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Fostering Relationships is Your Secret Superpower with Sadie Scheffer - Honest Ecommerce Ep. 142

Sadie Scheffer is an artist, an MIT drop out, and an accidental baker who started her company, Bread SRSLY, in an effort to impress her college crush. 

10 years into being a CEO, Sadie is passionate about all things leadership including knowing when to break the rules, or make up your own. 

In This Conversation We Discuss: 

  • [00:00] Intro
  • [01:30] How Bread SRSLY was created
  • [02:33] Having a hobby business
  • [04:15] Getting bit by the entrepreneurship bug
  • [04:47] Challenges of starting a food brand
  • [06:29] Do you really have a business?
  • [07:11] You really need to delegate
  • [08:03] Things that Sadie can’t delegate
  • [08:41] Did Bread SRSLY start wholesale or DTC?
  • [11:06] Sadie’s wholesale hero
  • [12:11] Relationships are very important
  • [13:15] Reciprocity and fostering a community
  • [14:44] Sponsor: Electric Eye electriceye.io
  • [15:05] Sponsor: Mesa apps.shopify.com/mesa
  • [15:46] Sponsor: Rewind rewind.io/honest
  • [16:22] Sponsor: Gorgias gorgias.grsm.io/honest
  • [18:04] Sponsor: Klaviyo klaviyo.com/honest
  • [18:51] Early acquisition strategies vs now
  • [21:56] Does Bread SRSLY perform outbound calls?
  • [22:53] Getting direct customer feedback
  • [23:24] Pricing and bundling tips 
  • [25:38] More resource recommendations
  • [27:41] Create values as a guide, not a schtick
  • [28:55] Exercises to make your brand better
  • [29:37] You don’t have to always change something
  • [30:04] Sometimes, you have to just “good-enough” it
  • [30:37] Make your staff shine
  • [31:24] Delegate outcomes, not processes
  • [32:10] Where to buy Bread SRSLY

Resources:

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews! 

  Transcript:

Sadie Scheffer  

Price your products in a way that supports your business not in a way that tries to undercut the competition and wait for the funding to come in.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show. 

Hey everybody, welcome back to another episode of Honest Ecommerce. I feel like I haven't recorded one of these in a month. So this is going to be fun. 

Today, we're welcoming to this show, --A truly awesome story here that we're about to get into-- the founder of Bread SRSLY, Sadie Scheffer. How are you doing today?

Sadie Scheffer  

I'm so good. I'm excited to be here. Thanks for having me.

Chase Clymer  

Oh, we're gonna have a blast. And I'm gonna fake it till I make it. 

I feel like I've done this so many times that I just gotta get back in the groove. And then I'll remember what I'm doing. 

So bear with me on the “being a host” side of things. 

Sadie Scheffer  

You got it. 

Chase Clymer  

Awesome.  So you've got a pretty interesting story about the inception of the brand. And it has to do with MIT. So the floor is yours. How did the journey begin?

Sadie Scheffer  

The journey was circuitous. I like to call myself an accidental baker. So I went to MIT for undergrad, hated it, dropped out, and didn't know what to do next. 

So I decided to move to San Francisco because the person I had a crush on from school lived out here. And so I just thought that was my next journey. 

So I showed up. It wasn't mutual (laughs) which was really devastating and I didn't have any other plans. 

So I decided that if I made myself a little more interesting, maybe he'd be interested in me. 

And I knew that he was gluten intolerant. So I decided to learn how to cook and bake things that were gluten free. And that started a very quick obsession with cooking and baking.

It's still my ultimate hobby. Learned all the ins and outs of gluten-free ingredients, got really excited about bread, about fermentation, and Bread SRSLY went from there.

Sadie Scheffer  

So how long after learning to bake to impress a boy or a girl? Did it go into being a career, I guess, until being a startup, until launching an actual brand?

Sadie Scheffer  

It was 2 years from moving to San Francisco to launching Bread SRSLY, and about 9 months after launch to going full-time.

Chase Clymer  

And then how I guess when you were hit with his passion, did you see a hole in the market? What made you think that "Wait, maybe there's a business idea here?"

Sadie Scheffer  

Not at all, actually. I've always been a hobby business person, my whole family are business owners. Everybody's been self employed. I didn't even... 

I remember going to MIT, someone invited me to a career fair. And I was like, "Why would I go there? I'm going to be self-employed." 

It never even occurred to me to work for someone else which is weird. So this is actually my 4th hobby business. 

