didn't recycle and so it was just going to go straight to landfill and it had a sickening feeling. and I remember driving home to Vic, my partner, and I said that we've got to do something. We've got to make a change. Either we've got to move to boxes or we've got to move to paper. We've got to do something different because I certainly can't use this plastic stuff anymore. It looks bad. It's also just horrible for the environment. That night, I remember spending about four or five hours that night researching what I could use and all I could come up with were boxes and boxes were way too expensive to ship, especially the type of products that I was sending.

3:23And I looked into paper and it was great and it was recyclable and compostable, but they were not waterproof. And so again, they wouldn't work for the products that I was sending. And so I realized that I wanted to create something for my business that I could ship products in that kind of felt and looked like plastic, but wasn't plastic. And so that's kind of where that seed was planted. And I was thinking like surely there is something that I can do to wrap my products in something a little bit more eco-friendly. And that's kind of where the idea started. And for more context, you were running a fashion business at that time.

3:59So you were sending out pieces of clothing, which waterproof packages were very important. So the different pieces of clothing didn't get damaged. So I think a lot of direct-to-consumer business owners would go through the same kind of problem and they realized that, hey, it would be cool to have something that is more sustainable, but you actually wanted to do something different. So how did you start researching and looking for manufacturers that could bring this idea to life? It was a really difficult process because obviously the first thing you do when you are a new business and you want to start a product business is to go to Alibaba.

4:39That I think is the number one place most people go to because they don't know where else to go. So that's where I started. And I actually went to Alibaba and I was typing in eco-friendly packaging and sustainable packaging and things that were coming up just looked like plastic to me. I actually ordered samples of those to see what they would send me. And it turned out that they were just plastic. They were just sprouting all these names like green and biodegradable and eco-friendly. And I was just getting sent these plastic samples. There was this one supplier though, who I actually found through Google search and not on Alibaba.

5:13They were not on Alibaba at the time. And I remember doing a Google search because I had heard of these compostable bags. So when we went to the grocery store, there were vegetable bags that were compostable. And I remember thinking, how cool would it be if I could make mailing bags out of these. And so I went to Google and I typed in biodegradable bags and a supplier came up that was producing these compostable resins. And so that's the first manufacturer that I ever spoke to that actually told me what I wanted to hear, which was we can produce these compostable resins for you that can be turned into anything.

5:53The only problem is we can't turn it into bags. So I had to go and find another manufacturer of plastic bags. And I had to see if those two manufacturers could work together, getting the compostable resins from one manufacturer to the plastic bag manufacturer. And that's where the first prototype of our compostable malo bags were made. And you were very hands-on with the iteration as well as the product testing. You brought the products home and also tried to compose them. What advice do you have for founders who needs to do testing on their own and what should they be aware of during that process?

6:31You have to test everything on your own. You cannot rely on third-party certifications. We do have third-party certifications. We get our own tested through third-party places and we have a place in Australia called ABA which is the Australasian Bioplastics Association and that's fantastic to get certified by someone like that but unless you are doing your own testing in your own backyard or even if you have products like fashion products, unless you're wearing it yourself and testing it out, how do you know whether they're good or not? You don't know the conditions that they're being used in and you know your product, you know how it's supposed to be used.

7:08The number one thing I would say is to test your product, any sample that you get, wear it, try it, compost it, do whatever it takes, but it has to be you and it has to be you that can certify that it's good enough. There is no other board or party that can tell you if it's good or bad. And I also think you played a dot connector kind of role in this scenario where you yourself were finding different manufacturers and connecting them together. Were you at all nervous about different competitors perhaps copying the concept or coming up with similar process or ideas on their own? Of course. There is no business that has ever been started that doesn't have a competitor that comes into the space.

7:52In fact, my first business, I was the competitor that copied another brand and that's how I moved out of my nine to five. So I knew that as soon as we made some kind of traction, we would get competitors in the space. To be honest with you though, this didn't start as a business idea. This started as a solution to my previous business. I just wanted to use packaging that was better for the environment for my previous business. So I wasn't even looking at competitors. All I knew was I needed it to be beautiful. I needed it to not break down during the shipping period, but I needed it to break down in my home compost bin.

8:26And I was so focused on making the right product for my previous business that I didn't even think about competitors in the space. It was only when we actually made it an actual business idea that I started to see smaller competitors come up and I did get a little bit worried and I was nervous about that. But there were so many things that we did in terms of our branding and our digital marketing and the way that we were educating customers that I knew we were still ahead of the game. And for a while, you were actually balancing both businesses and your partner Vic was also employed full-time and working on hero packaging part-time.

