Talking Business with Daymond John: Harlem Candle Company

Daymond John:

Hello everybody, I'm the shark Daymond John and today we're talking business.

(soft music)

I am Daymond John, the shark Daymond John and I have the honor and joy of speaking to Teri Johnson right now from Harlem Candle Company. I have the privilege of having one of these beautiful candles sent to me during the holiday from one of my people that work for me and she is the classiest woman in the world so she sends me the classiest gifts and this lived right up to that. How are you doing, Teri?

Teri Johnson:

I am so happy to be here and I'm really excited that you have one of my products. Whoever she is, she's awesome, tell her, thank you. (Teri laughs)

Daymond John:

Her name is Sherrie, yes, she's absolutely amazing. So why don't we just get right into this? I wanna hear your backstory about, you know, how you got started with Harlem Candle Company.

Teri Johnson:

So I have always been a huge consumer of luxury candles. I think I experienced my very first luxury candle at a photo shoot that I was doing maybe about 15 years ago and I was sold. I went out the next day and bought a really expensive candle, especially for me at that time and it just changed my life and I realized that that is my sort of affordable luxury. And it wasn't until, you know, years later where I met a chemist who had created fragrance oils for a bunch of different candle companies and worked on different perfume brands who told me, he's like, "Hey, you can make some candles if you want, I will make you some fragrance oils for you to experiment." And the rest is kind of history and I'm absolutely in love with history, the history of Harlem, the Harlem Renaissance, Josephine Baker, Billie Holiday. And I realized that I should carry the essence of these people on, carry the legacy on through, you know, fragrance. So I decided to call it the Harlem Candle Company and inspired by the Harlem Renaissance.

Daymond John:

Beautiful, beautiful. I remember my days of starting out, I used to love to just stand out there with my, couple of hats in my hand, right outside the Apollo. So thank you for bringing a lot of attention back to such a special place to so many people. So I'm here to hopefully give you some kind of information as a fellow business person, you know? We're trying to pivot during COVID and where do we go next? So let me know any challenges you're having, any questions you may have, and hopefully, I'll be able to give you some advice.

Teri Johnson:

Absolutely. So over the past year, my business has grown 400%. And...

Daymond John:

Nice.

Teri Johnson:

Yeah. I've really been able to sort of thrive during this pandemic because so many people are staying at home and we were able to pivot very quickly and focus and do a lot of online campaigns that focused on work from home, have beautiful scents while you're working from home and etc. So we were able to quickly pivot and focused direct to consumer, even though part of what we were gonna do is focus on all of these big retail stores. And we started doing a lot of Facebook and Instagram and Google advertising, and it worked. The biggest issue now is I am running this business pretty much by myself. I mean, I have someone who helps with social media… customer service. But when it comes to operations, I'm kind of the person doing it. All. And it's now become overwhelming. And I have looked on Indeed, I posted on LinkedIn trying to find someone who can help doing operations and some project management, but I haven't been successful.

Daymond John:

There's always going to be three things that are gonna be challenging in growing a business: sourcing. Then the sourcing of manufacturing, the sourcing of people, and the sourcing of capital. People tend to be either you can work virtually with people. I think we're going into a great time where one of the things that came out of the pandemic are there are so many highly skilled people that are working virtual. They either have left the job and they are looking to do something else, or they've just gained two hours a day round trip of travel that they can apply to something else. Because taking on the first employee is always challenging. And what you wanna always try to do when you take on the first employee is you wanna take on somebody that I believe can do your job. Reason being is if they are doing a poor job, then you know it's a poor job because it's your job. And if they're doing a great job, you've potentially found a rockstar that could do things much better than you so that you can move on and focus in various different areas. I do not believe in marrying anybody on the first date. I do believe there are, whether you're working virtually with a company and, or working with a third party or a person that comes to the company, I believe that there should be a three-month dating process. You are willing to invest this amount and they're willing to take the job at this amount, according to when they used to be at this amount. And there's two different ways to think about it. That is if somebody is coming to you saying, "I really want and I know I can add value," and you are already skeptical because it's your baby and you don't have real parents. So they will say, "If you really wanna prove what you can do, then take this amount instead of your normal. And by the way, I'm obviously risking and trusting you. And we will reevaluate that in three months, but here is what I am asking you."

Teri Johnson:

That's really great advice. Thank you. There has been a lot of demand for by-products in big retail stores: Nordstrom, Bloomingdale's, Macy's. And so we decided to launch in those three stores this year. However, our margins, our cost of goods is still relatively high for us to be on those shelves. But I felt that it was probably a good starting point. The purchase orders aren't that big. So I felt like it was at least a good starting point for us to give us experience. And hopefully, this can lead to much bigger purchase orders where we're able to then bring our cost of goods down because we're producing so much more. Do you think this was a good idea?

Daymond John:

It is a good idea. See, you know, what we call those are loss leaders. You know, that's a loss leader, you put the product because they have... a non... you know, they have a customer that is, you know, they have disposable income and they get to the most important part about your product. They get to smell it. And it's very hard for people to know if they like the fragrance online, right? They only know that I'm sure because you've had various amount of testimonies for people and it piqued other people's curiosity. But, you know, you do necessarily, you want to try to create a margin that is a healthy margin, 50% or greater. But you have to think about it on the other side, how much would you have paid for advertising? And being on in those stores is purely advertising. You just don't wanna take in purchase orders too large because then that might stifle your growth from a financial standpoint. What I would do is in a lot of times when retailers are doing really well, they're gonna ask you for more and more goods. Sometimes you have to hold them back because you know what you're capable of and you can only guarantee a certain amount of space so they actually also value you. But I do agree that you should still deal with those retailers as much as you can so that you get this amazing testimony. But as long as that product, once that is in the retailer when that person takes that product home, they know where to reach you directly so they can order again and order again and order again directly from you. And that's where you'll make the margin.

