Ep 584: Building in Pubic: Inspecting Bushbalm’s 70% Growth via Retail & the Pro Channel

0:00David Gaylord:Welcome back to the D2C podcast. Today, David Gaylord from Bushbaum is returning for his third time. I've been following this brand since the early days, right after he left Shopify and experienced a thousand percent growth in his first few years. What's wild is that even today as a much bigger business, David says they still did around 70 percent growth last year. And in this economy, that's nothing to sneeze at. In this episode, we get into the strategy behind that growth, about going deep with one key retailer. think a thousand plus doors, plus expanding the pro channel and treating it like a community, not just distribution.

0:34David Gaylord:Let's get into it. I hope you enjoy it and on with the show. The fundamentals changed this year for Bushbone. For a numbers perspective, we grew 70 % on like a pretty good base and we went from like more or less break even, like always we were kind of growing quickly, break even. This past year we did 10 % EBITDA, like our fastest growing year in three or four years, and we grew at 10 % EBITDA. We're really starting to build the engine for profit.

1:06David Gaylord:This episode is brought to you by Contentful. Marketers, you know that feeling when your creative clicks, when that social post sends engagement through the roof, when your outside of the box campaign hits ROI positive, when a personalized homepage turns prospects into customers, it's utter marketing bliss. Contentful helps you create tailored omni-channel experiences without working overtime. No stress, no limits, only possibilities. Get the feels at contentful.com. David, welcome back to the D2C podcast. I had to just start with the last podcast title because I think I don't even title podcasts like this anymore.

1:46David Gaylord:But the last podcast we did was in 2023 in March. Bush, Bushbaum, David Gaylord goes B2B, enters US retail bigly and rides the vajacial wave on D2C. Tough to top that title, but how are we going to top that today? How has life been since we last spoke in 2023? Yeah, things are good. We've grown a lot as far as just everything, like revenue, top line, bottom line, team size. I think we just passed 52 people. Nice. Which is kind of crazy. And then, yeah, we're by far a much larger retail-oriented company now. It's by far our largest revenue area, both professionally and with Alta Beauty. So yeah, D2C is a chunk of what we do, Amazon, obviously.

2:31But yeah, in-person is now the core of everything Bushbrum does.

2:36David Gaylord:And I think you were just entering in 2023 when we last spoke. Yeah, we were probably just investing in it. I have the numbers, actually. I think we probably still had like 2 ,000 accounts at that point. But yeah, we were kind of just like adding team members for the first time to that team, even though we already had like a ton of momentum. So what's been the biggest factor in that much retail momentum? Because that doesn't happen for everyone. Yeah, I think it's just been obviously momentum hits, but it's a combination of product market fit being perfect. And if you have perfect product market fit, like the momentum's there if you accelerate it.

3:12so yeah we have really honestly like amazing product market fit on the waxing channel so we just accelerated it with investments into like we do trade shows all the time i think last year we did six on the pro channel and then we also do a ton of education now so like live wax demos how to use the wax pro tips like there's so much more that we give back to the community So it's now like word of mouth is really taking us to like a new level for sure.

3:43David Gaylord:And then what's B2B versus sort of B2C retail? What's bigger there? How we see our world is like we call it the pro channel. And it's like a dedicated space. It's focused obviously on the waxing salons. They use it in service and then they also retail. So there's like a lot of revenue there that's like technically retail, but it's with waxing salons. and then we've got our like retail channel we call it which would be like Ulta Beauty, Shoppers Drug Mart, any of these kind of like one-off or like different partnerships like FabFitFun, that kind of thing. But yeah we call them yeah professional and then retail is kind of how we decipher the two.

4:22David Gaylord:And then did you guys you pretty much created a category when you first hit the retail markets like are you in a bit of a blue ocean space or is there a lot more competition at this time? It depends how you think about it. It's a weird area because waxing is like a different channel and it's like a different area with different competitors. And then at Ulta Beauty, for instance, we're in the hair removal section. So in that category, yeah, you look around and you go, yeah, there's not much skincare here. And you look around and it's like, oh, you're a shaving gel and a razor and a hair removal cream.

