Money Rehab with Nicole Lapin - Who Broke the Supply Chain?

Episode Date: July 27, 2022

We’ve heard a lot about the supply chain over the last year. But, what is it, why is it so mad, and how can Money Rehab producer Mike get his body wash? For a deep dive on the supply chain, Nicole is joined by Olive & June founder and our #wcw Sarah Gibson Tuttle.  To learn more about Olive & June, read here: https://oliveandjune.com/ 

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. The cold lappin'. Okay, so let's clear something up.

We've heard a lot about the supply chain over the last year. I mean, if we were playing a drinking game where we took a shot every single time someone said supply chain delays, we'd be blackout drunk right now, right? single time someone said supply chain delays, we'd be blackout drunk right now, right? But even though we've heard the terminology, do we actually understand the terminology? I mean, WTF is the supply chain anyway, and how did it get so screwed up? To answer all of these questions with me, I'm bringing on an entrepreneur who has had to think her way through the supply chain many times, Sarah Gibson Tuttle, who founded the amazing company Olive & June, known for their at-home mani kits.

And not only does she decode the supply chain for us, she also tackles a supply chain issue our producer Mike was having himself. Yes, you will hear SGT put Mike through supply chain rehab. Let's get into it. Sarah, welcome to Money Rehab. Thank you for having me. I'm happy to be here. For listeners who might be new to your story, can you describe your company, Olive & June, and give a little background of how and why you started the company? Absolutely. So Olive & June was really started and concepted around being the new type of

neighborhood nail salon, we really wanted to elevate the nail salon experience into this experience where you felt like you could not only have a million bottles of polish on the wall that you were choosing from, but also have all of your preferences on file, including by the way, your credit card. So you didn't have to mess up your nails on the way out by fishing around for your credit card to pay. Yeah, absolutely. And what I realized when I opened Olive in June is that when people have their nails done, they feel so good about themselves. They feel like they can take on the world. They are ready for that job interview or that first date or just have fun with their friends that weekend, whatever it is,

or like a holiday. And so if you can give that to people on a daily, you know, daily, weekly basis, more often than they can afford to go into a salon, then they're able to have that feeling all the time. And so I basically was like, if I could bottle the olive in June feeling and give it to everyone everywhere, I would. And then I realized that like, if I could bottle the Olive in June feeling and give it to everyone everywhere, I would. And then I realized that I could do that. You can. Yes.

And so that's when we launched our product line and really thought about how do we actually serve millions of people versus the thousands of people that we were seeing in our salons in LA. But it really started on this new type of neighborhood nail salon experience that we wanted to give. And once we realized how that was making people feel, the brand just exploded around that mission of Beautiful Nails for Everyone. So you could bottle it. In 2019, you expanded the company by launching an at-home product line. So the idea for that came from what exactly? It really started because our

customers and our clients and our followers on Instagram were asking for it. And at first, when people said, oh, you should have your own nail polish, I kind of laughed because I think there's a lot of bottles of nail polish in the world and there didn't need to be another. Even though I thought I could probably make a formula that really would last longer. I had these ideas of things I could do, but I just felt like there's enough options in the market. And we were carrying over 10 brands of polish in the salon. So I was incredibly familiar with what was being offered. But what I realized was I was getting all these inbounds. And what I realized was when I took a step back for the first time ever and looked at the market, it will shock everyone to know that I did no deep dive. I basically just did like, oh, I love dry bar and I want to do a dry bar for nails. And so I'm going to do this

concept and then I just did it. So it wasn't like a business plan or any sort of real thoughtful financial model that I put together to say like, this is a great idea. But when I thought about the product line, the salons obviously were successful. We had three salons in LA. And so it was a bigger risk, I guess you could say, to say like, we're going to have a product line. So what I did is I looked at the market. And what I realized is that actually no brand was really serving the DIY consumer. And that's why the DIY consumer was totally lost in the space and why, frankly, most of

the consumers in nails were either going to the salon a couple of times a year and doing it themselves a couple of times a year. And then they were stopping because they were like, this is kind of hard and I don't... I feel like I can't do it. And so then Lightbulb went off and said, Oh, I just need to create a mani system. I need to create a system like a box that has everything you need to do your nails at home so it looks like a salon professional manicure. And then that will solve everyone's problems. And so that's really where it started. And we talked at FounderMate at a conference. I was moderating a panel that you were on. And

on that panel, we talked a lot about supply chain issues, which dovetails nicely to what we just talked about with your product line coming out in 2019. Can you just explain what the supply chain is for people who hear it a lot, but are really confused and are upset that they're not getting their products, but don't exactly understand what it is. Totally. So the supply chain is basically how you get your product. So when it gets made to when it gets to you, and I mean, technically, that's it, right? It's door to door. It's like from creation to it gets into your warehouse. And so all of those moving pieces that, so it gets made at the manufacturer, then it has to get packed and filled. Then it has to get shipped from wherever

it is to you. Then it's like on its way to you. Then it gets to your warehouse catalog, et cetera, and then put into your inventory system. So some people like some businesses, I, we don't do this. We work with a manufacturer that sources, but some people source their own ingredients. So they actually start prior to that. They started ingredient sourcing. And so we don't do that. We're involved with it, but our manufacturer spearheads it. So when somebody heard about these supply chain issues, that means that somewhere along the way, it was disrupted. Absolutely. And I think the reality is like when you ship something from Asia, right? When it comes to LA, it goes into the port. Well, the port is another

