Learning How To Build A Brand Through Trial And Error

Hello! Who are you and what business did you start?

My name is Joseph Panetta and I started a fashion apparel brand called BohoWrapsody (www.bohowrapsody.com) based on a concept my mother created in Panama in 1968.

She bought a traditional south american wool poncho and adapted it. In the 60’s, women spent hours teasing their hair and my mother was no different. She could not imagine un-doing all that work by slipping a poncho over her head so she made a seam up the middle; created some joined fabric covered buttons to seal the opening and joined the corners to create a sleeve effect. The result was something no one had seen.

It dawned on me that this simple shape, rendered in a lighter fabric, could be a perfect beach accessory – or even a casual fall or winter “extra layer.”

At the end of last year, I was chatting with the co-founder of the wildly successful Skinny Tan self-tanner. She loved the concept and we set out to test receptivity on Facebook (this was meant to be a DTC brand only).

We reasoned that if we could get someone to click from our FB ad to our website for under 30 cents, we had a winner. Within 48 hours we were down to 17 cents. We had a winning concept – but NO PRODUCT. So we had to get it made – and fast.

We got it done. Made 1500 units. Generated TONS of traffic to the website, but sales have been super slow and we could not figure out why…..

So this is not a “success story” but it is a cautionary tale – read on to learn how we did everything RIGHT and what happened…..

What’s your backstory and how did you come up with the idea?

I first had this idea in 1996 – my wife at the time laughed at me for such a “silly concept.” The very next year, every woman on Manhattan’s Upper West Side was wearing a summer poncho. Had I acted when I had the notion, we’d have been in the right place at the right time.

Everyone loves their own idea. For this reason, we sought out people to poke holes in our concept – to break down the idea. We tested it with “ghost” product to see if it could work.

In short, we did everything right and still came up with a bad outcome.

Here I am in 2018 at 50 years old, a marketing consultant with deep experience marketing to women and no sustainable revenue stream. If I wasn’t working, I wasn’t earning. So I returned to the idea from 25 years ago and thought “why not?”

My recipe for success in my consulting business is to work backward from a clear vision of success; to reverse-engineer the pathway to get there. Creating my garment was no different – it needed to be lightweight; breathable; wrinkle-proof and easy to care for.

The goal was: I’m a 32-year-old woman on a beach. I want to go to the restaurant for lunch. No shirt, no shoes, no service. So I pull out my bohowrapsody, grab my hat and sandals and I’m off – from the beach to bar, elegantly & effortlessly. It was meant to offer women a bit of chic confidence.

Every factory we approached wanted to start with the fabric. My consistent refrain was it had to meet my criteria to be considered. I was working backward – they worked from fabric up. We had to get used to one another.

Enlisting Skinny Tan’s co-founder (who is a Facebook marketing & sales guru) was a matter of friendship and necessity. I needed a sounding board.

We modified the design – creating a monthly button subscription enabling customers to swap out the buttons for a different look.

Finally, my mother always said she never wanted to enter a room and see another woman wearing her dress or jewelry. To this end, we wanted to offer our customers the same kind of option – so we limited the runs to only 250 to 400 units each. We may make another white one but never THIS white one. This served two purposes: we could buy close-out fabrics and make as many units as that lot afforded us – and we turned a ‘negative’ into a scarcity selling point!

Take us through the process of designing, prototyping, and manufacturing your first product.

We agreed on the concept in early January. We hit the market with actual product to sell on April 27. My friends in the fashion industry struggled to understand how we could go from concept to market so quickly. Sometimes naivete is a beautiful thing – we didn’t know we couldn’t – so we just did it!

We had to produce locally in order to really participate in the process. Luckily there remains a healthy apparel manufacturing industry here in Los Angeles. After many interviews with multiple manufacturers and reps, we found one we like. We selected some fabric over-runs; cut a prototype; bought close-out buttons and hand-joined them.

It took roughly 2 months from soup to nuts. Downside – producing locally and in small quantities meant the COGs were much higher.

When my colleague received the prototypes, her 8-year-old daughter began showing us the many DIFFERENT ways it could be worn. Out of the minds of children…. What we thought was a simple beach cover-up turned into a 8-way multi-wear garment that transitioned beautifully from cover-up to sarong, to angel-sleeve top, to off-the shoulder top to headwrap to scarf. It was really this little girl’s creativity that established our USP.

