Episode: 107
Title: Norman Farrar Introduces Yosef Martin, Founder of BoxyCharm, a Miami-based online subscription beauty service launched in 2013
Subtitle: “eCommerce Is The Next Sister Right Next To Subscription.”
Final Show Link: https://lunchwithnorm.com/episode-107-excelling-with-subscriptions-w-yosef-martin/
In this episode of Lunch With Norm…, Norman Farrar introduces Yosef Martin, Founder of BoxyCharm, a Miami-based online subscription beauty service launched in 2013.
Yosef grew BoxyCharm as a major disruptor in the online subscription beauty box industry as the first brand to deliver full-size products to members. In this episode, Yosef shares why subscription services are one of the best things you can do for your eCommerce business.
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Norman 0:01
Hey everybody, it’s Norman Farrar, a.k.a The Beard Guy here and welcome to another Lunch with Norm, The Rise of the Micro Brands.
Norman 0:14
Well, Kelsey, cut that off pretty quick. I don’t know what happened there. But he didn’t tell me though. His internet was gonna go off and on today cuz there’s some construction going on downstairs.
Kelsey 0:25
Yeah, that’s right. Sorry about that.
Norman 0:27
Is that why you screwed up?
Kelsey 0:29
That is correct. Yes.
Norman 0:31
Okay. All right. I was just wondering.
Kelsey 0:34
Pump the air. Yeah.
Norman 0:37
Okay, you’re gonna let me do my thing now? Okay, thank you. So today, we have a real treat. Yosef, a.k.a Joe Martin, CEO of BoxyCharm is going to be with us and we’re going to be talking about a unique vision as a CEO of BoxyCharm and what he did, how he disrupted the industry and just the overall brand. We’re going to talk about how he used influencers to boost up the brand and get it known. So Kelsey, anyway, how are you sir?
Kelsey 1:09
I’m doing fantastic and if you’re new to the show, please head over to our Facebook group. You can find it at Lunch with Norm Amazon FBA and eCommerce Collective. If you are messaging on Norm’s personal Facebook page, we cannot use your comments on the screen. But if you head over to the group, you can use them just like this. Hello, Marina. Welcome to the show and if you’re looking for any of the highlights, if you want to check out the full episodes, you can go over to our YouTube channel, Norman Farrar and that’s where all the content will go and I also want to mention, we have a special episode tomorrow as well. That’s right. We got four episodes this week. So make sure you come in at the same time as usual, 12 o’clock pm, and it’s going to have a special guest Tim Jordan and a panel actually of six people of six different sellers.
Norman 2:02
Oh my God. Why don’t you tell me about these things when this is supposed to happen? But anyways, okay, so let’s get into it. I just wanted to say a quick shout out to Faye, Marina, Yarrow, Andrew in China. Oh my gosh. You’re all over the world Andrew. I wonder if you got any tchotchkes or anything that you can, forget it. No, I’m not gonna ask. Anyways, Simon, Radd, Mark, Miro. Hi, everybody and again, if you have any questions during the show, throw them over to the right hand side and we’ll get to them and now just sit back, relax and enjoy the show. Welcome, Joe.
Yosef 2:42
How are you? Thank you for having me.
Norman 2:44
Hey, it’s my pleasure. I actually got to hear you last Friday on Serial Entrepreneurs in Clubhouse. You were with Colin Campbell and his group over there talking about your success.
Yosef 3:01
Yeah, I mean, they definitely made a difference. I’m so glad I joined Clubhouse. I recommend everyone that wants to try something different. Jump on Clubhouse, it’s an amazing group and Colin Campbell, I absolutely love his rooms. Whenever I see it, I try to jump on it. So
Norman 3:24
I wanted to just in case people don’t know a lot of people know a lot of the guests who come on because they’re Amazon sellers. But can you just give us a little bit of background about who you are?
Yosef 3:35
Sure. So my name is Joe Martin. My legal name is actually Yosef, but I think only Joe or Yosef and I opened a company called BoxyCharm, which is a monthly beauty subscription box. The concept started in 2013, but fully launched it in 2014. The concept is full size beauty items between skincare and color cosmetics, some tools, the idea that it’s 20 to $25 a month, and the retail value is always over $100 and plus if you walk into so for our auto department stores, and the idea was to pay the cost of goods to brands and lays the product in box intended to highly engage consumers. The consumers pay a fraction of the original price, get to try products so make them a better educated consumer tax surprise every month in the market, pretty much. The concept was driven a on the marketing side for use only an influencer marketing and we took off and we reach about 100 million in sales solely on influences marketing and then we obviously need to do some other forms of marketing, performance and so on but that was growing up until last year, which we grossed a little bit over 400 million in sales and by that time, our competitor they bought a piece of it and merged the rest which was Ipsy and combined. We have built a beautiful company called Beautiful Industries that has over 4 million active members that are buying our products and we’re the largest beauty subscription boxes globally or any subscription boxes globally. We’re only in the United States and Canada currently, but it’s a very exciting time for us. It is a day one. So yeah, that’s in a nutshell what I do.
Norman 5:28
Very good. Yeah. So I read a bit about your biography way before this, like Colin was actually talking to me. Yeah, you got to meet my buddy and talk about how successful and the way that you disrupted the industry as a whole. First of all, one of the things we talk a lot about brands here, and being able to, Kelsey, is it my mic? I’m getting some feedback on my mic. Sorry about that.
Kelsey 6:01
Yeah, I think, Joe, do you have a character phone?
Yosef 6:07
I do not have it on me. But if you want, I can mute while you speak. So that would be easier.
Norman 6:12
Okay, let’s try that. I’m not even sure if it’s that. It sounds like it’s Oh, there we go. It’s perfect. All right, Joe came up with the answers. All right. So let’s go back to the brand. What or how did you come up with this idea to build your brand?