4:56Whereas, yeah, we're kind of one of the only players that makes skincare that's really good we've got routines for it but after care itself is like a pretty small category it's very focused very niche but we own like a lot of it at alta now and then yeah in the waxing side there's way different competition in weird ways there's like the wax companies that are all around for like 30 years 40 years and then there's a lot of just companies that just do skincare or there's like one-off companies that do wax and skincare, but they're kind of smaller. It's just like a very fragmented world over there.

5:32Whereas you would know in shave, there's like Gillette and there's Schick and there's, yeah, so there's like a lot of bigger players on that side.

5:39David Gaylord:You mentioned trade shows. Are those mainly for the pro side of the business, for the B2B side to sort of like trade shows to reach other waxers and salons? Yeah. So most of them. So six a year probably for B2B. So we do the pro, we go to those shows. It's a lot of work for those ones and it's very busy and there's a lot of education we do and in person, which is good. And then we probably do another three trade shows a year on retail. So like we do one with Alta Beauty. We're going to Expo West this year. So those are more so to like build up the brand and also connect with like future buyers.

6:14And we've taken a good stance that like we commit hard to our retailers. Like Alta Beauty, we've said no to like so many other retailers. But yeah, kicking hard on Alta and saying, hey, we're in. That's like our goal. So we're not at Expo West to like sign deals tomorrow. But we're there to like build relationships for the next like five years for when it might make sense to go to another retailer. Talk to me about that environment.

6:39David Gaylord:Alta wants you to be more exclusive to them? Yeah, I think anyone does. Like everyone kind of wants that and wants you to focus on them and give them attention. And for us, our thing is like, yeah, like we want to too. because the more you focus on one retailer, the better it's going to do. And for us too, it's like we have the pro channel doing amazingly well. So we might not even have the bandwidth yet to focus on an Alta and a Target. And so we've kind of said Alta gets a very focused assortment. We can sell and move a lot of units there. But yeah, a lot of brands in our space, it's so easy to accidentally be like, oh, we signed up with this retailer, that retailer, this retailer.

7:19And all of a sudden you have seven retailers and none of them do well versus like you want to land a whale and then like really focus on it, I think.

7:26David Gaylord:Talk to me about what that means. What does that practically mean to really focus and sort of double down on a retailer? Does it mean promotion strategy, end caps, that kind of thing? What goes into really focusing on a retailer? Yeah, we haven't done a great job of it, actually. Retail is like, I think, hard and different. D2C is so nice because you get to say, hey, we spent this much money on this ad and it led to this many sales. Whereas retail in the early days of Alta, we didn't have that much money per se to invest in it. So what we did is we didn't invest a ton of marketing spend that went direct to Alta.

7:59So it's not like we transitioned our Facebook ad strategy to do 40 % to Alta. We just kept our DTC engine going. And not to say we were lucky, but Bushbaum in the hair removal category, our natural sell-through on shelf was just great. So we naturally sold well. and then the next year we got more products in and it sold better we moved up a shelf it sold even better whereas this year we're at the stage where yeah we're actually investing in alta in more ways and we're doing obviously some digital stuff like criteo and then facebook ads but we're also spending a lot more money on like classic trade marketing so we're probably spending like 200 grand on like a shelf riser so like a display that looks beautiful and sells more and then we're We're doing like etagers, PDQs, which are these like in-aisle displays that sell during like sale periods or whatnot.

8:54So yeah, we're spending a lot more on classic trade marketing is what you'd call it. And that stuff seems to have a pretty massive in-store impact versus online.

9:04David Gaylord:And it's cost effective. Hard to say. From what I've been told from like industry experts is the number one place you need to spend money first is on your display. because 100 % of the people coming to Ulta are going to go there and look at it. That sells them right away, right? It's like a physical right there touch point. It adds a ton of value. And then I've heard the second place is if you can get involved in Ulta Beauty's sales and promotions and it's like their brand calendar, if you can be a part of it, that's how you win. But that's really hard. It's easy to say, really hard to do because they're not going to add you to their brand calendar if you're not a very good seller.

9:49And also, if you're not committing money and resources to it, they're also probably not going to involve you. So it's kind of a give and take negotiation where, oh, hey, we will do that end cap, but we would like to also get featured in the sale emails or the website promotion. So you kind of got to give and take. And so some of it you like overspend on something, but ideally you get it back and get value over here. And then ideally Alta also sees your sales go up and everyone's kind of happy. But for a small brand, it's really hard to be like, oh, we're going to do this$30 ,000 end cap for three weeks.