9:03So what was the transition like to fully focus on hero packaging and what point was the right timing for the both of you? There was absolutely no right timing. It was that I just wanted to work with my husband. It was a goal of ours from the very beginning that we could start a business together and grow it together. We had my previous business and that business had taken over his full-time salary. So I wanted him to leave that business. And we had this tiny little project that we were working on called Hero Packaging. It wasn't even called Hero Packaging at the time. It was just packaging for our business.

9:38And I said, I think that you could handle that and I can run my previous business. So he left that role. We didn't have any financial planning. We didn't really think about it. We just went, this is what we've always wanted. Maybe now's the time. Let's just do it. And at first it was incredible. He left at a time where it was peak season. I think it was October. So all the Black Friday sales were happening. It was going towards Christmas. it was just amazing. But then January hit and it was really low sales, February low sales, and we didn't know whether we could actually survive this. And so there's never really a right time.

10:14We did what we thought was right at the time. And of course it has worked out for the best, but it was really, really scary to have someone who has a steady income leave their role and join you in a business that goes up and down. For a lot of founders who are entering business, with our life partner or a sibling or a friend, it is a lot of risk you're putting on the relationship, entering a business, especially for you when you're giving up a stable income. For Vic's case, how did you get over that mental hurdle of understanding this is more financial risk we're also taking together as a family?

10:51What we knew was the goal, and that was to work together, and we had to make the finances work. We had two kids at the time. All we knew was that we needed a certain amount of profit in the business in order to sustain our lifestyle. And we don't need much, but we need our kids to be fed. We need to feed ourselves. We need to make sure that we've got our house. So we knew that we needed a certain amount of money. And that's what we have always kept in our bank accounts. We don't move that amount of money and it's that safety net. But you know, I would always say this to anybody is that you know your situation the best.

11:30You know your relationship with your sibling or your friend, your husband. If you think you can work together, fantastic. But if you think you can't and everyone else is doing it, that doesn't mean you should do it. You need to do and make the business decisions that are right for you and your partner and not just listen to what everyone else is saying. You know, our parents are really typical standard Indian parents who are absolutely Vic needs to have a nine to five job. That is what we do as Indians. We have a stable job and we have income coming in the door. And I remember saying, well, I don't want to do that.

12:04I don't want him to do that. He's unhappy in his job. And I want to create a life for us that we're actually kind of proud of. And that takes a little bit of risk. And that's what we did. As also a third culture kid and someone who comes from an immigrant family, I can definitely relate to that. But for you and Vic, you also had this financial journey with Hero Packaging where everything was mostly bootstrapped for a very long time before you seeked outside funding. So talk to us about making your finances last and building out a runway for yourself for the first couple of years. We had to bootstrap it.

12:42And when I say that, I mean, we took about$20 ,000 out of our mortgage to start the first bulk order. And that was true bootstrapping because we were nervous. We didn't know whether we were going to be able to pay that back to ourselves again. And so we knew that the profit that we made in the business had to cover the next level of growth. And for two years, that was absolutely fine. You know, we had so much growth and we priced our products pretty well and so the profit was covering the next level of growth and sometimes we'd sell out because we just didn't want to hit and take any more loans or anything like that so we just sustained ourselves for two years and it was a really nice level of growth.

13:25Then last year came along and we realized that the demand is so high for the business and the products that we were making and e-commerce businesses were popping up left right and center and a lot of businesses were looking at sustainability practices. So we needed to level up our product and our inventory. And so that's the time when we said we can either take a business loan or we can do crowdfunding and, or we could actually go with a PE and get some money that way. And it was that time when we said, okay, well, we can't take our business to the next level by ourselves anymore. We need to get outside funding.

14:05And And that's kind of what led to that equity crowdfunding that we did last year. I think it's super interesting because you are catering to fellow founders and they see the pain point that you're trying to solve. So it's really incredible to see that over a million dollars was raised by people who actually backed your idea. And I feel like that also guarantees a bit of freedom in how you operate your business. So tell us a little bit about the decision with going the crowdfunding route. We had people come to us to say, can I invest in your business? And we've had that since day one. We have had high net worth individuals.