Yosef 6:30
So I had a different company before I came to the US. Let me give a little background. I came to the US right after military service in Israel and went straight to school, I was an international student and I was trying to find a way to actually make some money and I had a couple 100 bucks and I launched my first company called Merchandize Liquidators. Without going into details, it was a wholesale liquidation company and the whole concept was literally driven by search engine optimization and I learned the whole concept and I did well, as a good business, I found that cabinet Color Cosmetics is literally the best, most profitable segment or category within that. The reason was, most of my competitors were male and they went to their comfort zone, which is electronics and so on perfumes, but no one was touching Color Cosmetics as much. So there was just much more supply than demand on our side. So when I would buy that I would buy makeup for pennies on the dollar and I would sell it with great profit. But it was great. So I grew that business, and mostly because of makeup and eventually anyone that wanted good deals on makeup would come to me anything you would type anything related to makeup, you would find one of my websites, I own plenty of domains, wholesalecosmetics.com and so anything, all roads lead to job at the end of the day. Around 2012, a different subscription box purchase from our sub product and I had a staff meeting every Friday and I would go over some upsells to Calico to learn about this and I saw that I sell a lot of some products and they asked about the buyer and they told me it’s a subscription box. They told me what it is and my first question was, how do they market themselves and they told me the concept. The concept was they get free stuff every month, if they can’t get free stuff, they’ll come to us. So that’s the deal. So I said, well, it’s kind of great. I mean, that concept is really good. You can’t really scale the business if you ask for anything. You can only scale so much by being gifted guidance. But then tell me so I asked him, How do you market themself and he said, it’s all social media. That was it. Okay, that’s good, that I can do. I know that one and that’s when I learned that the concept was Brian would give a free sample size product for a box with the hope that that’s going to go to highly engaged consumers that will come back and figure out I can totally disrupt it. If I go in with the box where I can have the economics to pay the cost of goods and manufacturing cost. Now, I will disrupt that particular space. By the way, why would anybody give away anything for free when I can come in and tell him I’ll pay for that. So instead of charging $10, I charge 21 at a time and the idea was to buy five items to pay the manufacturing costs, we do it full size not sample size, and then that’s how the whole disruption started within that space but indirectly obviously affected the beauty space as well because prior to that, people had to try everything that they weren’t able to try and they weren’t able to try an eyeshadow palette or so now they can go in and build a whole makeup collection for pennies on the dollar, literally. So they’ll have boxes and boxes of products and they will post it on social media for the makeup lovers and makeup enthusiasts. They will show how many items they have and it really disrupted the industry. So that’s literally how we started the business and that’s how we continue.
Norman 10:17
When you started, did you do it all yourself?
Yosef 10:21
Yeah, I mean, I started by myself, I mean, obviously I had people. Joe cannot respond to customer service. But if you refer to partners, I was self funding the business, my outer business was actually pretty good. It was pretty big. So I had warehouses and everything. So I put in my first initial investment, which was 500 grand, and it was paid off within the first 12 months or so, the rate of return profit right away. Eventually, I brought in partners and I didn’t need the partners, but it was secondary. So I didn’t need the cash on a balance sheet, I was able to cash a little bit and the risk a little bit and move on great partners called Riley and I will tell you that anyone that wants to work with them. I had great experience working with them and they helped me be a better CEO.
Norman 11:11
Very good. I went to actually Jeff sass. I don’t know if you know Jeff, but Jeff, and I were in New Orleans, speaking at sebata and I had no idea about the subscription box or the amount of subscription boxes there were. I think they were talking about 7000 different boxes at the time when we were talking, I don’t know how many there are now. How do you differentiate yourself between 7000, I thought there might have been 100. I don’t know, I’m an old guy. 7000 boxes, like, how do you differentiate?
Yosef 11:52
Well, the thing is, I wasn’t really thinking about a differentiation. Look, you have plenty of categories, so many of them would go into beauty and so on. But for me, it was very simple, get the best product in the box, get the right customer experience, make sure that the members get the maximum time and everything else with the best products out there. Give the brand the best marketing campaign for free and then last, but definitely not least are the influencers. Give them a high roller experience in the thing right there, make sure that they would love, they would be obsessed with BoxyCharm, don’t just do it for the transactional please and if you do those, it would be very easy for you to move forward and grow and eventually once you scale yourself more and more, with us, it was literally about the brand that coming into a box in the product curation and how can we build a better algorithm, to personalize truly personalize the product. Right. But once you have, say, hundreds of 1000s of units that you’re asking your brand to produce for you, they say well, why would they work with small quantities with plenty of little boxes into each project and invest the same amount of time when I can just work with BoxyCharm and do half a million or a million units at once and that’s it. So the gap that was created was in terms of the brands with the reputation, the ability to also procure products at a much lower cost because of quantity was there. So we were able to, for the same cost, produce a much better box with a much better value. Because we had the volume, we had the critical mass that we would produce and eventually you don’t have to worry about the entire market, you just have to focus on producing the best product and we had our formula and it kept enriching itself and that’s why it worked.
Norman 13:52
So you had to differentiate yourself against, BoxyCharm versus Birchbox. I think that’s the name of the company. How did you change? Like, what was the difference? What was the difference between you two, you’re both leading providers in the industry.
