The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - 006: How I Make $250k/Month Selling Weighted Blankets Online

Episode Date: September 8, 2023

Hey there! Grab a comfy seat and settle in because you're about to hear the story behind Luna, the business that's all about getting you the best sleep of your life. Robin, one of the brains behind it all, is here to share the nitty-gritty details, the ups, the downs, and everything in between. So, let's jump right in and see how a personal struggle turned into a booming business that's all about comfort and good vibes. 

Welcome to Startup Gems. We find undiscovered startup growth hacks, stories, and case studies from every random nook and cranny of the internet. Whether you're a seasoned entrepreneur, an aspiring startup enthusiast, or simply someone seeking inspiration, startup gems is your source for the stories that ignite the flames of innovation. Let's dive in. Episode 6. How I Make 250K per month selling weighted blankets online. Hey there. grab a comfy seat and settle in because you're about to hear the real deal story behind Luna, the business that's all about getting you the best sleep of your life.

Robin, one of the brains behind it all, is here to share the nitty-gritty details, the ups, the downs, and everything in between. So let's jump right in and see how a personal struggle turned into a booming business that's all about comfort and good vibes. I'm Robin, one of the people behind the creation of the Luna weighted blanket, a business that blossomed from a personal need into a venture that is now hitting 250 grand in monthly revenue. It all started in December 2017, and we are based in New York with a small but dedicated team of four people, including my co-founder and me. My journey began in Dallas, where I grew up

before moving to the East Coast to attend Cornell for college. After graduation, I ventured into the realms of real estate and finance, eventually landing a role at a hedge fund in New York City. However, the high-pressure environment took a toll on my mental well-being, leading to sleepless nights filled with anxiety and stress. In my quest for a solution, I stumbled upon research on weighted blankets, a concept dating back to the 90s. The studies highlighted the potential of these blankets in reducing anxiety and improving sleep quality. I decided to give it a try, and to my surprise, it worked wonders,

not only helping me sleep better, but also providing a sense of relaxation during my awake hours. As I delve deeper, I realized that a significant portion of Americans were grappling with sleep and stress issues, just like me. This realization ignited a spark in me to help others find the solace I found through weighted blankets. Despite the demanding job at the hedge fund, I couldn't shake off the idea of starting a business centered around this product that had brought me so much relief. I knew that to make a real impact, I had to dedicate myself fully to this endeavor. Balancing a startup with a full-time job was challenging. and it led to some initial hiccups, including inventory shortages. However, the feedback from early customers, who shared heartfelt stories of how the Luna

blanket had positively affected their lives, fueled my determination to make this business work. The journey to creating the perfect weighted blanket wasn't easy. The options available at that time were either too expensive, ranging between 200 to 300 or had issues like poor stitching and breathability problems. I was determined to offer a high quality yet affordable solution. To bring my vision to life, I reached out to a family friend connected to the textile manufacturing industry. This connection was a gateway to finding the right person to craft the weighted blankets. Since it was a relatively new industry, there was no established guide on how to create one,

so we analyzed the existing designs and identified the areas that needed improvement, such as weight distribution and bead leakage. After several trials and errors, we developed a unique filling process that integrated the beads into the fabric, preventing them from shifting. We chose a fabric that redirected heat away from the body, enhancing comfort. The design also featured double stitching for increased durability and a multi-layered structure to prevent leakage. Moreover, we ensured the materials were ecotech certified, a standard higher than organic,

guaranteeing the absence of harmful chemicals in the production process. The design phase spanned several months, partly due to the long shipping times from China to the U.S. We believed in the importance of building a strong relationship with our manufacturers, which led us to visit them in person. This visit was not just about overseeing the production, but understanding their business operations and showing our commitment to working together. Our Chinese partners welcomed us warmly, giving us a tour of their facilities and introducing us to their CEO.

This visit highlighted the stark difference in business cultures between the U.S. and China, with the latter emphasizing building real relationships. It was a fruitful visit that laid a strong foundation for our partnership. Returning from China, we were eager to kickstart our business. We placed an initial order of about 500 blankets using our savings to fund this venture. We chose to launch Luna exclusively on Amazon, leveraging its vast market reach and facilities like storage and payment processing to quickly establish our presence. Amazon not only facilitated easy entry into the market, but also allowed us to focus on

optimizing our listing with SEO descriptions, high-quality photos, and competitive pricing. At that time, the market was dominated by Chinese sellers with subpar listings. Being an American brand, we saw an opportunity to stand out with a more relatable and quality presentation. When our shipment arrived, the weighted blanket trend was at its peak, and our sales soared. To further boost our visibility, we reached out to various press outlets and bloggers, a strategy that landed us features in notable publications like Healthline and Men's Journal, despite a low response rate from the over 400 journalists we contacted. We learned the importance of tailoring our pitches to suit the interests of different publications.