10:24I don't know. I think it's not in the budget right now. That's the hardest part probably.

10:29David Gaylord:Super interesting. What does your end cap look like? Because you mentioned the image behind you. If you're listening to this, as most people do, you've got a beach scene. You're in your newly non-renovated office. You've finally put up some decorations to add some personality. and it's part of the brand of how you guys show up at trade shows, which is like a lifeguard stand basically on a beach. I just think it's interesting to think about how you think about that next level of branding for your product because your products are all very functional. I remember in our first interview, you talked about really naming things kind of a little bit for the function that they're supposed to have and how you're sort of built problem aware like that.

11:03David Gaylord:But then you elevate it to this other piece, which is the beach. Speak about that a little bit and how that plays into your retail and strategy. I think the retailing side is sometimes the best way to think about it, which is kind of an odd way to think, is if you go to a grocery store and just genuinely look at the end caps, you'll see the generic ones that have no signage and display. And then you'll see the ones with what they call a PDQ, which I always thought, what does that mean? And it stands for pretty darn quick, which is a hilarious acronym. That is. But the reason it is, it's meant to sell it pretty darn quick.

11:38so you you do a lot of like selling features and it explains how it works quickly to the eye so yeah we're doing more of those like pdqs and for us yeah you're right like we focus on very specific so we're doing a pdq in the summer and it's going to be three steps smooth shave so a bit of a mouthful and then it's really three products that are those steps and we're launching like a new shave product in the summer so on the pdq it'll be very clear like oh yeah i use this one, this one, this one. That's why they're all here. I understand. Our names are very specific. So it's like hydrating shave jelly, ingrown hair oil, ingrown hair exfoliating scrub.

12:18So they're very specific. But yeah, the PDQ will add like very, here's why you need it. But also here's like the beautiful brand images alongside it to make you draw your eye to it. So then you do want to buy it.

12:31David Gaylord:How are meta ads doing? How's the meta world for you guys? D2C is just hard in general, I think, for everyone. So what we're seeing is D2C, we were up like 25 % last year. So something like that, which is like pretty okay. However, the brand grew as a whole like 70 % revenue. So all the other channels are like ripping and growing. And our focus is how do we make the flywheel work better? so getting people from waxing salons to then go into an alta or d2c and purchase and we're starting to see that now on d2c like our our amount of word of mouth sales is much higher so it's been yeah it's been good but they're just hard like you're always like cycling new creative there's more competition than ever but yeah we're finding wins like we've had a few things where we we've pulled back certain items that don't have high retention or lower retention than others and we focus our ads more on the ones that have the highest.

13:30And that's actually helped over the year. It really changed our retention across the board. But yeah, we're more focused on the pro side, which means we're less reliant on meta ads, which is kind of handy. Do you ever use meta ads for the pro side? Yeah, we do retargeting a lot of that stuff.

13:45David Gaylord:Yeah. I'm just amazed as a B2B advertiser myself, meta's ability to deliver D2C brands to subscribe to D2C or with our agency business, agency owners, like it's quite adept at B2B stuff as well. Yeah, for sure. It's like definitely getting better. What's helpful for us is sometimes with B2B, it's like you kind of don't want to sell someone. So that's why we spend so much money and time on doing the education as well. It's a lot. People want to get better at their job. So we're always doing educational content. We're getting them to these webinars, demos, and that just naturally leads to people signing up and kind of purchasing.

14:21David Gaylord:I meant to ask you about Ulta. You mentioned getting on their marketing calendar. Are you guys lined up for something in June for bikini season? Yeah, like the calendar is always very specific and there's like lots of things. And typically what happens is you get involved in certain sales. So they've got like the spring break, I don't know, spring haul or spring break sale. There's like the summer sale. It's too early to say like, oh yeah, we're perfectly involved. However, we've been working and we're doing some like trade spend on certain things with the negotiation to, hey, we want to get featured on the homepage for a summer sale.

14:54So guaranteed we're in the sale, but the next phase is like getting commitment that, hey, you're on the homepage and then, oh, you're also in this email, right? So those things have huge impact in your sales. It's just hard to negotiate. Otherwise, sometimes you're like, imagine the website, there's a little box that says 25 % off hair removal, right? Like that's fine. You're mixed in with like 20 other brands versus it saying 25 % off Bushbomb. Like it's a huge delta in the clicks and the amount of traffic and like competition, right? So we're trying to do more of that.