Yosef 14:10
Well, Birchbox obviously, they’re the the first movers, but they were not the leading going 2015 and it was no longer the major box and it was the major one after that and it was doing an amazing job, by the way and those are your partners. So I’m going to tell you I’m not biased, what I’m about to tell you, this is the truth. But they are amazing and I think they had an amazing team and the reason I liked the competition was because it gets you out of your comfort zone and it makes you think very creatively and that’s why I was able to scale my business. I needed that competition. Now, I understand the difference. Okay, one started about two years prior to BoxyCharm which is Ipsy and then Birchbox was and Ipsy was distinguished with BoxyCharm, because of the size of the product, right? They both had sample size, we were the ones with the full size. So our proposition was different. The other piece behind all this is that the way we work with products was a bit different. Where we would say, well, we have an eyeshadow palette, how can we train that palette. We would have an organized formula to trend our products prior to placing them in our box. So people would be educated about those products prior and they would come for the box because of the item and it was systematic already and by the end of the day, you don’t really have to worry too much about distinguishing yourself, even if they were going into full size, which you’ll see later on date. It’s because every box has different items, everyone has personalization and the best part behind all this, it’s not a winner takes all types of space. We have many members that have multiple subscriptions. So if your products are good, they’re gonna stick. If you can keep segment dicing the product for those members properly, where the question is, who, what and when? Who wants what and when do they need it? This is a very important part, right and based on that you did an algorithm so an eyeshadow palette can be great, but do they always need that particular time? Is it for winter time? Is it summer, when did they receive it last? Is it right for the consumer to receive an eyeshadow palette every month for the item once. All that had to be built with a very sophisticated algorithm that we built that keeps enriching itself and I think we’ve done one of the perhaps amazing jobs one of the best out there because retention speaks for itself. Otherwise, you would never grow to be over a million members in a full size space where they have to pay $25 or more in some cases about $35 bucks or $50 box. So that’s how you can tell where your segmentation is based on the who, what and when works.
Norman 17:02
That’s crazy, a million subscribers.
Yosef 17:06
Yeah, BoxyCharm. Ipsy had 3 million. So it’s completely different because one has sample size and had in phenomenal job to actually introduce sample size, that would be almost a full size format and they converted the industry into a place where people get to try everything before they want to buy and that was again, they had their algorithm, we had ours and I think combined it was a beautiful thing.
Norman 17:33
On the podcast, we talk about, we bring on people who specialize in influencer marketing. A lot of times we hear that people are looking at the nano or micro influencers. You went right to the top. I don’t know if you started out with nano or micro influencers, but at the end of the day you went celeb, 500 million plus or 5 million followers plus. So you worked with the Kardashians, right?
Yosef 18:02
Yeah, I do. I didn’t start with Kardashians. I came to the Kardashians when I was able to work with the Kardashians and the thing is look, today working with influences, it’s turning into a commodity in terms of people who want to work with them. At the time when we started, it wasn’t the same, people didn’t understand that. So you were able to see a few brands that are popping, and they’re doing amazing and influencers are lifting the brand while the influencer doesn’t just move revenue for you. It gives you the cool factor, it makes you famous. So if you understand that an influencer will legitimize your brand, your brand is a core factor, and there are literally a TV channel of their own don’t think of Instagram, think of their channel and you say, Well, I don’t care. What is your demographic? But if there are beauty buyers, I want them. Right? So we went everywhere. I think you have to understand that we worked with 1000s of influencers. Yes, we do have some celebrities that we work with. But we also work with nano. We go all the way through and years ago, we already created a long tail process where you start off with the mega ones, and then you follow through with everyone else. The idea is that the mega ones trend and they create a trend. They help create awareness on a very massive scale and they build up a funnel. Then when you go into the medium size influencers that already have a lot of input to advertisers, they’ll say well, I’ll talk about Boxy because they’re cool. It would make me look cool, it would make me look relatable and I just saw the other people that are much larger talking about them. So it’s definitely a thing I need to talk about them to even stay relevant and then from there on, it keeps trickling down all the way to our own members that would eventually post their pictures and then we’ll repost them as well. So it was a whole strategy to make sure that by the end of the day, everybody would want to talk about your product and it worked.
Norman 20:03
You built your entire business on influencers, right? That was your main marketing,
Yosef 20:09
It was one of the first stepping stones and we stayed true to it, we would not stop doing so. It’s definitely something I mean, we build a lot of relationships, great people out there and as we scale, so there’s many of the influencers and it was great to see how many of them became bigger than life in some cases, but they didn’t forget where they came from. So we have good friendships between us and I’m very fortunate to say that I was able to enter early enough, where people will actually answer your email because it wasn’t a thing for everybody, and we knew that it would be just a matter of time until the input is going to be so excessive that it’s going to have to go through management and so on. So I said, let’s enter this community now. Because anyone else that’s going to come through later on, it’s going to blow up that we don’t have a relationship with, we will have a relationship because we go to the same barbecues and we go to the same events and we see each other involve friends by the end of the day. So you’re always going to have the internet, I’m fortunate to say that many of them are good friends of mine forever for life.
Norman 21:14
Right and a lot of times when you’re building these influencers, you have to make sure that they line up with your brand as well, like you can have somebody who’s a gunslinger, it’s all about NRA, but you’ve got a very liberal type of view or product, and they just don’t match and I’m just using that as an example. Is there any advice that you can give? So Amazon and eCommerce sellers, there are new commercials or sorry, there’s new communities being built on Amazon called Amazon post and Amazon live. Are there any bits of advice that you could give to a new seller to get an influencer? How do you reach out to them? How do you grab not the Kardashians but the smaller influencers to make them brand ambassadors?