point of like, it gets to the port and then how does it get from the port to your warehouse? Well, there's been, as I'm sure everyone's seen all the memes on Instagram, there has been like a backlog at the port. So it's like at every point that it goes, there's a backlog because everyone is shipping so many things. And so many things are, are now being shipped, obviously, you know, air freight. So, and, and ocean, there's just so much more happening. And like, I think what people don't understand is that we have very little control over that, right? We can, We get information updates, but they'll say, oh, so today is July 12th, so we're recording this. They'll say it's due to arrive at the

port of July 12th. It will be released July 14th. Typical 48-hour turnaround, no props. We will build into our model July 17th, right? Because we know, who knows what's going to go on, right? And you never know, and there could be all kinds of reasons why, by the way, if it's on the boat coming over, there could be storms. Like, this is real stuff. Like, it's not like, it's like, you know, it's not, it's not like, it's like, it's not robotic. It's the world it's earth. It's science. It's weather. But so we'll say July 17th, July 25th will be going on. And we'll still be like, where is it? It's that kind of stuff where you're like, or it's July 12th. And it's like, oh, we've already released it. It's so wild. And so I think the consumers, and I understand the frustration 110%, they don't really care about our frustration

because like, that's not their job to care. And I do get it, but it's like, we have so little say. And then you could say, well, just make it in the U S well, do you want to, do you want to work polish? Like, it's like hard to figure out how to solve for things. And so as a small business too, like we don't have the money to throw around to have like, and you know, a different setup or our own manufacturer or manufacturing plan. So it's really, it's really wild how, how big the discrepancy can be of when you're supposed to get things delivered and when they come. And the reason there was so much chaos is because during the pandemic, a bunch of places shut down or had work from home orders.

And so there was little disruptions or issues along the way. Yes. And there was like 17 other issues. I think also labor is a huge issue. I think also certain things being sourced from certain parts of the world or being sourced more. And so lots more was coming in through the port versus coming in, in other where, in other places. I also think it was really chaotic, like for decades, this, this amount of products have been coming through in this way. And then

you change that where it's like, actually, you know, we're seeing it in target right now, right? Like we're target release numbers. And they said, beauty's booming. And there's some other things that are booming, but we're over, we were over inventoried in bicycles and TVs. And so the mix shift totally changed. And so then you, and now the mix shift has changed again. Now, luckily for all of in June, beauty continues to thrive. And we're a very small little, little piece of inventory. But the reality is, is that like, when you have a lot of TVs and a lot of bikes and people aren't buying that somewhere, it takes up a lot of space. And so that's different on the boat than if you had a ton of Olive and June nail polishes. So I think it's just being like a little bit,

I think if people can be a little bit generous with these, with our, with these companies, obviously my company too, but with other companies, cause like everyone is, and I, I used to dislike this phrase cause I felt like it didn't have enough oomph in it. I think it really actually is perfect. It's like, everyone is literally trying to do the best that they can and no one is out to get you. And nobody wants you to not have your ex that you've ordered. Because really I asked this question for our producer, Mike, who before you came on was really upset that he didn't receive his body wash. And we needed a full explanation because Mike is going on Tinder and it needs to just arrive already.

I understand Mike. And that body wash is probably having some seaweed sourcing issues. And we just need to be generous with that body wash. Only the best, only the best for Mike. Only the best for you, Mike. I'm very upset. It's been like almost a year since I've been able to have it. Wait,

what is the body wash? Uh, it's Jack black. It's the, um, I forget what it's called, but it's their, it's their like,

it's their black body wash. So it's like, uh, hold on, let me find it. Have you written the company yet? No, you should just email the company and be like, I'm, I'm obsessed. Is this just give me the, give me find it. Have you written the company yet? No. You should just email the company and be like, I'm obsessed.

Is this... Just give me the tea. Is it really coming back? Can I do that? I can just... Yeah. People email us all the time. We have a very robust customer experience team.

They're amazing. We get emails constantly. If you're nice... By the way, that's the thing. If you're nice, everybody's happy to help. Right. Okay. Maybe I will. Yeah. You should. Report back. if you're nice by the way that's the thing if you're nice everybody's happy to help right okay maybe i will yeah you should report back so they literally just sent me this i had it on auto replenish so it sent it to me every like month and a half or something like that and they always

send me an email and it'll like like today they sent me an email and they're just like like your your body uh wash is on the way and it it says like, charge $25, whatever. And then I'll get an email tomorrow that because of the supply chain, they're out of stock. You should 100% email and just find out. Are they sold anywhere? Is it like in a retailer? No.

By the way, I will tell you, there are reviews from May this year. It's like, where are they getting it? Mike, I'm going to solve this problem for you. I love this intervention. We're keeping this in, Mike. I usually do interventions with our guests, but yes, turn those tables, SGT. For today's tip, you can take straight to the bank. Mike, can you give us a body wash update, please? Well, folks, after months and months and months of being told by Jack Black that my auto replenish would not be resupplied because they don't have my body wash in stock, I was able to find it. And not only was I able to find it, I was able to find a very big bottle of it.

Larger than usual. How did I find it? Well, I had to go on Amazon. I didn't like to do it. It hurt my feelings to have to do it because I don't like to support Amazon. They don't need my money. I don't want to go through a middleman. I want to go right to the retailer, right to Jack Black.

But the retailer didn't have it. So I had to go to the middleman. So for today's tip, you can take straight to the bank. Reluctantly, I say, look on Amazon. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic,

and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.