Within the small business world, there is a lot of stigma attached to using overseas manufacturers. But while there are certainly some foreign manufacturing companies that employ questionable practices, there are just as many that produce high quality work, using both ethical materials and labor. In this episode, Gene Marks and Tiffany Ju, CEO and founder of Chunks, not only dispel the misconceptions about overseas manufacturers, but also offer sound advice on how to develop an effective working relationship with one.
Podcast Key Highlights
- Should I Have Any Concerns About Working With an Overseas Manufacturer?
- It’s really valuable to meet your overseas manufacturing partners in person just to humanize the relationship.
- Unless the politics of a particular country contradict the ideals of your brand, there’s really no reason to avoid doing business with manufacturers from that location, provided they do a good job.
- However, keep in mind that your manufacturing company’s home base may have policies that could impact your production costs or shipping schedules.
- Lastly, it is worth noting that certain countries may hold a monopoly on the production of specific products, which can limit your manufacturing options.
- Should I Have an Alternate or Backup Supplier?
- In the event that your shipping times are being negatively impacted, it can’t hurt to diversify your manufacturing factories, or even your products, to help sustain your business.
- As a small business owner, you need to keep your eye out for other companies that could potentially help your business grow.
- How Do I Handle My Payments With Overseas Manufacturers?
- Typically, overseas payments are made in U.S. dollars through wire transfers or reliable third party platforms, such as Alibaba.
- You usually need a larger, more well-established bank to help facilitate those overseas transactions.
- It’s a good idea to require your manufacturing companies to get a letter of credit to help substantiate your ability to pay them.
- Most manufacturing companies will request a partial deposit before they ship your products to you.
- For security purposes, you may want to begin with smaller orders that require lower payments and then, gradually increase both your order quantities and costs as you start to build more trust.
- What Are Some Drawbacks to Working With Overseas Manufacturers?
- Depending on how much product you’re ordering and how many clients these factories cater to, it can take anywhere between a few weeks to a few months to receive your orders.
- Occasionally, you may experience quality issues with your products and you need to be able to communicate your concerns to your manufacturers. It may also help to provide them with some quality control guidelines.
- To avoid losing money on any imperfect products, you may want to sell these products at a lower price or offer some form of discount.
- What Are The Most Effective Inventory Strategies For Ordering Overseas Products?
- Because it can take months to receive an order, it’s essential that you hire an operations director to help you forecast.
- The operations director will need to go through your sales history and use this data to predict how much of each product you’ll need to buy.
- Can You Still Promote Yourself as a Sustainable Business If You’re Working With an Overseas Manufacturer?
- The term “sustainable” can be a very difficult label to live up to since it essentially means that you are at zero carbon emissions and all your products are non-toxic and biodegradable. It’s more accurate to say that your business “strives to be sustainable.”
- Since manufacturing technology and procedures are often dictated by the different policies of each country, the location of your manufacturers will have a big impact on how environmentally friendly your business can be.
- How Can I Become a More Eco-Friendly Company?
- Make your products from environmentally-friendly materials
- Minimize the use of plastic in your product packaging
- Practice responsible manufacturing
- Partner with organizations that can help you conduct an ethical and environmental audit of your manufacturing practices
- What Do Small Business Owners Need to Know About Scaling?
- As you continue to expand your business, IP protection will become another important issue you’ll need to address.
- While word of mouth and social media can be effective forms of marketing, you will eventually need to invest in paid advertising to grow your brand.
- Bringing on outside investors will provide you with even more capital to foster the growth of your small business.
The views and opinions expressed on this podcast are for informational purposes only, and solely those of the podcast participants, contributors, and guests, and do not constitute an endorsement by or necessarily represent the views of The Hartford or its affiliates.
You’re listening to the Small Biz Ahead podcast, brought to you by The Hartford.
This podcast is brought to you by The Hartford. When the unexpected strikes, The Hartford strikes back for over 1 million small business customers with property, liability, and workers compensation insurance. Check out The Hartford’s small business insurance at TheHartford.com.
Gene: Hey, everybody! Welcome back to another episode of “The Hartford Small Biz Ahead” podcast. My name is Gene Marks, and we have, back with us, Tiffany Ju, because Tiffany, we never finished our conversation. We were gonna talk about Chunks and then we went into your whole story, which we’re gonna recap shortly, but I have a lot more questions to ask you, so I’m really, really grateful that you came back. Thanks for coming back.