Yosef 22:11
Just contact them. That’s it. I mean, just go ahead and contact and contact everybody. How do you go if you meet someone on a personal level, you talk to them, right? You reach out to send an email and now if you enter into a point where they said okay, speak to my manager, talk to the manager if they said Hi, how are you? The smaller size influencers would be more approachable because they don’t get as many emails per day. But you know what, that’s to start, but always reached for the stars. Ask yourself, if I try now reaching it working with a particular influencer, if I try now, in a year from now, where am I gonna be? If I do, where am I gonna be in a year if I don’t try, right and the only barrier is yourself to stop yourself, go ahead and try and figure out and pivot from there, edit your approach. It really comes down to what your business is offering them. I’ll tell you one thing if you sell, say, and let’s just say world fitness products, right? You probably want to go to influencers first that actually talk about fitness, right? Maybe an influencer that’s in a different category and does hair most, it’s not going to be a person, right? She’s never been to a gym on her stories, it’s kind of the look off formula. So go for the ones that are more relatable, but then reach out galax skin, then if you want to know the way I was always doing this, I would look at those winners in your space, I would see the way they do it. If they haven’t used influencers, good for you, you’re gonna be the first. If they have done the influencer strategy and they’ve done this well, go to the ones they already reached out to because they already know the concept and it’s easier and then reach out for other ones and always think how can I do it better than them. You can learn about collabs, how they’re doing it in your space and so on and figure out ways that you don’t have to spend cash necessarily, you can collaborate with them with a percentage of sales over a particular product and you pick the right one and you know how to pick the right one because there is there is also a way to go and pick the right one or you want to pick the one that is trending right now, that have lots of friends that they come with an army of influencers to print on products. So you do a revenue split on that particular SKU and you make your brand more relatable, but you don’t have to worry about spending tens of 1000s of dollars for one post that doesn’t materialize. So that’s my two cents.
Norman 24:48
So we were talking about nano influencers, they’re generally they cost nothing, they’re zero to $100. What you said was pretty interesting. So collaborating with the influencer and doing a rev split, is that correct?
Yosef 25:06
Yeah. So in the beauty industry, there were quite a few events where brands will go and collaborate with an influencer of let’s say, a particular lipstick and the influencer would get a revenue share. I mean, every deal is different. I don’t want to say that that’s how it used to be, but it could perhaps be a revenue share, or so on and the influencers job is to make sure they sell as many as they can for lipstick. Right? So it was a very successful thing. I mean, I’ve seen less of those recently, but it is a thing, it works and the reason it works is because you say, Well, if I’m a midsize brand, say 10 million plus, I can afford buying X amount of units that would satisfy and a nice demand in which the influencers can get a percentage of the sales and make nice profit behind this and that’s going to be dirname on it, and they’re everything, but you also come up with their friends, or their friends of them, support them, and so on. But ultimately, for you, you only pay for that particular item, you’re not giving them a piece of your business. So that item brings lots of people to your site. Now you just collected lots of credit cards and now you collected all their emails and their names and you say, Okay, on my next event, there might be only my mind, I can go and send an email, they can introduce them. Now they found my brand now. So you get the brand popularity, the influential get their money, they’re happy about that, for any piece that they will sell forever for life on that SKU. But you do have an upside for that side of that, where you can ultimately build a whole list of emails and it works. Those members, they know already that they like products in that type, and so on. So you can segmentize, those members and build products for them.
Norman 26:51
I can guarantee you that everybody that’s selling on Amazon right now, their ears just perked up. Because when you get to own the client, or the customer, which Amazon does not allow you to do, and so that’s just a bonus.
Yosef 27:06
It’s definitely something that I always ask myself. Amazon is a different animal, right? So the members I would work with would all the department is the brand that would work with, always have their site and it was all around, I guess the Shopify experience or whatever. So that was in our case, and they would be happy when they would go and have a collaboration no matter why it would translate well.
Norman 27:31
Great. So at this point, we had a bit of an issue right at the beginning of the show, Kelsey had some Wi Fi things. We never got a chance to talk about this. So usually we have a giveaway during the episode. I am going to pay for the giveaway because I never had a chance to talk to you before this. But would you be open? If I purchased one of your BoxyCharm products and sent it off to one of our listeners in Canada or the US?
Yosef 27:58
That would be on me. Don’t worry about that.
Norman 27:59
Are you sure? Cuz I never talked to you about it. Yeah. Like we literally started at 12 o’clock. Okay, so guys, if you want to experience BoxyCharm, and just check it out, I think we’ll do #BoxyCharm. Tag two people and let’s get this thing rolling. Kelsey, also, if there’s any questions. Are there any questions for Joe?
Kelsey 28:29
So we just lost Joe. Oh, he’s back.
Norman 28:33
All right, good.
Yosef 28:35
I got kicked out.
Norman 28:36
Was it something I said?
Yosef 28:41
No, I read something by mistake and the whole thing went off.
Norman 28:44
Okay, very good. So Kelsey, are there any questions that are coming up?
Kelsey 28:50
Yes. So first off for the BoxyCharm. I’m guessing the US and Canada?
Yosef 28:57
I will send you a box and then you can send it anywhere. So we actually ship to Canada but yeah, you let me know.
Norman 29:04
Oh, great. Oh, and Alan’s back, by the way, around two o’clock in the morning right now. But he’s also saying that he’ll sponsor a prize for us today. So we’ll have two winners, one for BoxyCharm and one from Alan. So that’s fantastic. Anyways, #BoxyCharm and if you can tag two people, that would be fantastic.
Yosef 29:28
On hashtag it’s gonna be hard to see. It’s over here on Instagram, you’ll have a million people.
Norman 29:33
No, it’s just here. It’s just here. Yeah.
Kelsey 29:39
So we do have a couple of questions. Yep. So first off, any tips on how to build a great relationship with influencers? So I think you talked about how you reached out at the beginning, but is there any way to to actually foster that relationship?
