Lara

This is Coffee Number Five. I’m your host, Lara Schmoisman. Hi, everyone. Welcome back to coffee number five. I want to tell you a story today. So when I start getting into the beauty market, industry or market, one of the first things I learned is that you have to go to events. You need to walk the events. You need to understand who’s coming out and who are the players. Later on, I became part of Independent Media association, and I met the lady. And I’m very glad that this lady, amazing lady, who became a good friend. Daniela Sia Khan. Did I say it right? Kind of. She’s gonna say it again. And she decided to join us today. Daniela comes with a lot of years of experience in the trade show world. 

 

Lara

00:57

She does so many things, but I admire her so much for what she did over the years. She brought Cosmoprof to the US and she grew it into what it is today. Everyone who is in the beauty industry knows what Cosmoprof is. And Cosmoproph won’t be here without Daniela. So welcome, Daniela. 

 

Daniela

01:16

Well, hi, Lara. I’m so excited to finally be on your podcast. We’ve talked about it for a long time. Yes, you have interviewed quite a few people that are in our network. So I thought it would be so much fun to have a chat with you. You and I do have a lot of conversations about the state of the industry and what’s happening and what we’re seeing, but it’s fun to do it on the record, so. 

 

Lara

01:41

Yeah, but also about. I mean, like all my guests, so generous, they share this information. There are so many brands out there that there’s so much going on between marketing, trade shows, and everything is important, but everything works together, too. I always say, for example, don’t even dare to do pr if your website is not working well, because everything is going to go to your website and your brand awareness. So there is steps for this. So let’s talk a little bit about trade shows, because everyone, they are such a mix reviews. People say, I will never do a trade show. They are so expensive and you get nothing out of it. Other people say, no. Trade shows is a way to go because that’s where you meet the buyers. So what is it? 

 

Daniela

02:32

Well, I mean, so if we take a step back and we look at our industry, right? There are different trade shows that accomplish different objectives. So you need to look at events with the filter of what is my ultimate objective. Am I going there to learn? Am I going there to network? Am I going there to find suppliers that are going to help me create the most innovative product? Or am I going with the intent of meeting buyers because I want to expand my distribution, or do I want to sell? Because in our industry, unlike many in the beauty space, you do have cash and carry events where estheticians and hairstylists are able to go in and they can actually buy products so they can try it in their establishments. 

Daniela

03:22

So, first of all, you need to ask yourself all these questions like, what is my objective? And then look at the trade shows and see which one then best covers your objective and see if it’s worthwhile, then you making that investment. There are events that are going to help you with industry exposure. And I think that you work with a lot of indie brands, Lara. And I think that you want to speak more about how do you scale up your business, how do you grow. So, for indie brands and for founders, it’s very important to go to industry events as a first stage, just to meet and meet other founders like themselves, who they can learn from, who they can motivate one another. I mean, I talked to so many founders that, you know, they’re all by themselves and they work in silo. 

 

Daniela

04:16

With technology these days, you can work remotely and have a team that is located in a different part of the country or a different part of the world. And you feel like you’re all by yourself and there’s so many challenges that are thrown at you every day. And it’s good to speak to someone else that’s in the same position as you are to kind of be like, hey, you know, I am sharing the same thing. But, you know, these are some of the things that I do to clear my head or to help with these challenges. 

 

Daniela

04:46

So I think that, number one, just as a going to events and joining associations like independent Beauty association or like CEW, allows you the opportunity to go to their events and mingle and network and build that community of people that are like minded, that are in the same situation as you. But then also you can connect with people that are far more advanced than you. And they could be your sounding board, they could be your mentors, they could be people you go to and you ask, how do I, whatever that is. And you don’t need that. 

L

Lara

05:21

You can meet the experts, because experts like Daniela, they’re hanging out there. So you get to build these connections that maybe early on, you’re not able to work with Daniela, but you start to see who are the people who they do know the space. I work with founders, like you said, some of them they’re indie grants. Some of them are not so indie. But one of the things that I see in common when they get to me, that they were sold in working with that person or this company and this company, and they didn’t know a space and they didn’t know the players. One, you need to make sure as a brand owner that you really, when you start working with someone, that person can bring to you. Community too. 