Tiffany: Yeah, thanks for having me, Gene.
Gene: So, Tiffany, folks, just so you can recall and you can certainly watch our first episode where we spoke to Tiffany about her life leading up to Chunks. Chunks is her company. She’s the CEO and founder of the company. Tiffany, remind us all of what Chunks does.
Tiffany: Yes. We make really joyful, colorful hair accessories, specializing in hair clips and claws. They’re made out of acetate, which is actually a bioplastic, and it has a much shorter lifespan than conventional plastic. We also very much care about being proudly made in China and dispelling negative stereotypes around that. And just yeah, talking about responsible manufacturing.
Gene: Good. Okay, website is?
Gene: Great. You have a new podcast as well. Do you wanna tell us something about that?
Tiffany: Yeah, we’ve been doing the podcast now, I think we’re around 30 episodes, every week, yeah, but we recently just rebranded. It was called “The Clip Show,” we changed it to “Chunks Chats,” just because I feel like it should be very obvious and have Chunks in the name, and it’s exactly what we’re doing. We’re just chatting with Chunks. So-
Gene: That’s good. Okay.
Tiffany: So, yeah, it’s still kind of in its evolution. I feel like a podcast really finds their voice over a period of time. So, we’re in that evolution of finding our sweet spot. But a lot of it, a lot of the episodes are about growing a small business. There are a lot of interviews with other founders, and also just sharing about our journey growing the business.
Gene: That’s great, that’s great. It’s very similar to this. I mean, we like to talk with smart founders like yourself about the experiences that you got, you know, you’re having, and advice that you have, you know, for our audience as well. So, let’s get into this. So, first of all, okay, so just as a recap-
Gene: We have Tiffany Ju going to college at Parsons, graduating with a degree in fashion design, right? We have you starting an Etsy business all the way back in 2012, dying tights and other materials in your apartment in Atlanta, I believe, at first, right? And-
Gene: Terrifying all of your neighbors, because God know they didn’t know what you were doing in there, but it turns out you were just running an Etsy business, right?
Gene: Then you moved to Seattle, right? And then you wound down that business, you know, between like 2016 to 2018, and then you started Chunks in 2019, right? So, we’re-
Gene: That’s where we are.
Gene: And you have to find a manufacturer in China. So, let’s first talk about that. I just wanna, you know, refresh, we’ll overlap a little bit of what we talked about before, but I wanna just ask you about manufacturing in China itself. You haven’t visited your manufacturers yet, I think you had told me, but you were planning to, and is that still in the works? And give us an update on, you know, on your partners over in China.
Tiffany: Yeah, totally. Well, we actually just met them for the first time when they came to the States back in February. So, that was surprisingly helpful, even just to get some, you know, IRL, like, face-to-face time.
Tiffany: With the people making our products, it was surprisingly helpful. And, you know, they are our manufacturing partners, but they’re, you know, humans that we have a relationship with. So, I think it was really valuable on that level. I really want to go, maybe, like at the beginning of next year, after the holiday craziness, maybe after their, like, Chinese New Year.
Tiffany: So, yeah, by then I think things should be cleared enough, cleared up enough, like, the borders are opening, but I think it’s still gonna take a little bit of time to, like, see if everything’s okay still.
Gene: Fair enough. And do you have, you know, do you have any concerns about working with the Chinese manufacturer, given, you know, the environment that’s surround people? I mean, I have some clients that have reconsidering their relationships with Chinese companies just because it’s becoming more and more challenging, and they’re moving to, you know, India or you know, Vietnam, some other place where, you know, it’s a little bit less political. In all honesty, you’re running a business and you’re relying on suppliers from, you know, a country that sometimes, you know, we go up and down with relationships, with China. And I don’t know if that concerns you, if that, you know, is a risk for you and your, you know, for you and your business.
Tiffany: I mean, on a personal level, not so much. Politics doesn’t really come into play. I mean, I totally, I think there is a line where it does come into play. Like, there was kind of a controversy, probably last year, about cotton, about the region in China that produces cotton, was basically using slave labor of the Uyghur people. And so a lot of the companies like Nike and Zara were boycotting sourcing their cotton there.