14:43We've had PE firms. We've had venture capitalists come and nothing felt right. I didn't want to answer to anybody else. That's why we started a business in the first place. We didn't want to have to say, hey, I'm going to go spend time with my kids today or whatever I wanted to do. And we knew we needed money. So the two options that we said to ourselves were get a business loan or go down the equity crowdfunding path.

15:11Business loan didn't seem very exciting. We did explore that option. When we looked at equity crowdfunding, we realized we could actually get our customers to invest in our business. And what that means is that whoever invests is then loyal to the business because a lot of the people that will invest are business owners and they are our customers. and they will keep buying from us. And so at least we know we have that many customers to keep us going through anything. And we thought that was a really exciting idea. We also thought that those pool of investors that we could get who would be our customers, we could ask them advice and get their feedback before it goes to the public.

15:48We could use them for co-creation of products and what the next color could be and what the next sizing is. And should we invest in a machine or what should we do next in the business? And they would have invested interest in us and tell us the right thing. And so we thought that was a really exciting path. We launched that and luckily we got 700 of our customers who are now really a part of our business processes. I think it is so exciting. To your point, a business loan is something you just process and with crowdfunding, it's also a marketing tool where you can get more of the community ingrained and also aware.

16:29And then also you have a great space for feedback as well. Very excited to chat more about the different marketing strategies behind Hero Packaging. I'm joined by Anita Sarkar, co-founder of Hero Packaging. Thanks for listening to this episode. And I hope you're enjoying our conversation. While you're listening, follow or subscribe to Shopify Masters if you haven't already. And let us know your thoughts in a review so we can get your feedback for the show. Thank you. I think what's amazing about Hero Packaging as well is you're connecting a community of founders because you're really servicing a business pain point.

17:08How did you tackle this marketing front? Because you're having to speak on almost a business-to-business process, but you're also talking to consumers as well at the same time. I knew I wanted to do this as a business. I decided that I wanted to ask other business owners whether they would be interested in this and it was a resounding yes. So all of the education and everything that we tell our consumers and our businesses now actually starts from well before the business actually launched and that was the pre-launch strategy and that was actually determining demand before we actually brought the product out.

17:47And so when we created this demand, we targeted people on Google. So anyone that was typing in sustainable packaging, we were hitting them with this landing page and they would get a free sample. And so we thought at that time, you know, we're going to get about 30, 40, maybe signups to get some free samples of eco-friendly packaging. And in a week we got a thousand people. And that was the first sign where we said, people are interested in this. We, yes, we have to create demand. Yes, we have to educate people but people are already looking and this was back in 2018 and that was the time where I got really excited and ever since then we've kind of taken that demand that was already there and we've kind of asked questions and any question that we have asked and any answers that we have received from our customers we've taken that and put it into short form content and blog posts and we've put on our website as FAQs and we always listen to the questions that they have and our answers are put on all our platforms.

18:47So that is a really major focus for us because the questions that businesses are asking are also the same questions that customers are asking. And the main question is, what do I do with this once it lands on my doorstep? I don't want to throw it in the bin. So what do I do with it? Where does it go? And a lot of our videos on Instagram, on TikTok, all of our blog posts, it's all about what to do with the packaging, how to start, and even things like what compost bin to buy from the shops. So we are really, really focused on not only creating like a really fun and eco-friendly product, but actually educating.

19:22And that is a huge, huge part of our business. I have to say I can attest to the excellent Google search, search engine optimization, because before I was working on the podcast, I was working as a writer for Shopify. So one of my story ideas was finding sustainable packaging solutions for business owners. And this is back in 2019. And I too went on Google and hero packaging was the first result I found. So it's a great testament to how well you built up your Google search results. I have to say that all of those learnings came from my previous business. And I'm so lucky that I was able to start a previous e-commerce business because it made me realize just how important one Google is, and then also just the power of content and having it everywhere and being everywhere all at once at any given point in time, because it is content is like that free tool that you can get brand awareness and traffic to your website and not have to pay a dollar for it.

20:22And especially when you're starting out as a bootstrap business, it is critical that we are just pumping content, whether it's educational or just product based to every platform at any given point in time. Because when you're creating more content, it builds up your credibility and And therefore, the search engines will actually point to your website. Another great part of your marketing effort is the fact that it's not just educational, it's still entertaining. And you're also allowing customers to understand and perhaps demand sustainable packaging from the businesses they order. So talk to us about that balance of making content that's educational, entertaining, and still fun.