D

Daniela

06:09

Exactly. They have access. So that way, whatever you don’t know and the connections you don’t have, they can bring to the table. And when you are developing your company and you’re in product development, you’re looking at developing awareness. You want to make sure that you have the right tools, that you have the right suppliers working with you. So in our industry, we see a lot of people coming from outside of the space, and they don’t know who are the contract manufacturers? What are some of the standard things that I can ask a contract manufacturer for? What are the Moqs? So it’s very important to have someone that has that understanding and relationships and can guide you depending on the financing you have in place and then the objectives that you have. 

L

Lara

06:57

Yeah, but also you need to make sure there are a lot of experts out there that they will do it all. It’s really important that you understand. Like, for example, people come to me, to marketing, if they want to do brand development. I’m not a chemist. I have no idea. I can tell you what ingredients are trending. That’s it. But I put my limits in marketing and what I know what I offer, because at the end of the day, it’s my reputation too. So make sure that you connect with people, that they value their reputation and that they will help you to guide you in that space and not blur those lines. Because that’s what I see, that most of the mistakes in my space happens because someone from brand development recommended something for marketing. And it’s like, oh, no, it’s so oversaturated already. 

D

Daniela

07:48

Yeah, yeah, no, absolutely. It’s number one, making sure you have the right people around you. But again, by having a founder, community and peers that are similar to you, they can recommend people to you and they can make recommendations of things that you should stay away from. One of the things you and I see a lot is founders get on this idea of I need a PR agency when they don’t even have, they barely have a product, they may have no distribution, they have nothing else really in place. So is PR the best use of your money at that stage of the business. I’m not saying you don’t need PR, quite the contrary. 

D

Daniela

08:28

I’m a big proponent that you need to have someone advocating on your behalf and someone that has connections with the media to pitch you the proper way and to help apply for you for awards, you know, which is a way of you getting more recognition, and it helps you gain respect with both consumers and with the industry. But there’s a time at your business, in your business space, when PR comes into play, and no, it’s not. Once we’re done with production, and always. 

L

Lara

09:00

This is how we talk about this, Daniela, so many times, that, for example, there is production on your branding. They need to happen together, because you don’t create the brand like you don’t create your formulation in one day. You don’t create a brand in one day, either. Rushing the process of branding is. It’s a little crazy for me, but also is you need to create a sustainable strategy that works your budget, where you are as a brand, you can scale from there and you can maintain it. You need to know that you can pay your marketing and your PR efforts, or whatever efforts you choose to do, or at least a year, because it’s impossible to move the needle. We are not magicians. We don’t have a little thing, and we can make it happen. It’s a teamwork. 

D

Daniela

09:53

Yeah. So what happens is, you see, and having run Cosmoprof for so many years, and I’ve created all the special areas there, and I would work with hundreds of entrepreneurs. One of the things that you see over and over is you have founders that start out, they create their products, and once the production is done and they put all their money in the development of a product and a website, at that point, their resources are wiped out. And they feel that by going to a trade show like Cosmoprof or founder made or edit, that all of their problems are going to be solved, because that buyer is going to walk over to their. 

L

Lara

10:42

And then if that buyer comes to you’re going to have a bigger problem, because you’re going to have a po and they place a po. 

D

Daniela

10:48

No, but in their mind, it’s like they’re going to place this po and I’m going to get all this money, and then with that money, I’m going to grow my business. And that is not how it happened. If you think you’re going to these trade shows with that vision in mind, you’re not going to have a good trade show. No, because events events where b two b events where you go to meet with buyers and with distributors. Those conversations a take a long time and the big retailers are not going to work with you. You need to show that you are out there already, that you have community proof of concept. Proof of concept that you have enough of a business, common sense and backing to support a venture of that level. 

 

Lara

11:41

Yeah, absolutely. And also remember that even if you get that incredible p o after months of negotiation, then you’re gonna have, you’re not gonna get paid by the supply, by the country. 

 

Daniela

11:55

You’re gonna have to produce to send products. 

 

Lara

11:58

Exactly. 