Tiffany: And it was just this huge thing. So I think, like, when it gets to that point, yeah, you can take a political stance, right? But I think I really, I don’t see that kind of impeding, or being a problem in my particular business. I do always expect and maintain transparency in the relationship. And so, as long as I get that, then that’s something that I can work with.
Gene: Okay, that’s fine. Yeah, that’s fine. Yeah, I mean, and I guess what I was getting at as well is, you know, sometimes, you know, there’s tariffs are, you know, laid down or-
Gene: There could be a stoppage of trade in certain products, you know?
Gene: And these trade wars going on.
Gene: And I-
Tiffany: It is getting more expensive. Yeah, it’s getting more expensive to produce in China because China has become an economic power in the world now.
Tiffany: And because they went through, you know, such a revolutionary industrial period, their whole country has really been lifted up, and now it’s even harder to find cheap labor in China. So, prices are for sure going up, and then supply chain trend, like, for all the freight, costs are rough too. I think, like, you know. Sure, certain companies will definitely move just depending on the product and the industry that they’re in, wherever they can find that competitive market. For us, we’re still pretty committed to China because, I mean, really, honestly, that’s where hair clips are made. There are parts of Europe, I think, that still make hair accessories.
Tiffany: But they’re much more specialized. The price point won’t be the same. The quantity, the types of supplies that we use won’t be the same, so… So, yeah, it really depends on the product you’re making and the industry you’re in. There’s always, like, that tipping point-
Tiffany: And we just haven’t reached that.
Gene: Yeah. So, yeah. So, you’re answering my question. Because my next answer is gonna be about like, have you searched for alternate suppliers or somebody as a backup just in case something hits the fan and you have a problem getting supply from China. But from what I’m hearing from you is that, for your particular product, hair clips and accessories like that, China’s pretty much right now the only game in town. So, you gotta do what you gotta do. Am I saying that right?
Tiffany: It is the only game in town if we wanna produce, like, at our price point with the variety that we have, and it’s working for us now. I think the one snag that we’ve hit in the past year is that the number of factories that make our product is pretty limited.
Tiffany: Because pre-pandemic, it was a pretty small business. And then I think, I hopped on it in the beginning and then during the pandemic, and since then it’s really, really grown into a larger industry, and they haven’t been able to scale those types of factories as fast as it’s grown. So, our factories have gotten super, super busy. The turnaround times have just become much longer than they were in the beginning. And even, and I saw this happening and even like, a year and a half ago I was like, “Okay, we need to start diversifying our factories, possibly our products.” And that’s tricky too, because then, you know, there’s a lot of the, there you might find another factory, but then the supply chain is still really limited.
Tiffany: So… So yeah, that’s definitely a real pain point that we’re having at the moment.
Gene: That’s fair enough. And so would you say that you’re always on the lookout for other suppliers? You know, just, and is that lookout still primarily in China? Or do you have your eyes on any other countries?
Tiffany: I really like working with Asia and, for now- Yeah, I think I will definitely stick with China. I am always looking for, the next-
Gene: A better deal.
Tiffany: The next thing, the next product, the kind of next point of innovation that we can make. So, wherever that ends up taking us in the future, I’m down. I’m not, like, limiting myself to China. It really just depends on where I see the opportunity.
Gene: Okay. So, listen, your punishment for talking to me today is that I am an accountant, so I have, like, accounting questions and inventory questions to ask you, which is-
Gene: Which basically means that, like, 90% of our audience just switched off and just moved to a more fun, probably to one of our, like I go, Danny goes, videos to watch instead of this. But so, when you’re buying from China, how do you pay? Is it in dollars and who do you pay?
Tiffany: We pay usually through wire transfer in U.S. dollars or through Alibaba sometimes.
Gene: So, Alibaba has got a platform set up for buying and selling companies all around the world, but particularly Chinese companies. So, that’s an interesting way… So they, and they provide the payment capabilities for doing that.
Gene: Your wire transfer, which basically means, if you’re gonna do business with another country, I’m betting, and you don’t have to name the bank, but I’m betting that your bank is not a local community bank or credit. It’s probably a larger bank that can handle those kinds of transactions, correct?
Gene: Did you require or did your Chinese supplier, or did you require your Chinese supplier to get letters of credit at any time to, you know, to substantiate your ability to pay them?