For Lifestyle Magazines, we focused on presenting stories that would resonate with their audience, while for entrepreneurial platforms we highlighted the innovative aspect of our product. crafting engaging and relatable subject lines for our emails was a key part of grabbing journalists' attention. Our efforts paid off, helping us carve out a space in a competitive market and connect with customers who genuinely appreciated our product. The warm and heartfelt emails from satisfied customers, sharing their improved sleep experiences, became the most rewarding part of our Luna journey. Since our launch, Amazon has remained our primary revenue source, with a significant portion of our marketing budget allocated to Amazon ads. We structured our campaigns into three categories, automatic, research, and high-performing to optimize keyword usage, and reach potential customers effectively. Initially, we set a daily budget of $30 for our automatic campaign to identify potential keywords.

Over time, we refined our strategy, focusing on keywords that demonstrated high click-through rates and favorable advertising cost of sales, ACOS metrics. This meticulous approach helped us pinpoint the most productive keywords, which we then incorporated into our high-performing campaign. The journey has been incredibly rewarding, especially when we receive heartfelt messages from customers sharing how the Luna Blanket has transformed their sleep experiences. Hearing from individuals who have found relief from anxiety and depression through our product has been the most fulfilling aspect of our business. Fast forward to today, we have fostered a strong relationship with our manufacturer, increasing our order quantities tenfold and enjoying close to 40% margins. Despite the substantial growth, we are still striving to meet the high demand on Amazon,

constantly placing larger orders to keep up. To facilitate this growth, we have partnered with financing companies like KickPay and ClearBank, to manage the cash flow challenges posed by Amazon's payout schedule. Looking ahead, we are excited to expand our product range to include more blanket sizes and other sleep-related products, evolving from a product to a brand with a broader offering. Our advertising strategy primarily revolves around Amazon-sponsored product and brand ads, which currently account for about 10% of our monthly revenue. While we find certain types of ads to be quite expensive,

we have identified product display ads as a cost-effective option thanks to their low advertising cost of sales, ACOS. As we stand, 90% of our sales come from Amazon and the remaining 10% from our website. We are eager to drive more traffic to our website through various channels, including Google, Facebook, and Instagram ads, as well as collaborations with influencers and complementary brands. We are particularly excited about a forthcoming partnership

with a subscription box focused on sleep, a venture that promises to be very fruitful. Reflecting on our journey, one of the critical lessons we've learned is the vital role of inventory planning and management. Balancing the inventory to avoid overstocking or understocking has been a delicate task, more so with the manufacturing and shipping dynamics involving China. We've learned to anticipate potential delays due to Chinese holidays, and to factor in the seasonal spikes in freight costs and Amazon storage fees, communication with our Chinese manufacturers has been crucial. We learned to remain vigilant, ensuring that any changes they made did not adversely affect us. For instance, a change in packaging size once resulted in higher fees on Amazon, a lesson that

taught us to always be on our toes. We also realized the importance of quality over cost. Initially tempted by lower prices offered by other manufacturers, we decided to conduct test orders to assess the true quality of the products. This exercise revealed that the attractive samples often did not reflect the actual quality, guiding us to choose a manufacturer who met our quality standards. We adopted a proactive approach with our manufacturers,

even suggesting the possibility of inspections during production to ensure high standards. It was essential to maintain precise counts of the goods being shipped, not 499 or 501, but exactly 500 cartons, to avoid complications with the manifest discrepancy report, a document necessary for the release of goods in the U.S. This meticulous attention to detail saved us from potential penalties and seizures of our goods.

We learned this the hard way experiencing several shipment discrepancies with our first supplier, which led to significant delays and lost sales. It was a stern reminder to always verify the quantity of goods being shipped. Managing a business with just two people meant relying heavily on external platforms for various operational aspects, including inventory planning and payment processing. Tools like inventory planner, Shopify, Flexport, Kickpay, and QuickBooks have been invaluable in helping us streamline our processes, especially during the high-demand holiday season. Throughout this journey, I found inspiration and guidance in the book, Shoe Dog, by Phil Knight. It not only motivated me to take the plunge into entrepreneurship, but also offered a deeper understanding of the business world. It's a book I'd recommend to anyone harboring dreams of starting their own business.

Looking back, the most significant takeaway from this adventure has been the realization of the importance of creating a product that addresses a genuine need and offers healthy, sustainable margins. It's a principle that has guided us in Luna's journey, helping us carve out a niche in a competitive market. To aspiring entrepreneurs, my advice is to focus on products that fulfill essential needs and offer healthy margins to stand strong in the competitive market. It's about finding that perfect balance between meeting a need and ensuring business sustainability. There are countless opportunities out there. It's all about finding the one that aligns with these principles. And there you have it, the roller coaster ride of bringing Luna to life. It's more than just a business. It's a dream come true. A solution to a problem many of us face nightly. Robin and the team took a simple idea, helping people sleep better, and ran with it,

learning heaps along the way. If you're thinking of starting something of your own, take a leaf out of Luna's book, be passionate, be dedicated, and most importantly, be ready to learn and adapt. Thanks for hanging with us on this journey. Remember, the sky's the limit when you're chasing dreams with heart and hustle. Thanks for joining us on this journey through the world of startups and innovation. We hope you've uncovered some valuable gems. to fuel your entrepreneurial spirit. Don't forget to tune in next time for another inspiring story

that will keep your entrepreneurial fire burning. Until then, keep exploring, keep innovating, and keep shining bright with startup gems.