 

Daniela

11:59

Who is going to give you the money to produce the inventory? And then once the inventory ships, then how do you ensure that people in the stores, when you are alongside these very buzzy brands that spend millions of dollars in social media and advertising and sampling, how are you going to get that consumer to pick your product on the shelf versus theirs? 

 

Lara

12:23

And also, I mean, there are other two case scenarios. First of all, another thing that people don’t talk about, that you need to educate your retail and the salespeople. That’s a lot of budget goals into that too. But also let’s say that you have a miracle and then people love your product, then you need to reorder because you. And where do you get the money for that? Again, yes, you need to have a plan. And many times this is what I see with young brands is that they have big eyes. 

 

Daniela

12:55

Yeah. 

 

Lara

12:56

And they maybe sometimes have the opportunity to talk to someone who was in L’Oreal or in big companies. And those people that they did incredible jobs in those companies, are they still doing those jobs? What happened is that they have the vision and the budget of working with a brand that is already established and a budget that is huge and unlimited in many cases. So the recommendations that you might get from them, you have to take it with a grain of salt. 

D

Daniela

13:26

Absolutely, absolutely. 

L

Lara

13:29

And I see this, oh, I talked to this person that it was in this big company. The other thing I see is that you don’t know your neighbors. It’s like Facebook. You really don’t know your neighbor’s life inside. 

 

Daniela

13:42

I’m going to put on an amazing front. 

 

Lara

13:44

Right, exactly. But I am a little. 

 

Daniela

13:47

Once you go behind the scenes of what you see, not necessarily what the front is. Advertising. 

 

Lara

13:52

Exactly. And they use all these tools, so don’t get, I mean, they’re incredible tools out there, but you need to be very strategic when you use the tools and athlete, what time you use the tools, because tools can be very expensive, too. And trying to make do everything, it will affect your marketing because you’re going to be all over the place if you don’t know how to manage it. 

 

Daniela

14:15

Yeah, I think the challenge is that, yes, as newbies in the business, you start out, as I said, you put all the money in developing the product. Oftentimes you fail to understand how competitive our industry is. I mean, there’s so much product in our space. So much product. So you really need to have something truly revolutionary, either in marketing and the way you approach it and you position it, or your formula has to be amazing. And then you need to leave yourself enough resources for the first year to market your product properly. 

 

Lara

15:02

Oh, I meant to that. Thank you, Daniela. But some things also you cannot do as a founder is to be too in love with your product. You need to be realistic. It’s like when you’re dating someone, you need to be realistic of who you are dating. You need to go with eyes open and to say, this is really my brand. And be honest of who you are as a brand. 

 

Daniela

15:28

Yeah, yeah. It’s having a deep understanding, again, of the competitive space of. Yeah. Who you are, what you stand for, and be true to it. The one. The one caveat I would say, to going to events is that you do meet a lot of experts, and every expert has their own idea. And one of the things I see when I talk to people a lot is they get inundated with everyone’s opinion. 

 

Lara

15:59

And that’s what I call the whisper. Everyone has friends no longer able to. 

 

Daniela

16:03

Focus on what is their true DNA because they heard this from this person, and this person said that, and you should try this. And they have all the. All these, like, ideas they’ve heard, and they’re trying to do, like, everything at one point or another versus identifying what works for me. Where’s my consumer base and where I’m going to be consistent and putting money behind it. You can’t every month go to an event or speak to an expert and then be like, oh, my God. So and so said that this is what I’m going to try now. 

 

Lara

16:41

And that’s one of the things that I found the most with young brands. Thank you for bringing that up. That when you have a strategy, you have. When I work with a brand in marketing, I have a scope of work and say, this is the strategy, this is what we’re going to do. But of course, the algorithm change and things change in trending, so we always tweaking and adjusting, but you cannot change a strategy completely because then there’s no way to analyze what works and what doesn’t work. And like I had a client that wants this email come instead of doing email marketing come with printhead. No, that doesn’t work like that. 

 

Daniela

17:19

Yeah, yeah. 