Gene: Is that ever-
Tiffany: We didn’t. No, we’ve always been able to pay like whenever we needed to, so-
Gene: Okay. That’s fine.
Gene: Do you pay, and by the way, any of these questions you don’t wanna answer, by all means, you know, like, I’m not in position to. But do you pay upfront for products, or do you pay after they’ve been shipped?
Tiffany: Yeah, we usually pay 30% deposit and then the remainder before it ships.
Gene: Got it. Did you protect yourself in any way or did you just take that leap of faith the first time? You sign up with the supplier and you’re like, “Well, we require 30% upfront.” You’re like, “Oh my God, I’m sending all this money to some dude in China.” Like, I don’t know, when you freaking out about that?
Tiffany: Well, at first I was really just purchasing super small amounts, so-
Tiffany: You know? I was, 30% deposit was like 200 bucks. So .
Tiffany: Over that amount of time we’ve really been able to develop trust. I do remember at a certain point when my business was, like, exponentially growing, it was kind of scary sending, like, I remember when I was sending like 50 or $60,000 at a time to them and then I was like, “Ooh.”
Gene: I know. And because you do think in the end you’re like, “If these guys, you know, ran away with the money, what are you gonna do,” you know?
Gene: I mean, you know, between-
Tiffany: But at that point I did trust them, so…
Gene: Yeah, in the end it has to come down to that. How long does it take once you put that order in? How long does it take to turn the order around where you’re actually got the product in your hands? Is this like-
Tiffany: Yeah, that’s the part that has really changed over time because, when I first started working with them, they didn’t have much business. So, they were making samples within a week. The turnaround, I mean, we were ordering much lower quantities, but still they could make my 200-piece order in like a week, two weeks.
Tiffany: So it was really quick. But now we are ordering thousands of pieces, tens of thousands of pieces a month, and then it’s probably taking like three to four months now, turnaround, at the minimum.
Tiffany: So… And that’s not including the sampling. So, sampling is what also takes the longest amount of time, which it used to just take like a week or so, and now, I’ll get like one sample finished maybe in a month.
Tiffany: And then if I need to make another round of edits, then it’s like another month.
Tiffany: So then the whole process ends up being like six months.
Gene: And the samples itself, I mean, they are the kind of things like, because of what you said, you’ve gotta literally hold it in your hands. It’s not like they can send you a photo of it, right?
Gene: So, but it’s very small. If it’s a sample, it’s gotta be a very small quantity. So, I’m assuming they can, I mean, it just, it’ll get flown over as opposed to being shipped over. But even that takes a month to do, by the time they turn it around? And why is that, why has that changed so much since when you first started? Just because they’ve gotten busier as well?
Tiffany: They’ve gotten really busy. They’ve gotten really busy, and I think they’re really just stretched thin-
Tiffany: Trying to scale the business, and at the same time, like, maintain the level of service. Usually there’s, like, separate designers that just work on samples, or modeling, or converting, the client’s files into the CAD files, and I think they’re just short-staffed and I see that with all of our major-
Gene: All around the world.
Tiffany: Yeah, yeah.
Gene: It’s not just manufacturing. I mean, so, you know, my company, you know, we do technology services, you know, we do, like, CRM software. And so we outsource development. We have a great partner in Mexico, and it’s a couple young guys there, like in their 20s, they’re software developers, and they speak better English than me, you know? I mean, they’re awesome. And when they first started out, they were hungry and starting up their business, and they were awesome. This is very similar to your situation because then now because they’re good, they’re busier, and they’re growing, and they’ve got the same resource issues that your supplier. I guess the takeaway is, for people that are watching or listening to this, that if you’re gonna work with a partner, what are the domestic or, even more so overseas, if the partner’s good, good, that’s great, but just remember that because they’re good, they’re probably going to grow, and they’re gonna have the same growing pains that we’re having as well, you know? And we have to sort of accommodate that and build that in. We can’t, we can’t expect it to be, you know, you know, perfect all the time. And speaking of perfect, what about quality? I mean, after you approve a sample, then you place an order for I don’t know, 10,000 hair clips or whatever. And then do you ever get quality issues from any of-
Tiffany: Oh yeah. That’s a huge pain point too. And it has been, for forever, as long as I’ve-
Gene: How do you deal with it?