21:05Well, packaging is boring. and so we had to make it fun from the beginning if you think about any other packaging you know you look at your big shipping providers and the packaging that they that come stand with them it's that really shiny plastic it's boring and it's everywhere when you have something that is colorful and also eco-friendly and it lands on someone's doorstep and it makes such a big impact and they look at the back and it actually tells you how to compost it. The whole idea around that is that it is exciting. It is an experience. So it's not just someone who buys our mailers, but it's actually the end customer who buys it from the business, who buys it from us.

21:47And so that experience of landing on your doorstep and actually putting it on their stories, immediately people are like, what is this? And they put it on stories and they talk about a compostable bag that's bright pink, you know, and then they chop it up and put it in their home compost bin and it lends itself to such great user-generated content and so we take that and we kind of emulate that with our own content as well so we look at what customers are saying and how they're doing it and then we'll take that video and we'll stitch it and we'll say actually rather than just ripping it open why don't you try cutting it open and you can actually reuse the bag and let us show you how to actually open the bag and so we try to take whatever is already out there and what's being posted about us and take that and like redo it in the way that it's supposed to be done and we make it fun again and we we get the whole team involved we do dancing videos around composting just anything to make sure that people understand that just being sustainable doesn't make you boring focusing on packaging and your business doesn't make you boring you can actually make this such an experience you know that unboxing experience for your customer is so important and so that to me is I think the kind of seed and the foundation and then we try and look at all the other trends that are happening, anything that's in the news that we can talk about to make things extra exciting.

23:03I think the fact that you found this solved and created compostable mailers also adds a layer of complexity to the business because you're technically having a product that does have a shelf life. How have you tackled understanding logistics, the inventory managing demand and also making sure the mailers are not overbought and they're at the prime state when they reach the end customer? We made a ton of mistakes when we first started. So in the first two years, we would bring in inventory and it would sell out and we hadn't projected when we can bring it back in again. Sometimes we would bring something in and it wouldn't sell as well.

23:47And then the mailers after nine to 12 months start to buy a degrade. And so they actually can't be used to ship products in. And we made so many mistakes. We had to reiterate. We had to understand how to do the inventory planning. But it became so much of a full-time job that that was actually one of our first hires. We got someone in to do the demand planning and to do the logistics. And we have a supply manager who is incredible, who is a Mandarin speaker, who can speak to our suppliers in China, but who can also speak to our suppliers in the USA. and who can also speak to our suppliers in Australia.

24:22And she manages the inventory planning and we have now buffers in place so that if we are running low, the next stock order is placed. But we also know that things can't last for a very long time. So we don't actually over order anymore. Another thing that we decided to do very early on is not to do seasonal branded mailers. So Christmas mailers or Easter mailers or Mother's Day mailers because we hate waste. The whole point of our business is to not have any waste. What ends up happening is with any business, you have a seasonal stock of something where that Christmas print is there, then you have leftovers.

25:00And we can't afford to have leftovers because those have to be sent to an industrial compost facility. We'd rather not have that waste. So we try and do the bare minimum, but just enough so that we never go out of stock. And it's a really, really tough thing to do. In that same vein, I think right now there's also a lot of economic pressures on businesses with inflation rate, interest rates. So there might be fluctuations on how businesses operate. So how are you adjusting your forecasting and inventory, keeping the economic pressures in mind as well? We are just meeting demand as usual. But what we are actually doing is focusing so much on profit.

25:41I think for a long time, you know, in a business, you get so excited with revenue growth and you forget that it's actually profit and the cash flow in your business that makes for a healthy business. A lot of people love to say, hey, I'm a seven figure business. I'm an eight figure business. But actually, I always ask, what is the profit margin? How much money do you actually have left over after everything is paid? So this year, that is what we're focused on. last year we raised funds but we still had cash flow issues and we still had profitability issues so I really had to knuckle down cut away expenses and we are now focused so much on profit so that our cash flow and our profit is allocated correctly to the new stock purchases and if I feel like we don't have enough what we do is we just don't order that new product that we wanted to order we just stick to what we know is the core range and we bring in what we know is right until that economic pressure has been lifted.

26:40We know that businesses are cutting back and the easiest way to cut back in business is to make the cheap switch, you know, back to plastic. And so while all of these things are happening at the moment, we just want to make sure that we are a healthy business until we can really, really push new products. Hopefully that is in about a year's time. So last year you went through a successful round of crowdfunding, which is going to fuel this year's growth and profitability for Hero Packaging. How are Vic and yourself balancing both the professional and personal side of growing a business together?