Next we had to photograph them. Thankfully the beach is close. And equally thankfully, my nieces are swimwear models. So my mother’s idea – made by her son (me) is modelled by her grand-daughters. It’s a family business!

The shoot lasted 2 days and produced more than 600 quality shots with multiple settings. The site and Instagram and testimony to that shoot.

Sadly, we started off with the WRONG NAME. We were Posh Ponchos to begin. It was cute, rolled off the tongue – but the word PONCHO had downscale associations which we discovered too late. According to a number of women in our target demo, “Poncho” called to mid downscale wool cover-ups worn by Bolivian women in the Andes – there was nothing CHIC about PONCHO…. About a month after we went to market, we had to re-brand. If you can avoid this, do so at all costs. It is maddening and it cost us money and time.

Describe the process of launching the business.

I wanted to ensure that Skinny Tan’s co-founder had stake in the business – she was such a valuable advisor. She was also a UK national living in Australia.

You start with Plan A. You will need a Plan B if everything goes sideways. And beyond that, make a Plan C in case Plans A and B blow up. It happened to me.

This meant we could only go with a C-Corporation as it was the only configurations that allowed non resident shareholders. I enlisted an attorney and incorporated under a broader name to provide leeway for future brand development.

The process to establish the C-Corp was fairly routine.

Next came the logo – first Posh Ponchos logo, website, domain registration, social media account building – the works. I enlisted the graphic designer I had often collaborated with in my consulting business, Gabrielle Gewirtz or InsideWide. Then, we had to do it all over again mere weeks later when we rebranded. The ultimate look & feel was improved and no one had issues with the new name.

We started seeing traction in terms of website traffic quite quickly – but sales were slow.

Over Memorial Day weekend we had 8000 site visits and mere math would tell you we should have converted at least 1% to 3% – we converted exactly zero. Talk about a head-scratcher.

We adjusted pricing, created special offers & added value packages.

Nothing worked. It was not a price hurdle. Something else was happening and we could not figure out what!

We were firing on all cylinders

• AdWords: geo-targeted swim & swimsuit keywords to the “smile states” (CA, AZ, TX, FL, NC) at $1,000 per week;
• Affiliate program (via Share-a-Sale) enlisting fashion/style, travel & destination sites, blogs & newsletters;
• Outbound email marketing offering introductory discounts, added value in terms of buttons – laddering up to a BOGO
• Facebook – the bulk of our spend with promoted posts and pure ads – about 72 varieties changing ad copy, ad type, imagery and offers
• Instagram and Pintrest ads drove the most traction for the lowest cost.

Sales were sluggish, but we were new and felt success was just around the bend. Oddly, price was NOT a factor. There were no more sales at $39.95 than at $74.95

Since launch, what has worked to attract and retain customers?

Making the product was NOT the hard part. Marketing it was. Since BohoWrapsody was designed to be only a DTC brand, we used the roadmap that worked with the other brands we had sold on social platforms:

Facebook

Invested heavily (thousands) in Facebook The ads worked their magic – driving thousands to our site. We segmented lists, used interest-based and geo-targeting. It worked.

Website experience

Our Shopify site had very few apps so it ran quite smoothly. It was super easy to operate, to create various product combinations & offers and to play with pricing.

Instagram and Pinterest

Instagram and Pintrest (launch budget: $2,500) actually produced more traction for us in terms of actual traffic.

We were new to both platforms so we made mistakes, spent money in the wrong places and generally did not know what we were looking at. If you can get a pro to help you – do it. These were goldmines but we were ill-equipped to use them.

AdWords

AdWords started after a couple of months. I worked with Mary Gillis (M.K. Gillis Consulting: [email protected]) based in Toronto; she’s a seasoned expert. However, summer & swim is a super competitive season and the keywords are expensive. We decided to geo-target to keep costs lower.

Affiliate

Finally, I had worked with Rakuten as an affiliate platform before and I liked the set up. Also, I had seen how affiliates could provide a nice underpinning of sales.

I could not afford the $3,000 initial set up costs for Rakuten so we went with Share-a-Sale. The platform is awkward, tough to manage and managing affiliates is like herding cats. It has been a totally lackluster experience.