15:25David Gaylord:And you're just trying to court them. You're not trying to come out and give them an overture and say, lock us in. You're just trying to let them see you and see your growth and show that you're investing and you're just hoping. Yeah. Like it's kind of a conversation usually like two, three, four months out where their team is also trying to lock these things in, right? So you've got to be at the right time with the right momentum to like get there and with the right products as well. because if something's too niche, they're probably like, well, no, it doesn't make sense for that block. You need to be big enough to sell.

15:54So yeah, we've had it a few times and it's worked really well. We pushed, whereas you also don't want to overdo it and push too hard, especially if you're not as big as certain other brands. So yeah, we've grown a lot the last year. So it's been easier to get those features than our first year would have been honestly almost impossible unless we were really aggressive and pushed the buyer really hard. Yeah.

16:17David Gaylord:Took them up for dinner, got something over on them. Yeah, exactly. Well, congrats on this growth. You mentioned your team growth up to over 50 at this point between 2023 and 2026. Can you think of, you don't have to call anyone and give them too much praise, but any hires that you've made that have been absolutely critical for the business? Yeah, we've brought on a data team. So we have that really in-house now. So we've automated so many of our reports or weekly meetings, all the graphs that show, they just update. And yeah, that's been really huge. And then, yeah, we've really, I don't know in 2023 how many products we were launching per year, but we've really grown our product development team.

16:59And to the point now where I think this year we'll launch like 18 new products. wild and how many do you have now i don't know actually it's a good question we have probably like 35 okay or something yeah but we we do a lot of limited editions so we launch those they go away we launch more they go away right so that leads to us launching at least 10 limited edition products that are like true beauty skincare wax products and then we probably have another like three that are like accessories as like whatever that might look like. And then we probably have like four full-time SKUs that are coming on as well.

17:41Cool.

17:41David Gaylord:And I see you've got some hypochlorous acid, hypochlorous acid or SAS spray. What's that? Is that a new category? Yeah. Hypochlorous acid is like a really new ingredient compound and it's like super popular. So another brand, Tower 28 launched, I forget what theirs is called, SOS spray. And it just like took over. what's amazing about it is it's like a disinfectant but it's also like unbelievable with the skin so there's so many use cases where it kind of started from what i understand is in surgery they use it for like wound care so like kind of crazy and then there was found all these benefits like it helps with eczema it helps with acne it literally like disinfects so you see people on like an airplane like spraying it on their face just to kill germs but it also helps your skin so it's like all these crazy benefits.

18:29It's like blowing up, but we launched it. And this is where our scale comes in. Our waxing salon business now, we've got about, we're just over 18 ,000 independent waxing salons that use and carry us actively. That's like an insanely large group. We'll probably have 30 ,000 by the end of the year. So this SaaS spray, amazing ingredient, amazing formula. We decided we're only launching it to our professional channel. So you can't get it at Ulta, D2C, Amazon anywhere. And we're launching it first to them as Backbar because getting a wax, like this is a really good product because it helps with redness.

19:06It's kind of a disinfected pre and post wax. So there's all these reasons it's amazing. And then in, I think it's May this year, we're launching a retail version that's like a smaller size for travel on the plane. And that we're also only launching to professionals. The reason is like there are other brands that do hyperchloric acid. And the way we do it, we know is more potent, stronger, last longer, like all these things. However, when someone else is selling something that literally the ingredient list looks the exact same, like what's your advantage? So if we launched a D2C, like what would our advantage be against Tower 28 or...

19:42David Gaylord:Just your brand, I guess. Yeah. However, if we launch it just to pros, the advantage is like all those other brands, like they don't have this distribution network we have that's this massive. so we may as well use that to our advantage and also give an advantage to our pros right they've an exclusive product so that's like a huge bet for the company and we're doing a lot of unique things for that product come may like we're doing a pdq like they'll buy six at a time we always sell case packs of six but that case pack will it's like a beautiful display box that they just put on their shelf that like shows the logo it sells the product so yeah that that's like a big one It's a huge trend.

20:22If you look at like Google trends data to see, and we don't think it's going anywhere. It's like massive category.