Yosef 29:57
Well, yeah, I mean, look, if you have 1000s of influencers who do it, I can promise you, you won’t be able to build relationships with every single one of them. But you do need to build relationships with some of them. I can just tell you how BoxyCharm did this, right there is the company side where we throw lots of parties, a lot of parties and entertainment. I don’t know if you heard about the virus, we can’t do it anymore. But there is a virus going on. But we’re waiting for that to finish. But with all those years, that will have to be done. We even did an influencer trip where we went with him to Mexico and we actually had Coachella, the last Coachella, it was amazing. So that’s one thing. But from that I was there on all those trips, and we just stayed friends, I would go and call and meet with them. Those are my friends now when I go to LA and many of them are sitting in lay down. So we’ll grab dinners, and we just go to each other’s homes, and so on. So, by the end of the day, for me, it was as simple as just speaking to a person and talking in a natural way, as if I will talk to anybody. They work with you and that’s great. If they don’t, that’s great. You’re still going to be friends if you guys want to go and grab some drinks. So I wasn’t thinking transactional, put it out there, okay, it was more like, Look, let’s go out and grab a drink. If they want to work together, cool. If not, no problem, we’re still friends and eventually you build a relationship like that, that’s how it was. Just don’t go into it through an agency. If you want to build a relationship with them, do not go and just expect an email to be enough. When you’re in their hometown, just give them a call and tell them you want to grab a drink. That’s it. They’re worth your time. There are people, they’re cool. I mean, that’s what social, anything means. So pretty much as easy. It’s not rocket science, it’s as easy as just going to pick up the phone, if you can, once a while and talk to them, find out what their birthday is, send them something that would mean a lot because it’s thoughtful. So.
Norman 31:53
So you’re really building a relationship, taking them to Mexico, and I know I have a business partner in the chat agency and he has swim diapers. So it’s a seasonal product ad, it’s a tougher product. But he’s got a relationship with these influencers, that he’s building brand ambassadors, and over three months, they gave him 2000 photographs. One weekend, he said, Hey, I need you guys to highlight in a video so I can put it on Amazon live, these things. He got 30 just within a few days and it’s exactly like you said, so he’s doing it right. Okay, Paul, kudos, you’re doing it, right. He took before the virus, a group of the top influencers, took them out to lunch, brought them in for the day, and just spent it with him because they were doing so much for his brand. Like, I can estimate that one photo for him. We’re not talking about content, like written content, but one photo probably worth anywhere from 10 to $100, on a micro to nano base, you just take a look at that group that he got for 2000 photos in three months. That’s a ton of marketing for really nothing.
Yosef 33:19
Well, the thing that I always thought about was that, if you actually click with the influencers, and we’ll click together about that, to put all this aside, the revenue model, what you get is this actually deal with people that only want to do is stay relevant, and go viral and you sit down and you just talk to them about growth hacking tactics, and you’ll get smarter, they’ll get smarter. I mean, I’ll tell you that some of the best tips and tricks I had was from influencers will sit down and sell well, we found out that if you have an image and you post a story at the same time, one of them gets deprioritized by the algorithm. So you kind of have to, and they tell you the whole story, how to do it, and then how to do the hashtags right. Well, you first do the general hashtags, then you do the not very general hashtags, then you do very specific hashtags and it builds it up and builds relevancy and so on. If you find out all those stuff, then you’ll speak to another influencer and you can tell them well, I see a mistake you’re doing here. I heard over there that that needs to be done. So why don’t you try this one and see what happened when they do see the results, they can love it. So eventually, you’re building a powerhouse. So friends and all you do is talking about ideas, and we all get smarter by the end of the day and you don’t even think about the fact that okay, they’ll talk about you because we’re friends now but they actually are friends and we are all going together and we’ll call each other I just found out a new trick. Check it out. You have a whole army of people that all they do is find those tricks, and you just put them all together and that’s why I would say think about it bigger than the little revenue part is, it’s much more than that.
Norman 35:02
Right. So I got to tell you too, as you were talking, my wife came in and grabbed me a cup of coffee like she usually does at 12:30. But she also gave me, look at this everybody, a little mug with chocolates. Isn’t she great? She’s my best influencer by the way. My brand ambassador. Alright Kels, what’s the next one?
Kelsey 35:26
Okay. From Bronwyn. Who are BoxyCharm’s target market/avatars?
Yosef 35:37
Ah, you know what? I don’t really have one. I know that it’s a thing. In the corporate world, everyone’s asking that question and I’ve asked myself the same question and I can tell you that I don’t have one. If she’s into makeup, or beauty products. She’s in it. Okay, she can be Middle America. She can be Hispanic. She can be the glam girl that goes out and she wants to be seen through the skies with her very shiny highlighters. She can be the one that is a skincare enthusiast. I don’t really care. That’s why I segmentize my boxes. That’s why we have an algorithm to actually give you what works for you, when you ask yourself, but at the same time, I’m asking myself more what is the experience when you shop BoxyCharm? If you look at stores, department stores, and so on, what would it equate to when you think about the BoxyCharm? I’ll say well, we have all the mega brands. But we also have all the new brands that are coming out that can be extremely popular. So when you come over to BoxyCharm, it’s an understanding that you’re going to see, you’re going to find the diamonds under directors you haven’t heard of. But you’re also going to see the mainstream big brands that he always wanted to try those products, but they’re just out there, and he didn’t have a chance. So I’m always seeing this as an amusement park giving candies to the children and having the best rides out there and that’s going to be their experience and it’s very colorful with lots of colors and it’s chicken all the cool people are there and it’s always busy and you want to be there because that’s all the action is. So the brand wants to be there, the influencers want to talk about it and the members want to be there, because that’s where you get all the cool stuff and that’s how I see it instead of seeing the whole interview. Everyone has their favorite ride. Everyone has their favorite candy.
Norman 37:36
When you join BoxyCharms, do you go through a system of questions, so you can start building up that as our profile or whatever you want to call it? Yeah, okay, got it. A great idea. What about the how much time and effort did you put into building that customer experience?
Yosef 38:00
Years? Yeah, it’s been years in the making. The first few years, we didn’t even have that and I didn’t want to have a question here because I knew we’re not gonna be using that. The reason was, I needed to be critical mass on my purchasing site. So I figure until I have a couple 100,000 members, I won’t be able to drop the cost enough, so I can get the best deal. So I don’t want to go and put in a question. You’re over there. If I’m not here to actually segmentize, it wouldn’t be honest and we ended up in 2018 doing so adding a question here in educating our members. Now give us your question here, so we had that. We also have the reviews, once you receive the product, let us know what you think about the brand about the product or the category. So that can enrich the data and then we have another way that we do something else before we buy the product. So it’s multiple of about three to four different elements that help us enrich the data and personalize each member, knowing what to give them, who to give what and when.