Partnerships

We approached a couple of brands to partner with us – offering units a GWP, etc. Few participated. We talked with Swimspiration; Everything Swimwear; and even some beauty sites.

The pitch was a high percentage of sales based on an outbound email or post (we’d do all fulfillment). We were offering high value/money b/c sales volume was the focus – not margin, at that time.

Influencers

We reached out to influencers – fashion influencers get paid a lot for posts. Cannabis influencers were much more open and friendly to work with.

Finally, we acquired a list and began outbound emails. Again, we got traction but little in terms of conversion.

Pricing

Our price point is $149.95 – began with an intro price of $74.99. We thought this was likely expensive for Amazon but a client put me in touch with the “new new” sales team and a lovely young woman encouraged us to list. We sought professional help to assemble the right listing content. We were encouraged to drip the price significantly – just to generate demand. We saw precious little in terms of results. We advertised heavily. We were ‘boosted’ from the inside. All to no avail. We took our listings down.

We attended Miami Swim Week with the idea of potentially selling to small boutiques or some online stores and doing drop shipping. This was an expensive participation – even though we shared the room, booth and presence with Lucy B’s Beauty (a cosmetics/toiletry brand). Spent roughly $7,000. Netted nearly nothing.

How are you doing today and what does the future look like?

We’re still trying to figure out what to do. We sunk a lot of money into inventory that is sitting in a warehouse. We spent more than that on marketing, advertising, Amazon listings, trade show participation. We are nowhere near breakeven let alone profitability.

The goal was to begin in the US then migrate as summer moves from the Northern hemisphere to the Southern Hemisphere.

Ultimately, we wanted to re-create the throw in various fabrics for different seasons in order to become more than just a 1-season brand.

We encountered headwinds that we knew nothing about:

1. FB changed the algorithm in the wake of the Cambridge Analytica scandal
2. GDPR took hold in Europe and email marketing got harder overnight worldwide – in the words of one ad-exec: “everyone is trying to figure out what to do.”
3. Despite our initial positive tests and the interest shown by clicking from the FB ad to the site, somehow no one was buying. This is still the single biggest mystery we have yet to crack.
4. Worked with discount site Zulily (owned by HSN) and we barely made sales.

Yes, we’ve sold a couple hundred units since April 2017. But nothing close to our potential.

Through starting the business, have you learned anything particularly helpful or advantageous?

Everyone loves their own idea. For this reason, we sought out people to poke holes in our concept – to break down the idea. We tested it with “ghost” product to see if it could work.

In short, we did everything right and still came up with a bad outcome.

I was naive to think that if we made the right moves, we’d succeed. We have not. While I am not ready to call it quits yet, I am seeking alternative ways to dispensing the inventory.

Since I produced all our goods locally in LA, my COGs is quite high. Frankly, it is maddeningly steep for what we are.

Specialty/high-end and ‘luxury” products do not fare well on social media platforms (maybe that’s why you do not see major prestige brands on them!)

I chose the right people to work with. We did the right things. We have not made a success out of it yet.

What platform/tools do you use for your business?

• Love Shopify
• MailChimp is super simple to operate
• Google Analytics was super instructive about the parts of our site that were sticky and those that were ignored.
• Spy Fu showed us what our competition was doing
• Advertising on Pinterest is not as straight-forward as other platforms but the results were superior.

What have been the most influential books, podcasts, or other resources?

Dot Com Secrets byRussell Brunson was really helpful – while it was written largely for services & software, the tenants of audience aggregation, pre-framing; character adoption, the use of similarweb.com to track competitive traction and all the checklists were fantastic.

Advice for other entrepreneurs who want to get started or are just starting out?

You start with Plan A. You will need a Plan B if everything goes sideways. And beyond that, make a Plan C in case Plans A and B blow up. It happened to me.

Ensure your sales channel is set up BEFORE you launch.

Set aside 2x more money than you think you will need. The idea that your item will take off and sales will deliver the revenue you need is a fallacy.

Stack the deck in your favor by mapping out each step of your plan with competitive intel, imagery – really visualize how your product will stand apart BEFORE you begin each phase.

Then keep checking in to ensure nothing has changed.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

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