After the birth of her daughter, the creator of cult brand Frank and Eileen saw the world a little differently. Women are superheroes and Audrey McLoghlin wanted to create a shirt just for them. Grayson is the result of her 5 year consideration on building a new brand from the ground up. In this episode, we talk about how to create a sustainable business with a B2B component in the new DTC era, how to play the long game, and how to join the “hundred club” — owning 100% of the business. Listen now!
- Brian and Phillip are joined by Audrey McLoghlin, Founder & CEO of both Frank & Eileen and Grayson.
- Audrey has created a new business model entitled the Sustainably Hybrid Vertical Brand.
- How do you navigate today's fast-paced direct-to-consumer marketplace with a wholesale brand?
- As a wholesale brand, your partnerships are critical to your success and can turn your distribution channels into customer acquisition channels.
Who Is Audrey McLoghlin?: A Serial Founder in the World of Consumer Brands:
- An engineer by training, Audrey admits that she has now become a serial entrepreneur.
- Frank & Eileen was founded ten years ago when Audrey fell in love with Italian menswear fabrics and wanted the same fabric available for women.
- Over the years, Audrey learned that in business, it is almost more important regarding what you say no to than what you say yes to.
- Frank & Eileen has been very diligent in focusing on a single product and has become famous for making an amazing button-up shirt.
A New Venture: The Grayson Story:
- Over the past five years, the entire retail landscape has changed, and Audrey wanted a brand that captures what is going on today and speaks to the customer that they wanted to talk to.
- Grayson is named after Audrey's four-year-old daughter, Grayson.
- Audrey hopes that the quality and reputation of Frank & Eileen's product will assist in reaching a customer base that fits Grayson.
- She was inspired by all of the powerful women working around her that thought it ways that are totally different from previous generations.
How Times Have Changed: A Shift in the Retail Landscape:
- Ten years ago, social media and eCommerce didn't exist as they do today, so brands launched wholesale as opposed to direct to consumer.
- Everything was about having the best product and getting that product to be sold in the right places.
- Today, you still need incredible products, but you also have to consider why you are making the product.
- In starting Grayson, Audrey spent a lot of time looking at the business landscape and noticed that the path to profitability has become elusive due to the significant costs of being successful in the DVNB space.
The Sustainably Hybrid Vertical Brand: A Whole New Model:
- In creating Grayson, Audrey hopes to create a whole new type of go-to-market strategy called the Sustainably Hybrid Vertical Brand.
- This model has all of the good qualities of a direct-to-consumer brand but also balances the direct-to-consumer component with the wholesale component of a brand.
- In the new retail landscape, you can have strategic wholesale partnerships that can become your customer acquisition strategy.
- This is the first example of your customer acquisition strategy, also being a lucrative money center.
Shifting Channels: From Wholesale to Direct:
- A healthy ecosystem in which a brand supports its wholesale partner but also supports its customers with an experience that only the brand can bring is key to being successful in this new model.
- A brand can also give its customers the freedom to purchase either from its wholesale partners of direct from the brand itself.
- Pricing and margin are critical to the health of the brand but also to the partners of the brand.
- How do you identify partners that would be strategically valuable to your brand?
The Hunt for Explosive Growth: An Untapped Price Point:
- Frank & Eileen discovered a particular niche in the women's button upmarket that was not being covered by any other brand.
- It was vital for them to serve this price point while still delivering the quality and experience that the brand was known for.
- Finding the right supply chain was imperative for accomplishing this goal.
- You have to be very strategic and be patient, see what initiatives work before moving on to the next strategy.
Fundamentally Sustainable: The Power of Wholesale:
- Due to the nature of wholesale and receiving funds and purchase orders for your product, you have access to actual capital that can be spent in ways that aren't a risk for your brand.
- DTC is just a distribution channel in your strategy, and you have to look at this and other channels in strategic ways to decide when to pursue them.
- If you invite wholesale partners who become interested in your product, it serves as instant validation of a need for your product in the market today.
- In theory, you don't need much capital to get through your first year through this model.
The Pitfalls of Quick Launches: Costs, Costs, and More Costs:
- It has never been easier to launch a brand quickly thanks to today's ecommerce channels and technology, but the costs of this are higher than ever.
- Venture Capitalists are looking for unnatural growth, and that, in conjunction with an inexperienced founder, is a particular combination.
- Is it sustainable if every new brand needs to raise tens of millions of dollars before they reach profitability?
- You see the glory, but you don't know the story as there is a great story behind every entrepreneur, even if they don't achieve large scale success.
Common Misconceptions: The Wholesale Truth:
- Wholesale is more complicated than direct-to-consumer brands think it is.
- Wholesale and direct-to-consumer businesses are fundamentally different but can be incredibly complementary and powerful together.
- If you set it up correctly, have intentional partnerships, and manage those partnerships well, you are guaranteed to be profitable in wholesale.
- How does your role change as a leader in an organization that goes through the growing process of a wholesale brand?
The Pressure of Growth: An Unfair Outcome?:
- Away CEO Steph Corey recently stepped down as CEO after an investigative article revealed a toxic work environment.
- Corey took Away from $0 to $150 million in just three years, which puts her in the same category as Bill Gates, Steve Jobs, and Elon Musk when adjusted for inflation.
- While her behavior is not condoned, the unbelievable pace at which Away has grown is a breeding ground for aggressive behavior, but her male peers were not asked to step down.
- Do you think this outcome was merited, and if not, what do you think would have been a better solution?
Brands Mentioned in this Episode:
As always: We want to hear what our listeners think! How can you make the most out of your strategic partnerships to take your wholesale business to the next level?
Have any questions or comments about the show? You can reach out to us at firstname.lastname@example.org or any of our social channels; we love hearing from our listeners!
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