Tiffany: I mean, there’s no real, like, great 100% way to deal with it.
Tiffany: It’s more just-
Gene: Like no silver bullet.
Tiffany: Managing it.
Tiffany: But it happens because our product is primarily handmade.
Tiffany: And so it really depends, like, who’s on deck, who’s making the product that day for that shift.
Tiffany: And because the mechanics of a hair claw actually are, like, so subtle, and you would never think, because it seems like such a straightforward product, but-
Gene: You’re speaking to somebody who has absolutely no clue about a hair clips. You are looking at me right now, right? So, you can feel free to be as detailed as you want.
Tiffany: Yeah, I mean, but it is using, like, a spring or a lever mechanism.
Tiffany: So there’s a lot of subtleties in how that mechanism functions and, like, the angles. And so we’re talking like a matter of a millimeter can make a difference. And when it’s, like, being handmade, there’s a lot of room for variants with just tiny, tiny measurements. And so it’s something that they’re aware of too. And we just have to continue to, like, manage. And also we, it depends on the factory. We have three vendors now and there’s always, like, different issues with different vendors and-
Tiffany: So, we’re just constantly having to stay in touch. And I think that’s why the relationship building also is so important because you wanna be able to, like, have that strong relationship so that you feel free to communicate that kind of feedback with them in a way that doesn’t jeopardize the working relationship.
Tiffany: You know?
Gene: Of course. And who and has it been a point of contention, say you get shipped thousands of hair clips, and I’m assuming if one hair clip is bad, they’re all bad, right? I mean, if-
Tiffany: Not necessarily, sometimes it’s like we have problems, like, 10% of the batch.
Tiffany: Sometimes it’s 20%. Yeah.
Gene: What do you do financially about that? Do you, I mean, are you kind of hard on them to, you know, do you come back to ’em and say, “Well, I’m gonna short pay you,” or, you know, how-
Gene: How do you handle that?
Tiffany: I mean, that is part of what’s, like, one of our company values is that this is a handmade product, they’re not gonna be completely perfect. And like, I think our culture has this like, obsession with perfection and everything has to be just right.
Tiffany: But there is this variance in the way that these are made. Like, the material is handmade, the actual assembly is all hand-done. There’s gonna be variance. It doesn’t mean that it won’t work if something is just slightly off. So, basically what you’re… So what you’re saying though is that you’ll still sell it to the customer with that caveat, saying, “Listen, you’re buying a handmade product, and it still does, and it still looks great and all that, but it’s just, it’s never gonna be perfect as it’s handmade, or very rarely gonna be.”
Gene: Right, right.
Tiffany: And that we do.
Gene: Yeah, yeah. And we also, I mean, we definitely monitor the quality and we’ve created kind of a process for them to quality control.
Gene: So, once they make it, and throughout the process we check, we check that things are looking right, and then they do their own quality control, and then it comes to us and we do our own quality control. So, it goes like, through, like, three levels. We’re looking at it every step of the way, and there’s always this threshold of, like, of that fine line of when something is, like, perfect, and when something’s like imperfect.
Gene: But throughout the year we do, like, imperfect sales, and we’re actually starting to implement like a better, actual section on our website that are just where we put the imperfects.
Gene: Yeah. I mean that’s so different than a grocery store selling, dented cans of food.
Gene: You know what I mean? At a discount. So it’s the same kinda concept.
Gene: Inventory. Okay, I told you, sorry, this is accounting, and it’s, like, super important. But like you said, it takes, like, months to get an order of product. So, how do you forecast? For a company your size, how do you forecast?
Tiffany: Yeah, that’s a question for my ops director. I hired her basically to do the forecasting-
Gene: Right, right.
Tiffany: Is to go through our sell, like our inventory, and see how things are selling through, and kind of project between how much we think we’re gonna sell through. Like, what are our revenue goals, and how much we need to order to kind of meet that, you know? Somewhere in that space.
Gene: Sure. So, it’s all based on history, and then you’re making some assumptions of what your future sales are gonna be, and you gotta be looking out, saying, “Well, if we’re gonna be selling X amount of units in September and it’s May right now, we better be placing orders, you know?”
Gene: Pretty darn soon. So that we have this stuff in stock.