 

Lara

17:21

I always compare this at when you have babies, when I had baby was overwhelming. How many people want to give you advice? Everyone has advice about being pregnant and then babies. It’s terrible. So one of the things that I learned from motherhood is not to give advice. The only advice that I will say is find someone that you trust, either your best friend, your pediatrician, whoever, and follow that person. Don’t listen to what everybody says because everything you’re going to be doing with as a parent is always wrong. The same happens with your brand. If you listen to everyone, it’s like, okay, you need to know, find someone you respect that you really trust either because they did with other brand or feel connected with that person. 

 

Lara

18:06

I’m not judging who you follow, but you need to make sure that you have a strategy to follow. You’re not all over the place. 

 

Daniela

18:14

Yeah. And give, and give time, right. Because, and every idea and every strategy, once you approve it and you know, you have confidence in it, initially it’s not going to work right off the bat, but you need to give it enough time in order to have learnings behind it and be able to tweak it right. Tweak your messaging, your offer, your campaign and your verbiage. So give it also enough time for you to have all these like testing phase. And then, you know, once you do the testings and then you have something that resonates, then stick with it and give it some bandwidth so you can really grow it. But you can go into it, you know, with the mentality, oh, I’m going to bring this expert and I’m going to, okay, they have a great idea, I’m going to go all in. 

 

Daniela

19:06

And then you expect miracles to happen in two months or three months. And when you’re not seeing that, it’s like, okay, well, next I’m going to try something else because you’re never going to grow that way. You’re never going to really give time to something that might be a great idea, but you just didn’t test it enough. You didn’t put enough time behind it. 

L

Lara

19:29

There is one key to success that I always name that. Of course you need to be doing everything you need to do with your brand, but timing is one of the most important things that not only give it time. Also, there is a right timing for your run. It’s gonna give up, but give it yourself time. And the only thing that you cannot do is stop breathing or stop doing. So you need to make sure that you have the resources in a long term and not keep changing and changing, because that’s what it makes your brand. Deal with it. And confused. And confused. But I have a question for you, because one of the biggest struggles that brands are having is, okay, I have a brand now. I’m going to. 

 

Daniela

20:17

I love your products. 

 

Lara

20:18

No, I was saying in general, I was the same as a founder. 

D

Daniela

20:22

Thank you. You do have a brand too. 

 

Lara

20:24

I don’t have a brand too, but a lot of people are like, not only desperate to go to retail is, and I had this problem too. What do I do now? I have a brand. I love it. I know what to do from the d to c, but it’s really important to be omnichannel nowadays. And as you said, it’s a really busy space. And how do you go to the retailers? There is any or small stores. How, what’s your recommendation for brands to go and pitch themselves? There is anyway, because there are also a lot of people that they’re charged very a lot of money up front just to make those introductions without no guarantees. And many times for a small brand, it’s hard to put all this money out. 

 

Daniela

21:12

Yeah. So I think number one is being realistic. As you said, founders are like kids with big eyes and they see that big dream. And it’s being realistic to understand that when you are smaller, yes. You cannot support big accounts. So whoever tells you, I can get you into Alta or Sephora, and you just started out, unless your brand is truly unique in terms of technology or is viral on social media, I don’t see that happening. Because there’s a path that you have a logical path. So initially is looking at regional stores and looking at independent stores and learning what works, how consumers respond to the sales page, to the product, to your presentation, and getting enough traction that way. 

 

Daniela

22:06

And the more sales you have, the more visibility you have on social media, online, in smaller stores, then the more awareness you’ll have, the more learnings you will have. So when you go and you pitch to a bigger retailer, you can say, I have an engaged community, I have x amount of repeat purchases, I have these retailers, and I’ve grown the business exponentially because that’s the story that you want to see and you want to be able to portray and also what. 

 

Lara

22:40

You need to keep in mind is your margins. Your margins are very different from what you’re going to. And this is. I’m going back to the formulation. I seen this as a mistake, too. People are not thinking of the margins and how much you’re going to have to give away to go retail. 

 

Daniela

23:00

That’s what happened when that whole direct to consumer, really, model really started evolving. A lot of brands recognized. I could just go at it myself. I can create a product, I’ll build a website, and then I will put a lot of advertising dollars behind it, and I will keep all of that rest of the profit in my pocket. So they created these brands and products without enough margin for wholesale. And now, lo and behold, the market’s so competitive, social media is so much more difficult to get. The ROI you used to cost of acquisitions are so much higher. So for beauty products, you’re oftentimes losing money to acquire that first customer. So now everyone’s losing, is looking at, oh, brick and mortar stores. We need to be into stores. We need wholesale partners. But the margins are not there. Why? 

