“I started in our kitchen with batch sizes of possibly 20 deodorants on the stove,” she informed me. “The product become a business idea. So I kept the production in-house. I liked the controller, which was born from my love for making.”
Fast forward to 2020. Schmidt’s Naturals includes deodorants, soaps, and oral hygiene, among other products. Revenue is tens of millions of dollars. Unilever, the multinational consumer products conglomerate, bought the business in 2017.
I talked with Jaime Schmidt about launching, scaling, and promoting the company. What follows is our whole audio conversation along with a transcript, that has been edited for clarity and length.
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Eric Bandholz: What you have accomplished is indeed impressive. Give us a quick rundown.
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Jaime Schmidt: Schmidt’s led the charge from the shift towards organic products, especially in the deodorant area when we first came to market back in 2010. There were just a few organic brands — Tom’s of Maine, JASON, Nature’s Gate. But indie brands did not really exist. It was beautiful timing once I brought Schmidt’s to promote.
Part of this was intentional. I saw the chance that there was a need to shake up the space with new offerings. But a portion of it, also, was a little luck. I was on a search to find satisfaction in my job. I had tried all kinds of different career paths and side hustles and hobbies. Nothing happened to me until I landed on inventing natural products.
In Portland, Oregon, there was no lack of opportunity to choose your products to market and get in front of customers. It is an opportune city for it. That is what kickstarted Schmidt’s: face-to-face interactions with customers at farmers’ markets.
Bandholz: How long were you in farmers’ markets?
Schmidt: For about a year. Then I started treading into stores and taking on some internet, also.
Things happened fast. When I first started selling, I did not have much of a strategy for the enterprise. I knew I liked what I was doing. I understood that customers loved the item. They were telling me in the markets just how much the product had changed their lives. But I did not see the possible right away. After I was in retail, it became evident that there was a large demand for a new, natural deodorant that worked.
One of the frustrations around deodorants at the time was that the components. We had been on a path towards more clean, healthy products, but deodorant wasn’t quite there yet. Many deodorants were full of chemicals. A good deal of them were using aluminum as antiperspirants. There was an opportunity to do more.
Additionally, the branding choices on the shelves were cliché. The few naturals which did exist seemed the same, less or more. The scents were predictable with lavender. In general, a dull aesthetic.
I recognized the opportunity not simply to provide something that worked and was healthy, but also that looked different and was a bit more contemporary and forward-looking. I wanted naturals to be accessible to the masses.
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Bandholz: How can you get your foot in the door for the first merchant?
Schmidt: I’d retailers approach me in my booth at the farmers’ markets and state that clients were on the lookout for the brand from the shops. I was fortunate. A whole lot of these retail accounts dropped into my lap.
But after I saw the possibility, I immediately made retail portion of my everyday work, to reach out. I began going into local shops. I was a new mother. My son was a month or two old. I’d take him to the shops with me and pitch my merchandise.
There’s a good deal of opportunity in Portland with co-ops and organic grocery stores. After I had saturated the industry here, I made my way up to Seattle. The West Coast, the Pacific Northwest in general, was welcoming to this sort of product.
Then, within a couple of years, I had a national supply that performed organically. A whole lot of it was word of mouth. I had connected with a few bloggers early on who’d learned about Schmidt’s, wanted to test it, and then they talked about it.
This was when YouTube’s influence was powerful. It was an efficient way to spread the word about Schmidt’s that did not cost anything.
Bandholz: Was all this self-funded?
Schmidt: Schmidt’s was financed from my husband’s and my private bank account, which was small and humble. We’d been social workers before I started the business. He continued as a social worker for the first two or three years. We were mostly living from his salary.
I also had a few side hustles, also, which was the seed money for the small business. I had been making private label products for spas. I made do-it-yourself lotion kits for a local merchant. It was relevant to Schmidt’s and a wonderful way to get a little bit of extra cash that I could put back in the company.
Bandholz: Can you manufacture your product also?
Schmidt: Yes. That started in our kitchen at our very small home here in southeast Portland. I was beginning with batch sizes of possibly 20 deodorants on the cooker. That grew as demand increased.
My first warehouse was approximately two-and-a-half or three years after I had made my initial deodorant. It was around the corner from my home. I found a landlord who had been ready to work with me on flexible terms. We converted this old, beat up area into a centre where I could hire a few people, increase my batch sizes, and have daily USPS and UPS pickups.
Within four decades, we had three warehouse motions. The expansion was just absurd. And it tough to predict and understand much space we had.
Plus, we had gear needs — mixing machines at the melting pots and the tagging lines — and the demand for more assembly lines and transport departments. The next thing you know, we had 150 employees working across two shifts.
Bandholz: Why create it in-house versus working with contract manufacturers?
Schmidt: a great deal of brands begin with an idea, and then the first step is to locate a contract manufacturer to make it. But I began with the item, which turned into a business idea. So I kept fabricating in-house. I enjoyed the controller, which was born from my passion for making.
I enjoyed it. I enjoyed being close to the item, but it caused lots of stress. There is so much that could go wrong. It is amazing to look back and think I was running this complete manufacturing center with zero knowledge or experience going into it.
1 thing I loved about in-house production is you have as much control over things like limited-edition offerings. When you are working with contract manufacturers, the lead times are so important, and there is so much preparation involved. Whereas, if you are making in-house, then you can just pull off something so fast. There are huge advantages to both.
Bandholz: Were the limited editions to your merchants or your direct-to-consumer stations?
Schmidt: Mainly DTC. It was a excellent chance to maintain strong grip coming to our site once we’d widespread retail distribution. Once we’d found in places like Target, there is the concern that it is going to die off entirely. Having the limited edition scents was a excellent way to keep people coming into the website.