Gene: And the person that’s, you say you have, like, an office manager you’re saying? Or an office-
Tiffany: Operations director.
Gene: An operations director, okay. So, that is an operations director’s job. Sometimes a controller in a company does that, or an accounting person, but operations director is fine. I’m curious how much time does that operations director, do you think, spend on that, what must be a horrendous-looking spreadsheet, to make sure that things are being ordered within time. Do you know how much time do-
Tiffany: Yeah, it’s funny, I was just about to kinda talk to her about that, of like, “What’s your pile looking like these days?” But yeah, fortunately, I hired an operations director who loves a spreadsheet, so-
Gene: Right, right.
Tiffany: She loves to do, like, analysis, and spreadsheets, and pivot tables-
Gene: Well, I mean-
Tiffany: Which I don’t even know what that is.
Gene: Well, first of all you should and secondly, but do you think she’s spending a third of her time? I mean, I know you have to talk to her about that, but like, if you were to guess, what would you think it would be? I’m just, and the reason-
Tiffany: Just on inventory management?
Gene: Yeah, on inventory management. So, I’m just.
Tiffany: Eh, probably not that much, probably like 10%, only because she’s not only, like, our production kind of inventory manager, but she’s also HR. Like, I call her the ops director because she’s-
Gene: Yeah, she does everything-
Tiffany: This small of a business…
Tiffany: She does everything. So, she has a lot on her plate.
Gene: The reason why I ask you that, and I just wanna make sure that we’re clear for both, for our audience, is that, if you’re managing inventory at this level, and you’ve got overseas suppliers, and you’re dealing with these types of issues, somebody’s gotta take ownership of it. And you’re smart because, it’s not Tiffany, it’s not you, you shouldn’t be doing this, you know?
Gene: This is not, you’re the face of the company, and you’re thinking of the strategy, and the future, and the branding of the company, but the operational stuff is critical-
Gene: And you need to hire somebody to be responsible for that stuff-
Gene: It’s what you’ve done, because it’s that important. One thing that we really haven’t talked about, but I wanna make sure in just the last few minutes that we have this time, by the way, is sustainability. Okay? And I know that that’s, like, super important for you as a company. You hear a lot about people running sustainable companies or sustainable products, or whatever. What is that, some people really do it right, and some people, it’s just a bunch of words. I get the impression that you do it right. Tell me, what you mean by running a sustainable company, selling sustainable product. Why is it so important to you?
Tiffany: Okay, well, here’s the thing. I am not claiming that our business is sustainable. And that is a very high bar to set for your company because if you are running on, I think you can call yourself sustainable if you are at zero carbon emissions and whatever product you’re making, you can put it in the ground and it’ll like dissolve, and it won’t put any toxins into the ground. Which is basically, like, that’s very slim.
Gene: Yeah, I was gonna say, like, unless you’re selling water, you know what I mean? Like-
Tiffany: Even then, even then…
Gene: And even then, it’s in a plastic bottle, so they’re gonna be-
Tiffany: So I think there are very, very, very few companies or people who can make that statement that they’re sustainable.
Gene: But you strive, like, many companies, to be as sustainable as possible.
Tiffany: Yeah, yeah. We do talk about responsible manufacturing.
Tiffany: Because if we are going to create something, then we want to do it thoughtfully and consciously, you know? That feels good for us and… And yeah, we do try to do that with materials. At first for me it was about using better materials and minimizing plastic. So we do that in our packaging and just our products. And then, as I learned more about, like, production too, responsible manufacturing also expanded to then like, okay, what are the, like, ethical concerns there, you know?
Tiffany: Especially being made in China. Like, I get that. There should be, like, oversight there. So we did what we could with the auditing process and also partnering with organizations like Climate Neutral and 1% For The Planet, because obviously they just have the frameworks to responsibly manufacture, you know?
Gene: I agree. And isn’t it that, you know, making that commitment, it makes you be a better company. And then also it’s good to say it to the world and to the public, that you’re doing as much as you can to be that type of a company as well. Don’t you think that’s important for, you know, every business to do?
Tiffany: I mean, for sure, for sure. We are heading towards, we are in a climate crisis now.
Tiffany: So we all have to do our parts. I think we’re still, you know, in this kind of late capitalist culture where it’s still about the dollars.