 

Daniela

23:55

Because you started out your model thinking, oh, if I sell online, you know, I’m okay with this cost of goods. 

 

Lara

24:02

Yep. 

 

Daniela

24:03

So that’s another education that we have to do. And again, that’s where also conversations with peers that are like, you come in. Because I’m not just saying it to you as an expert. You know, you can talk to other founders that are selling at wholesale, and they can portray to you the real story. 

 

Lara

24:22

And you know what? You might be able also to get referrals, recommendations. There’s not better referral from another successful brand owner to another brand owner, even for service providers like, I know Daniela, for a fact. And so do we choose the people that we work with because we want to be. To work with people that we can really help. We’re not gonna. Again, it’s a reputation thing. We’ve been in the space a long time, and we want to work with brands that we can really help. So if you get an introduction or a recommendation from someone in the industry, it’s always a plus. 

 

Daniela

25:00

Yeah, no, absolutely. I think that, yeah, you need. You need to. You need to really do your research, but you need to make sure that when you do have. When you go into it, you create a product, you have enough money to support your business. And do not count on those big pos to come in and help fund your business. 

 

Lara

25:21

Let’s talk about raising money, because that right now, also, there is a big community of DC, but you need to give away part of your company, then you have other opportunities of, for example, get money against a purchase order, but they’re not going to give you that. If you don’t have proof of concept and some money before and your books have not done right, there is a lot of things to be in place. And if you listen to all the podcasts that we have, you can get all these bits and pieces of information. But the thing is, what’s your take in a small brand trying to go on getting money? 

 

Daniela

26:03

It’s very challenging. Unless you have a patent or you have a social media presence, you have a built in community where you know you’re going to be selling your product to. It’s very difficult to secure money unless you are at a certain volume. I mean, if you are over two, $3 million, it’s easier because at that point you do have certain KPI’s in place, you do have traction, you know, you have something to show those investors. But if you are at under $1 million is very difficult. That’s where your friends and family network comes in, you know, angel investors. But I hear that is one of the biggest challenges in our space, that there are so many. 

 

Lara

26:46

And remember that you are always giving away your company and you’re giving away. 

 

Daniela

26:51

Your company for sure. But again, there’s not even like the private equity groups out there, they’re not looking for companies under and even 3 million, I mean there are a few, but yeah, even 3 million is very small. 

 

Lara

27:05

Yeah. So going back to trade shows, when is the right time for a brand to go to a trade show? I know that for example, as Cosmoprof you created a whole space that it’s for indie brands and it’s my favorite place to hang out normally. So thank you for that. That and thank you for Cosmoprof, who kept it. But when is the right time to go to a trade show? 

 

Daniela

27:33

I think you should visit, you should go to education before you start your brand. You should be there again attending networking year two, when you’re like year three, then it’s worthwhile making the investment because by then again, you have enough traction so that when you do speak to the buyers, when you speak to distributors, you already can show some success. Because if you go there and you. 

 

Lara

28:03

Have no, like, I just lunch, no. 

 

Daniela

28:07

Proof of concept, like you come literally with your products from your kitchen or from your contract manufacturer. It gives me no faith as a buyer that you bring anything to the table other than your cool product. Okay. 

 

Lara

28:21

This is also some, like, if you hear my first podcast, oh, my God, it was so tense, and now it’s so fluid. The same happens when you have to pitch your product to anyone. So I always recommend my brands try to go small places, local places, and talk to the audience. Do small, like, people can try the product, even they can buy the product. They might be able to make some money, but also you can talk to people and see what they think and what they need, because that’s what Niela just told us is it happens. It happened. For every brand. I know they had to have some kind of alteration in the first year, either the formulation or packaging or revamping the website or something with the branding, there is always something. 

 

Lara

29:10

So just talk to people, not only to your peers, but also to people not in the industry. Sometimes we know too much. 