This was one part of our strategy. We needed to consider free shipping choices and regular promotions to maintain those stable online sales, also. But something about the limited edition aromas that worked out nicely for us was selling overstock at the end of the season. We had retailers like TJ Maxx that could buy out all that additional inventory. It was the perfect way to transition from the seasonal scents.
Bandholz: With these retailers, did you operate through agents or providers or directly with the business?
Schmidt: just a little bit of both. Some of the prior retailers we handled directly. As we climbed, bringing on agents assisted in navigating some of those connections and opening new doors. And distributors, also. Some retailers required that we work with a distributor. But partnering with a supplier had additional benefits, too, that opened doors that we otherwise would not have access to.
Our biggest battle was Amazon. I fought for the first couple of years. I didn’t want to market. But we lost control. People began selling Schmidt’s there, so I thought,”Well, if they are going to do it, I must do it, too.”
We had enormous revenues on Amazon. However, it was so tricky to handle the pricing and the quality of the posts and photographs people were using — and the packaging they were sending our products in.
Our turning point on Amazon was when I had a feature on Fox News, of all places. After I had been on TV, the Amazon sales exploded.
One of our ecommerce merchants that had been promoting Schmidt’s on her site started selling on Amazon after this Fox News feature. Then her earnings exploded. I wanted to keep up with it. I thought,”Dang, she is making bank only selling my new on Amazon because of the 1 TV feature. So I want to compete with this and have some tips around it.”
Bandholz: How can your earnings divided between direct-to-consumer and retail?
Schmidt: We’re probably about 70-percent retail and 30-percent ecommerce round the purchase time with Unilever.
Bandholz: You brought a spouse into the Company in 2015.
Schmidt: Yes. Michael Cammarata.
We were growing extremely fast. I wasn’t searching for any type of outside ventures, but I was approached by Michael and his business partner, Kevin Schmidt. (No relation.) Kevin had heard about Schmidt’s due to his last name. The two of them approached me and said they were interested in some type of collaboration.
We looked at a couple of distinct approaches to structure it. We landed a partnership. Then we worked together for a few years leading up to the acquisition.
Bandholz: Why bring in a spouse?
Schmidt: They convinced me. I was not searching. I had other men and women approach me, but I wasn’t searching for investment. The partnership opportunity was attractive to me since I wanted more than funds.
What Kevin and Michael introduced was accessibility to retailers that I had not yet explored. They had some plans around marketing I was interested in. It worked well. We had different skill sets, and collectively, we could keep on growing.
Bandholz: your business’s earnings was in the mid-eight amounts when Unilever acquired it.
Schmidt: It was a nine-figure acquisition.
Bandholz: Wow. Let us discuss the transition. You built and sold a company that shares your name. Do you fear the activities of the acquirer will tarnish the title?
Schmidt: Yes. But at exactly the exact same time, I discovered security in knowing that my name was on the brand since it’d be forever mine. The heritage could live on.
I trusted the group which was at Schmidt’s when the purchase happened. I must know Unilever nicely during our discussions. I knew for sure that they were the perfect partner for us, and I felt comfortable moving ahead. Butsure, it’s different once you’re no longer responsible for the daily operations. You hope that everyone’s going to make decisions that match your general long-term objectives and vision.
I have been happy with the way things have gone. I am still involved. I’m working as the newest spokesperson and will always be the creator and have a pleasant, wholesome relationship with the group.
Bandholz: Let’s dig into the sales process. How did you wind up with Unilever?
Schmidt: We had several businesses in the table. We caused by Goldman Sachs to help broker the deal. They were great for soliciting other possible buyers. We had four big companies which were interested. We were having discussions and meeting together. We narrowed it down to a few.
Unilever was a clear winner for me. Again, I knew their worth, their mission, and their vision for the brand. They had no intention of shaking up the group or doing things differently. They understood the value that Schmidt’s had assembled and the brand equity that we were bringing.
Bandholz: What were the firms interested in? Profitability? Distribution channels?
Schmidt: First off, they saw our earnings, what we’d accomplished, and what we had been on course to do. They wanted a bit of it. The biggest attraction was that Schmidt’s was a pure brand that they did not have in their portfolio. They had several deodorant brands and personal care goods, although not a natural one, with high performance and a cult client after.
We had a product roadmap, also. We had just started toothpastes and bar soaps and body washes, among other goods. All of it was appealing to Unilever.
Bandholz: Was selling the company your vision once you began in 2010?
Schmidt: No. I never envisioned the business growing as big as it did, and also promoting it. It was never my thinking. But in the future, as we continued to grow and the business took on a whole life out of me, I knew there was real potential in partnering with a company like Unilever, to continue to push us to expand internationally.
There was a massive load off my shoulders once the acquisition happened. I didn’t have to carry the weight of leading a company with 150 employees and being accountable for their livelihood and all of the challenges and dangers that come along with this.
I also looked forward to the next phase of my life. I didn’t understand what that looked like exactly, but I have since taken on new jobs that I am excited about. I’m ready to implement the knowledge that I learned from Schmidt’s and discuss it with others.
I am most excited about our investment finance, Shade , my husband Chris and I began. The focus is on consumer products. 1 thing which makes us unique is that we can provide hands-on experience along with capital. We also concentrate on underrepresented entrepreneurs. We see a demand for change and a excellent opportunity. So most of our investments are in women and people of colour.
I have also written a book. It is all about my journey of starting and developing Schmidt’s, with a great deal of concrete takeaways for entrepreneurs. It is called”Supermaker: Crafting Business on Your Own Terms.” It releases on September 8, 2020.
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