Tiffany: I don’t think the existential threat has, like, really made its way into our psychology yet. And also, like just the evolution of like, technology and products, the innovation, it’s slow going.
Tiffany: Even if companies, like, really, really want to create sustainable products, the technology isn’t there yet-
Tiffany: Because there’s larger forces at play there, you know? There’s not quite that framework or incentives to create a more sustainable future yet.
Gene: That’s true.
Tiffany: I think that’s where, like policy really has to actually make a lot of progress because I think, in order to get there to a more sustainable future, we really have to incentivize people to do that. So, without an incentive, there’s just no motivation to, like, make progress or get better.
Gene: Yeah. I’m actually completely in agreement with you. It’s funny because in California they had passed a law last year about limiting the use of gas-powered engines for like weed cutters and lawnmowers and whatnot. And, there’s a lot of upheaval in the industry about that landscapers and people that do that, and there’s a period of time to transition over. But unless there’s policy, it’s very, very difficult to move people in that direction. So-
Gene: It’s not easy, but I agree with you, it is really important. So, Tiffany, so this, I mean, you’re doing great with this business. I, you know, I gotta ask you for between now and the rest of this, my final question. Like what do you wanna accomplish over the next five years with this business? Is this a business that you think you can see yourself still running five years from now? Or are you the type of business owner that says, “Yeah, I wanna get it to a, scale it to a certain level, and then sell it and move on to something else”? Like what goes through your mind?
Tiffany: Yeah, that’s definitely something that’s on my mind constantly.
Gene: I’m sure.
Tiffany: You know, I think CEOs, business owners, get a bad rep sometimes, but I think I have so much more respect for CEOs because I think a lot of people just see them as people who have big offices and big salaries, which they do.
Gene: By the way, I have to interrupt you. You sound like my wife. My wife started a nonprofit like three years ago. She was a school teacher for a number of years, you know? And now she’s running a business. She’s got payroll, she’s got all the headaches. She’s like, “People do not appreciate, you know”-
Gene: People that run companies enough,” you know?
Tiffany: It’s a lot of headaches, and you’re not doing the day-today work, of course, but the amount of, like risk. Just energy, and risk, and, like, vision that you have to carry to see the field clearly, and to decide to go in one direction or the other. It’s like, it’s a lot of weight to bear.
Gene: It is, and you do start to appreciate. I mean, maybe I can’t justify the gazillions that top CEOs make, but when you see, like, senior executives and companies that make their money, but they’re responsible for a lot of people’s lives and livelihoods…
Gene: And they make big decisions. You kinda start understanding why they get compensated at that level, you know?
Tiffany: Yeah, yeah. Totally. And it’s hard. I’m running, like, the teeny, tiniest baby company, and it’s hard for me.
Gene: Yeah. But nothing like cashing out and going surfing, that’s what it sounds like.
Tiffany: I wish. Yeah. So, I’m always kind of, you know, I’m just kinda. Kinda see how it evolves because I think at a certain point I have to kinda just be like, “Okay, I’m gonna just not force things,” because that is also my personality, and I think a lot of business owners would agree, of just like, I think we are a certain breed of people that are risk-takers.
Tiffany: Are probably impatient. Maybe a little prickly.
Tiffany: We want what we want when we want it.
Tiffany: And so, yeah, I very much bring that energy. Like I want things that happen faster than maybe they should, but then I also am the designer and the creative vision, which sometimes creative and the numbers, or creative and the ambitious growth can kind of go head-to-head. And so there’s a lot of opposing forces in my brain. And then also just, like, product, right? Because…
Tiffany: So interestingly enough, we’ve been putting a pitch deck together for the past couple months. I think my whole, my hang-up with raising capital was always like, “Who would give me money for hair clips?”
Gene: Oh, I wouldn’t, I wouldn’t agree with that. I wouldn’t agree with that.
Tiffany: Yeah, I know, I know. I got over that because I was like, “What am I talking about? I run a super profitable business, like”-
Gene: Yeah, no doubt.
Tiffany: It’s fine, it’s a great bet.
Tiffany: But at the same time, you know, like, I know kind of IP protection is a really important aspect of that, which we haven’t done so much. I feel like that is kinda a check against us because it’s really notoriously hard to patent in our industry. Like, anything fashion, accessory-related.