 

Daniela

29:19

Yeah. I think when you go to a trade show, it’s such a big investment for a brand. It’s not just the cost of participating, but it’s the cost of flying you there, flying a team, you know, what do you do at the event? Do you give out gifts? Do you know, what do you do? 

 

Lara

29:35

So the cost of the setup, the. 

 

Daniela

29:38

Setup set up is the bringing your product to your booth. People don’t think about that caused a drayage is incredible. 

 

Lara

29:48

And exhaustion that just to walk the show is exhausting. Right. 

 

Daniela

29:52

But I’m talking from the point of view of exhibiting. You asked me when is it the right time? And I’m saying, I think you should be in the market for at least two years, two to three years, because a, you want to have an understanding, you want to have your pitch, you want to have some success that you can talk about. You want to understand your cost of goods. Right. Because when you go to a show like a Cosmoprof, let’s say you have international distributors that come in, those margins are way different than wholesale. 

 

Lara

30:20

Yep. 

 

Daniela

30:21

So you want to have a little, some kind of a history, company history behind you. So that way you’re very assertive, you’re comfortable speaking about anything that a buyer might throw at you, and then it gives the other person confidence that you know what you’re talking about, that you can support their business if they take a chance and they partner with you. 

 

Lara

30:48

And remember, when you go to a trade show, this will be, if you meet the buyer, this is the beginning of the conversation. So you need to be prepared, have your debt, have everything in place that when you follow up with that conversation, you can have everything that you need to follow up, because it’s not going to choose from one day to another. 

 

Daniela

31:10

No, you’re not going to get a PO on site. I mean, look, it happens sometimes. You know, there are those rare exceptions where you will get a PO or, you know, I heard at an event that there was a cv’s buyer who placed a million dollars on site, but that rarely happens. Okay. Mostly it’s, you make a lot of connections, you pick up a lot of business cards, you talk to a lot of individuals covering different facets of the industry, and then that’s just the inception, that’s just the starting point. And then you keep having follow ups and follow up conversations. And that’s where consistency pays off, because I recommend you do that trade show again the next year because the buyers are not going to be consistently responding to you and engaging with you. 

 

Daniela

31:57

But if they’ve tried your, you gave, you gifted them the products, right? A year goes by, you’re again at the event when the buyer will pass by. They’ll be like, oh, my God, I tried your products. I loved it. And from there, you can gradually start getting your foot in the door. But it’s a process, let me tell you. 

 

Lara

32:17

Totally. And I have a big advice for, and I don’t give advice lightly. Just make sure you talk to everyone, because even though this is a, there is a lot of products out there, it’s a small community, and you never know who knows someone don’t. Because I, like, it happened to me that people, I go look at the products and what do you do? Oh, I do marketing. Oh, like, they stop talking to you. 

 

Daniela

32:44

Yeah, yeah. 

 

Lara

32:46

And they don’t know. 

 

Daniela

32:48

Being engaged, being engaged, for sure, is one of the things I always said, you know, you have the big international trade shows, you have people coming from different cultures, right? So they’re not as comfortable giving eye contact, smiling, you know, being more flowy with conversation. But I think that when you make that investment, you’re at an event and you’re there to network and connect. So, yes, be active, engage with people. Acknowledge everyone. 

 

Lara

33:20

Absolutely. And take business cards and phone numbers and follow up with everyone. You never know what the world can bring to you or what doors. 

 

Daniela

33:30

And even if they’re not a buyer of products, you know what, they’re a user. 

 

Lara

33:35

Exactly. 

 

Daniela

33:36

They’re a consumer. At the end of the day, they may actually love the sample you give them so much, they might go on your website and buy it. So at the end of the day, you know, any conversation is a worthwhile conversation to have. And you might get a nugget of free advice from someone like you know? And you paid nothing for it. So, yes, talk. Talk to everyone and be engaging. 

 

Lara

33:59

Daniela, thank you so much for having coffee with me. I really enjoy this as I have a conversation. Okay. And to you guys, I will see you next week with more Coffee Number Five. Find everything you need larashmoisman.com or in the episode notes, right below. Don’t forget to subscribe. It was so good to have you here today. See you next time. Catch you on the flip side. Ciao. Ciao.