Norman 39:05
What’s your favorite social media platform right now?
Yosef 39:09
On a personal level, Clubhouse. On the other one, I will say still, I’m kinda between Facebook and Instagram and you didn’t tell me Facebook after Yes, Facebook is a very strong platform and I think if you know Clubhouse, you’ll know that on Facebook, the most underrated feature is groups and forums, and they are extremely solid. I love Facebook for that reason. It is a very powerful platform and the member age group over there has much more desire to go there and look for something that they can buy. So they’re much more certainty for what’s out there.
Norman 39:52
Within the group?
Yosef 39:54
A new group as a member for all but then once you actually group them together, it is a very powerful combination.
Norman 40:03
Very good. Kels, next question.
Kelsey 40:06
Okay, I also want to add just a second. I just want to add that we have another giveaway today as well, we are getting sponsored by Brit Treats from Alan. So if you’re in the US, you can comment #Brit Treats, and you can win one of these delicious British chocolates that I can highly recommend. So #Brit Treats, US only for chocolates and if you want to tag two people and use the #BoxyCharm, you’ll be entered into the BoxyCharm giveaway too. Okay, next question. We have a couple coming in. So do you need to date the INF before asking for collaborative? Like, share comment before asking.
Yosef 41:00
I’m not sure I understand the question. What is INF?
Norman 41:04
I’m not sure either. Okay. I’m not sure who the Facebook user is.
Kelsey 41:10
It’s Brian.
Norman 41:12
Okay, Brian, you just give us some more insight on that?
Kelsey 41:17
Okay, so while we’re waiting for that, this is from Dr. Koz. What do you see are the best top funnels these days YouTube, Google, etc. Any advice at a high level?
Yosef 41:29
Well, they’re different. So think of it this way, right and color cosmetics for beauty. Okay, I can speak for that. Instagram can be very powerful if you have payoff with your product. If it’s an eyeshadow palette, a highlighter, you can do a short video where you can swatch the product and you can see the payoff right away. The resolution is good. Even the low res on stories is good enough to sell the product where you can see the payoff for the makeup and physique straight. If you’re looking at skincare, YouTube is more your jam because on YouTube, you will have a different experience with the influencer, they’ll be talking about themselves, you can relate to them a little bit more. So if someone said well, I always still have a breakout and I started using this particular product and so it really depends. I think you have to understand that this is not a one channel show. You have to go across, you have to do Facebook, Instagram, YouTube. Now, TikTok as well. In some cases, it’s very hard to grow or get revenues on TikTok until you find a way but the ones that you will see a better would experience what people got coming in shopping, I would say definitely Facebook. Right next to it is YouTube and then below that Instagram and much lower than that is TikTok.
Norman 42:59
Very interesting. Okay, Kels.
Kelsey 43:05
Okay, our next question from Radd. What other consumer products apart from makeup will work with the subscription model. So I guess any recommendations?
Yosef 43:17
There are plenty and you can actually check it online at tons of subscription boxes. I will tell anyone that goes into subscription, say don’t do it. Look, it’s extremely complex, there aren’t too many that grow to our size, right? There’s just literally a handful of us in the last 10 years, between us, Boxy, Ipsy, Stitch Fix lonely few of us, right and the reason it’s a complex business, as you grow, and you scale. The channel in the future, once you actually get into a scale, it gets complicated, because you have to have the manufacturers laid out for months in advance and it just, it’s very difficult and you have to prepare everything in advance and imagine you have to ship a million boxes, you have about two days, you have to wrap everything and ship everything down to many places that can actually perform that. Naturally, companies globally would be able to actually perform what you want to do. But let’s talk about subscription, you have two types, okay, the way to see it. Okay, when you have a subscription box, the replenishment and discovery. Replenishment, think of your Dollar Shave Club, okay? Or, I don’t know, some kind of medication that you need. It’s a replenishment, right? You might want to use hygiene, or subscription for that, right? So it’s a replenishment, they get it and so on. But no one’s going to snap a picture of that. Here are my campaigns I received for this month, no one usually would do it because they know what they’re about to receive here. My razors are received from this. No, nobody needs to talk about this because they know what to expect. On the discovery side, it’s more drawn where members are going to take a picture members are going to talk about that, especially when there is a revenue value behind this idea, if there is a value added, if you say, Well, if that’s my own brand, and I sell new in my own stuff, you might not open the box every time because there’s no true value, it’s their own brand. They can go and claim that it’s three times the value, it is what it is. But if I give you products that are already out there in the market, and they sell one item, sell more than double the entire box. Plus, for more items, the volume is over $150 in some cases, and only pay $25 and it’s a surprise, they’ll take pictures, they’ll talk about this, they’ll scream to the sky and what happened is the net promoter score changes now everyone is promoting you. It’s different so I went into that route not because I knew what I was getting into, I got lucky and later on I learned about space. So if you go to the other side, you have to make sure that it really helps you. If you go the other side it is going to be the replenishment part, it has to make sense it has to be cheaper than the Amazon store. It has to be an awesome experience you give it to them just in time to know that stuff, that can work too. But that’s just not my that’s a whole separate business in which I’m less experienced with. So that kind of could keep for you guys when it comes down to what to do and how to think about subscription.
Norman 46:17
All right, what’s the next question?
Kelsey 46:20
Okay, following up on Brian’s question, INF is an influencer. Do you just ask them to collaborate? Or do we need to like their page like posts, do comments over a short period of time then asked to collaborate? Date the influencer before asking for marriage? Hope that helps.