Gene: Yeah. Slightest little difference is then, it could be considered to be a new tech, you know, a new IP, you know?
Tiffany: Right. Yeah, and it’s not like we just have this one proprietary product-
Tiffany: Like fashion and accessories, you know, they, like, they’re always coming out, new seasons, new colors, new styles. So, it’s like notoriously hard and expensive, and it just wasn’t a route that I wanted to go ever. But I’m realizing how important that is, to kind of like, at a certain point, of wanting to scale your business, that is a huge consideration. So, I’m looking at that. I’m also looking at, okay, well, our brand, our strengths though, just like, me as the founder, as where we’re going to really, like, have the most value, is with the brand. Because we are a super creative, unique, community-oriented brand. And so let’s get our patenting capability, like, let’s get that up to a workable degree, see what we can do with that. But then also just make sure that our branding and our brand equity is, like, fire. So, we’re planning on self-funding, some paid advertising, because we haven’t, I mean, we’ve done like four, over 4 million with no paid ads, up until this point, but I think we can start kind of trying to expand our brand awareness through some paid advertising, and then doing a big website and brand, like refresh at the end of the year. So I think when we level up with the design patenting and the brand, the branding, and the product assortment, we’ll be in a really great place to raise, if we want.
Gene: Yep, yeah.
Tiffany: I’ve talked to some investors already, and there’s definitely been interest, and I think we could raise at this point, but I think we’ll be in a better position to do it next year. I also think that we’re, right now, in this weird time where there’s, like, all this hype around startups.
Tiffany: Like, it’s insane. It’s startup insanity right now.
Tiffany: And I think there’s, like, a lot of glamour around it. Like…
Tiffany: Oh, “Once you raised capital, you’ve won.” And that’s just like, that’s just not…
Gene: Completely the opposite of the case.
Gene: It’s like you’re-
Gene: Yeah. And like, be careful what you ask for, you just got it.
Tiffany: Yes. Exactly. Like, if anything, it’s just gonna golden handcuff you.
Gene: Yep. And then you’re bringing in third parties and other people into your business, and then they have so suddenly it’s other people’s money, you know?
Tiffany: Right, right. And especially as a creative, I want the freedom to run my business the way that I want to.
Gene: Of course, of course.
Tiffany: And I don’t want to have to. Yeah, I think raising money, it will deeply change the way that you run your business.
Gene: I agree.
Gene: Well, you’ve got a lot of decisions that you have gotta make this year.
Tiffany: Yeah, yeah.
Gene: My only advice to you is that, you know, when it stops being fun, that’s when you’re outta here, okay?
Gene: So just keep that in mind because it is, you’ve grown it, you’ve done an amazing job with it, but it’ll be a completely different business very, very soon, and you’ve gotta decide whether or not you’re up for that. Tiffany, thank you so much for all of your time. I’ve been speaking with Tiffany Ju. Tiffany is the CEO, co-founder, head of creator, chief bottle washer, at Chunks. And Tiffany, give us your website again.
Tiffany: It’s chunks.shop, and our handles on Instagram and TikTok are also @chunks.shop.
Gene: Fantastic. Your story is great and we’re gonna continue the adventure together. I love talking with you, and again, all other areas that we didn’t even talk about, employees, and labor, and attracting people, and getting the most out of them. We haven’t talked about financing, we haven’t talked about potentially bringing on investors. All in the future, I promise, okay? So, thank you very much. I appreciate your time that you’ve given us.
Tiffany: Yeah, thank you for having me, Gene.
Gene: It’s a lot of fun. Hey everybody, you’ve been watching and listening to “Hartford Small Biz Ahead” podcast. Hopefully you got some great information out of this conversation. I know I did. If you need tips or advice or help in running your business, please visit us at smallbizahead.com or sba.thehartford.com. My name is Gene Marks. Thanks again for joining us. We will see you again soon. Take care.
Download Our Free eBooks
- Ultimate Guide to Business Credit Cards: The Small Business Owner’s Handbook
- How to Keep Customers Coming Back for More—Customer Retention Strategies
- How to Safeguard Your Small Business From Data Breaches
- 21 Days to Be a More Productive Small Business Owner
- Opportunity Knocks: How to Find—and Pursue—a Business Idea That’s Right for You
- 99 New Small Business Ideas