Teri Johnson:

Cool, okay. I'm really happy to hear that because we were literally getting those orders shipped to the distribution centers right now. So, and it's too late. So there's nothing I can do about it now. (Teri laughs)

Daymond John:

Absolutely, and sometimes they're not gonna necessarily increase the order size, they're gonna increase the doors you're in. And you want to be indoors where you feel very strong about it. And when we get back to some kind of normal, of course, you're gonna have to go out there and do trunk shows and various other boutiques and other things like that. It all depends on how much goods you're buying somebody. Something like a candle is really great because you can put those in boutiques that don't sell anything near competitive of your product. And you can put them there on consignment and just create your own business for yourself as well. Of course, that's a heavy cash outlay, but the margins are amazing. The store owner themselves go, "This is less cash that they need to put out." And this is also more inventory that they're able to move units with and upsell a current customer who's buying maybe shoes or champagne or whatever the case is. So I always look at those as great loss leaders, but at the end of the day, you wanna capture everybody you can on your site, you know, so you can make sure you talk directly to them for the life of their relationship with you.

Teri Johnson:

Yeah, awesome. Thank you. So I really love design and home decor, and we have some new products that we're going to launch within the Harlem Candle Company that are considered more home decor items. Now, my question to you is because I don't see the Harlem Candle Company as just being a candle company. I see it well beyond, and this goes into designs and prints and patterns and wallpaper and throw pillows and fabric that can really just be used to accentuate your home all inspired by the Harlem Renaissance. So I also own the Harlem Design Company and I work on that in my head, and, you know, when I'm... just, when I have, when I can't stop thinking about it. When do you think is a good time to kind of bring something small to market? And I'll show you, this is just one of the products from our new collection, which is also just very much a home decor piece, but it's also a candle. And so this is kind of what I wanna get into a little bit more. So, yeah, that's my question. When do you think I should maybe just try to get a little bit and let people know? And I mean, I know that, until my operations and my supply chain and all of those things are super, super tight, but I guess I just can't stop thinking about the decor. I wake up thinking about it every day.

Daymond John:

Yeah, excellent question. So this is the perfect time because what you can do is, you know, you have to think of your social media as a half an hour television show. If 28 minutes of your favorite half an hour television show with commercials, you're gonna switch the channel. But if 28 minutes of your favorite half an hour television show is what you're (inaudible) to show you how to cook or scare you or make you laugh or get you in shape. The two minutes that you're selling is when people can buy. So as you're sharing with people, what the Harlem Candle Company is doing, you should be showing the other things you're doing, showing people how they can make their own candles, how they can help, tricks and tips on how to help their decor. And obviously introducing the Harlem "Decor" Company or "Decoration" Company. I'm not sure what it is. You will then start to get testimonies of people going back and forth with you. And then you really can ask your customer. Your customer often knows you better than you know yourself and your customer may say, "Hey, when you're gonna put these in together?" You can ask them, make them feel like they're part of the process. "Hey, everyone, I've been sharing with you these latest tips. And I've been thinking about adding one or two pieces to my line for the holidays or for my special buyers who spend X amount. And I just want to do this or 50% off" or whatever the case is, and they'll start telling you, you want them to say, "Oh, I'm so glad that Teri allowed me to be part of this process. When do you have more?" And you'll start to get a gauge, but you do it slowly. And 'cause I can see, is it gonna be the Harlem Decor Company?

Teri Johnson:

The Harlem Design Company.

Daymond John:

Harlem Design Company, okay. So yeah, I can see that rolling and you starting to get that name out there, and then the Harlem Candle Company will be distributed by the Harlem Design Company so that now, of course, obviously the design will be the umbrella of everything. As your customers though, trust me. They know, and they're gonna be willing to tell you when it's time. And then they're also gonna be the first people and the ambassadors. We're gonna go out there and tell everybody about it.

Teri Johnson:

Oh, I love that, thank you. (Teri laughs) Because I don't talk about it, I just don't because I don't like to talk, I like to do. And then, yeah. So being able to get that advice and I love the idea of being able to kind of test it with my current customers. And if you were to look at our social media now, you'll see a lot of home decor. So I don't think it's gonna be a surprise to people

Daymond John:

Yeah.

Teri Johnson:

Because I feel--

Daymond John:

They're already invested in you. They are already invested in you. They already love your product. You are just giving them more information and they're feeling, you know, like more of a community and then they're feeling important.

Teri Johnson:

Thank you.

Daymond John:

You're welcome, so there you have it. Hopefully, I've given you a good amount of information on: number one, how do you go and source people as well as don't marry them on the first date, you know? Make sure that you share with them your expectations on what you expect from them and understand the expectations on what they are supposed to be doing for the company, and have a dating process and go through that. Also simultaneously, if you do not have the people to go out and help you source, start sourcing various other opportunities on who to work with so that you can, as your company grows, you can bring down your prices. And last but not least, be obsessed with your customers and share with them all the beautiful things you're doing and ask them for their advice. And they're gonna tell you the things they do like, and the things they don't like. But more importantly, they're gonna feel like they're part of the community and they're gonna go out there and be your biggest and best ambassadors, money cannot pay for that.

Teri Johnson:

Amazing, thank you so much. I really appreciate all of your incredible advice.

Daymond John:

You're welcome.

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