Yosef 46:39
I don’t really do it this way. I mean, I would tell you that we’re trying to simplify everything we’re doing we’re contacting influencers. We don’t ask him to engage in our post on the first day. That might be actually a pretty creative idea. But we haven’t done this. In our case, many of the influencers follow us as it is, commenting, but not all of them. We’re just trying to remove the friction and simplify the process. But I’m not saying that that’s not a bad idea. It’s actually a pretty good idea to kind of like warm up everybody into it and ensure that it’s more authentic. I would usually go if I actually work with celebrities or with other influencers we usually go, we meet, we take stories together so people can tell they’re looking, they know each other anyway, on a personal level. So it makes sense that they work together, but it’s only a handful of them and I can only do it on a personal level. So
Norman 47:35
Okay, what about who owns the images?
Yosef 47:41
The images that the influencers do, stay within them. At most, we’re going to repost and give them the credit. But it really comes down to who they are. In some cases, some influences allow us access to use their page. So there are different agreements.
Norman 48:01
Okay, now, one thing Kels just want to straighten something up here. I think when Alan did the #Brit chocolates he was talking about when I held up the mug with the chocolates in it. So everybody can even though you’ve got #Brit chocolates, it’s all for North America, or Canada or us. So we’ll just use BoxyCharm, and put everybody in. The first draw will be the BoxyCharm product, and then we’ll do the chocolates. So just to keep it all simple, like you just said, keeping things simple. Okay. All right. Any other questions?
Kelsey 48:37
Yeah, from Simon. I feel it keeps me connected to the team and keeps me grounded if I’m occasionally on the frontline.
Yosef 48:50
I’m sorry. So what stage do you step away? Oh, okay. That’s a great question. That’s a tough one. I think every company faced that, right? We grew fairly fast from 0 to 400 million in change in revenue too. But the biggest challenge I had was, and I guess the best way to put it is moving from flat organization in and or tearing your organization. Right? It was hard at first because I would be involved in many of the execution parts and I ran out of battery eventually and it was tough because it was hard to find a person that knows the technicalities and so on and can manage everyone and have the maturity to do so. So we ran through people eventually, I ended up hiring my first one. We hired a COO in 2017, the end of 2017 that came from eCom space and the way I’ve done this I will explain what happened. The question is around when do you let go right? You let go when you have the right people that you can hand over the torch to them knowing that they’ll do the job. The problem is you have to train some people, you have to actually code some people, you have to have the time to actually interview people and do so many parts in the hiring part that you have no time to do it, and you run into a predicament where you can’t do it. So the solution was hired from the top, hire from the top that 1% that he can manage all the hiring underneath, he can reorg the organization and give it a mid, like a short, mid and long term vision of how the org chart is going to look like and it’s someone that have done this, that have been in a small startup, and have scaled with the startup to a large size. So they have been through that road before you don’t want him to be theoretical. You want him to have the experience. You want them to have done this and eCom people. Now I understand subscriptions are different. But I couldn’t expect someone to been during the subscription. It was impossible. But eCom is the next sister right next to subscription, it would be very powerful. So that’s what we did and it was working.
Norman 51:06
Okay, yeah, that question always pops up where especially for you, you’ve got a hyper growth company. How do you cross the chasm? I mean, great book, but how do you handle going from nothing to 400 million in such a short period of time. There’s a learning curve and not everybody can just step in and be a CEO at that level. Did you have to question or have you ever questioned Wow, I need somebody to step in as a CEO and I step back?
Yosef 51:41
I had asked myself in the early stage, actually, when I was around 10 million in sales and I had but as I kept thinking about this, I was very clear that there aren’t too many companies that have done this attack scale. There’s perhaps two, and only one of them knows how to do it and he’s my competitor, which later on acquired BoxyCharm, and we roll over a piece and now he’s my partner and obviously, it’s on me. So I better figure it out. Because there’s no one else out there in my space. Okay, maybe in other spaces it is different. But what I would say is that, in my case, you can pick it up from Business School. It’s not something that you’re going to go and come from university ready to do. So you have to get down and dirty and figure it out from there and some are made for a product, some are not. It’s really it really is the way it is. I’m glad that I had all that experience. Because by the end of the day, you go through all these challenges, and you enjoy what you’re doing. You like to build things and you look back and you said I’ve evolved through the process. I’m not the same person I was when I started the business and I’m not going to be the same person in the next seven years to keep running this business. It’s not going to be the same, but you need to evolve and that evolution part is priceless and I would recommend everyone to at least try and give themselves a chance. Unless they find that, it’s not what I want to do and then bring someone else but give yourself that chance to actually scale with the business and figure it out.
Norman 53:14
What was your biggest mistake?
Yosef 53:21
Well, I would say I had many, by the way, tons of mistakes and if I had to sum it up, it will always come down to having the wrong people and keeping them too long. A person that was there, I knew it was wrong. I knew it’s not. It’s not right for the organization, right people but doesn’t always work and prolong what’s imminent and not learning from the previous mistake because you keep doing that emotional decision of trying to keep versus just let it go and move on. So that would be probably something that I would say.
Norman 54:05
Fantastic. Kels, we’ll take one more question.
Kelsey 54:10
Yep. I’m just gonna say we got,
Norman 54:12
By the way, Joe, you’re getting tons of fans here.
Kelsey 54:17
Okay. let me see.
Norman 54:22
Then we’ll go to the wheel of Kelsey.
Kelsey 54:25
Okay, so this is from Faye. So how do you get influencers to allow you to post it on Amazon or Instagram without paying high massive fees?
Yosef 54:35
I didn’t post anything on Amazon obviously. Yeah, look, like I said. In many cases, its relationship, I have a great team I want you to understand I do not manage influencers myself. For a while. I do have relationships with some of them that I’m friends with. But they do have a very small team, actually a very effective, very efficient, amazing group of three. That one couple 1000s of influencers, right and you know what, I think that put relationship aside, if your brand is cool, you’re gonna have more important influencers in which you’re going to be able to be more selective, who do you want to work with, for what price, that’s the bottom line. You just need to work on your cool factor all the time and be cool, it makes them cool, makes them relevant and eventually, you’re gonna get free mentions, just because you’re gonna be part of the conversation, part of everything that should be your focus, make sure that your conversation within them. So because you are part of that, if I’ll talk about the iPhone or Mercedes Benz or so on, it’s already so big and cool, whatever it is, and people are going to talk about that. influencers are not necessarily going to go in and contact them and say I just mentioned, I want my car, no one is doing that, right? You have to try, aspire yourself to be there. So you’re gonna be part of their conversation. That would be my suggestion.
Norman 56:03
Faye, one thing I can mention about the Amazon side of things, one way that you can do this, with people buying your product, so they get your product, we did this with our knives, where people would get them, they’d get the insert in right in the insert, it would say, there might be a contest, or there might be something going on, or it could just be, Hey, tag us using our product and they go ahead, they tag you, you get the notification, use an app like repost, you download the person’s image, and you can post it into Amazon posts, and it goes back and it’s giving them a recognition for it. So it’s a really simple process. That’s just one simple way that you can get people using your product, just by tagging you from the insert card. Okay, so I think, unless there’s some other stuff that just came through, but I know we’ve got a cut off at one o’clock. Is there? Is there anything there Kels? Or should we just get to the wheel?
Kelsey 57:14
Let’s see, this is just for Joe. Did Joe mention what he’s doing now, if he merged with this competitor, what’s the next best digital opportunity?
Yosef 57:28
Well, look, this is just the beginning for us and we both understand the potential. I think the biggest self actualization is seeing brands growing with your company and we’re only in 5% of the world population only in the US and Canada, we have the rest of the world to go and influence and many more things that are coming in. So bringing this together is exciting. I will say that the Western world, largest subscription, beauty subscription boxes in the world, both of us and the way I always said was two civilizations that had their own methodology of what they were doing, like one was the Egyptians building pyramids and then the other one was the Mayan and the Mayans building pyramids in Mexico, right? Everyone had their own methodology. No one ever knew how the other one does that now we’re just combining them together and it’s a beautiful thing. So now we’re just building bridges. We can build everything else.
Norman 58:22
That’s cool. All right. So let’s get over to the wheel. Okay and as Alan says, Good luck to everybody.
Kelsey 58:32
Yeah, sponsored by Brit Treats. Fantastic chocolates. Alright, so the first one will do for the BoxyCharm giveaway. So here we go. 321.
Norman 58:46
Brian.
Kelsey 58:57
Okay. Congratulations, Brian and number two. This is for the chocolate.
Norman 59:09
Olga. I think Olga just won the other day, too. She’s lucky. Olga, go out and get a lottery ticket. All right. So I think that’s about it for the end of the show. Joe, thank you. I know you’re a busy guy, and really appreciate you coming on.
Yosef 59:29
Thank you for having me. I really appreciate it. Thank you so much.
Norman 59:33
Hey, no problem. Alright, everybody. So that’s it for today’s show. Thanks for joining us today. We got a special episode tomorrow with Tim Jordan. He’s going to be coming on talking a little bit about mentoring and then on Friday, my buddy Kevin King, hopefully he’s out of the cold in Texas. But I think that’s it for today and once again, I wanted to thank Joe for coming on and giving us that giveaway and Alan, you’re awesome for providing us the other sponsored giveaway today. So, what do we have to do?
Kelsey 1:00:11
Let me just see. There was one question from Kitty and I’m not sure if you can answer it. But I think we get this question a lot. I think it’s a pretty important question. If someone uploads a picture of your product to social media and tags you? Is it okay to repost it without asking them?
Norman 1:00:28
I would probably reach out and ask them, just probably. A lot of the times when we’re doing it, like with the influencers, we will actually have them assigned something that we can if we’re allowed to, we do something a little bit different than what Joe is doing. We’re trying to build up Amazon brand ambassadors. So from influencer to brand ambassador, there’s one extra step, they sign an agreement with you that you’re allowed to use their product. I think as long as you and again, I’m not a lawyer, this is a big disclaimer. But as long as you acknowledge them, then I think it’s okay.
Kelsey 1:01:11
Yeah, I know it’s pretty common practice on Instagram to put the person’s handle in the caption, and then use a program like repost.
Norman 1:01:25
That’s what repost will do.
Kelsey 1:01:27
Yeah, it’ll make the little handle and so it gives the credit and then you can tag the person too, but yeah, I would always double check. Before you post anyone, like just get their consent first.
Norman 1:01:41
That’s it. We’re done. Kelsey.
Kelsey 1:01:43
We are. So yes, tune in tomorrow, we have a bonus episode. It’s gonna be great. It’s gonna be kind of like a roundtable panel about mentorship. So tune in for that. It’s going to be a great, great episode and as always, head over to our Facebook group, Lunch with Norm Amazon FBA & eCommerce Collective and if you just are missing the tail end of this episode, you can go over to our YouTube channel, Norman Farrar and that’s where all the highlights, everything is. Yes, and smash those like buttons. Ring the bell. Subscribe to us on YouTube. Anywhere, Instagram too. Norm has a great Instagram channel. There’s a lot of tips and advice too there. So yeah, and like this before you go, get those likes up there.
Norman 1:02:34
All right. Thank you, Kelsey. All right, everybody. Join us every Monday, Wednesday, tomorrow Thursday, and Friday noon, Eastern Standard Time and thank you for watching. Thank you for being part of the community. It’s awesome having you as part of this whole thing that’s starting to grow. Anyways, thank you. Kelsey, hit the music.