I've made t-shirts. and bike clothing. and accessories. and sold those before. And this was just another hobby business. 

So at the beginning, my goal was literally, I will sell bread to friends and family. And in exchange, they will give me money and I can use that money to buy ingredients so that I can keep refining the recipe for myself, for personal use, because it was really expensive, and I didn't have a lot of money. 

So it was at the point of selling to strangers and having word of mouth spreading that I was like, "Okay, this is different [from] the other businesses I've run."

Chase Clymer  

I think that entrepreneurship is definitely like once you get bit by it, there's no going away. I remember myself being "I'm never gonna have a real job." I think almost 10 years ago, maybe I [was] interviewed at an agency. 

They were one of the cooler ones in Columbus where I'm from and I didn't get the job. 

And I got some inside scoop through someone that I knew that knew someone higher up there and they're like, "Yeah, that guy was gonna quit 6 months later and start his own business." 

And I was like, "Well, I guess I'll just do it now." (laughs) So that's what I did. 

Sadie Scheffer  

I love that. 

Chase Clymer  

So let's talk about starting a consumer packaged goods brand, starting a bread brand. I feel like there's just some hurdles that come inherently with anything you can eat. 

There's the FDA, there's all sorts of crazy stuff. So what were some of the things that you had to learn on the way?

Sadie Scheffer  

Oh my goodness. There's so many. I would say at the beginning, my first big "aha" moment was... In the beginning, I wanted to bake everything myself and hire someone to run the business. 

And so the first big change was flipping that and realizing I never wanted to bake anything, again  for sale. 

But I was really excited about the numbers and the business structure and things like that. 

So that was like... That was one year in 2012, which was a very fortunate transition for me. That's when I started hiring a team. 

First, it was hiring production team members. And then it was hiring, marketing, and then operations, and then sales, then HR. So that was a good one. 

I would say, like, my least favorite stuff is the admin. So all of the food safety paperwork... Food safety is cool. I like that stuff. But the paperwork is very dry and boring. 

But it's like a little blip in all of the things we do in a year, it accounts for a fraction of a percent of the work. 

It's not that bad. It's not that scary, if you know your food safety and you know that you're putting out safe products. And that stuff's fun and technical and interesting. 

So it's not for anyone who's intimidated by that stuff. It's relatively small scope.

Chase Clymer  

Yeah, I just think it's really important what you said there. You quickly realize that you had to flip the script on. Turning it from maybe like a hobby that pays into an actual business. 

You have to get out of the business. You can't really do it anymore. And hiring trustworthy people to kind of run the business for you is the only way to actually build a true business. 

I know a lot of people that build jobs for themselves, if that makes sense. 

But until you actually replace yourself in the process, until you can go on vacation for a week and things don't implode, you don't really have a business. You just have a job. 

So that's something I really want to highlight: During that startup phase, having to get that mindset shift of delegation and getting stuff off your plate. 

Because the tasks that are going to make it a successful business cannot be second to producing products ever. So it's something that's really worth highlighting there.

Sadie Scheffer  

Yeah. And it's an ongoing journey. Our business just turned 10 last week, and I'm still definitely working in the business. 

I'm acting Operations Manager right now and have been for the last year. So that's probably the next big hiring hurdle for me stepping back out of it. 

I've been in it, I've been out of it. I'm back in it. I assume it will be a forever tug of war.

Chase Clymer  

Yeah, There are certain things that I think that some founders are like, you know, like, I know, I shouldn't do this, but I really like it and I'm gonna keep doing it. Is there anything that is still on your radar that you're like, "I don't know if we'll ever let this go."

Sadie Scheffer  

My personal passion is leadership. 

And so while I have an amazing HR manager, who's also very skilled and passionate about leadership, I feel like I'm still holding the reins there in terms of company culture and leadership training for people. 

And so that when I feel like it's gonna be heartbreaking to let it go, but probably definitely the best thing.

Chase Clymer  

Awesome. So I think with another thing with consumer packaged goods and just getting into that entire space is... There's this whole... 

D2C for consumables and for the stuff that you'd find on shelves at the grocery store is the probably the most youngest part of direct-to-consumer, now that economies of scale and shipping makes a lot more sense. 

So when you guys first launched the business, was it a wholesale play at first or was it always direct-to-consumer? How did it kind of play out?

Sadie Scheffer  

It started as a direct-to-consumer, bike-delivery business, which is actually how word of mouth spreads so fast. 

We got a bunch of press 7 or 8 months in because I was delivering everything on my bicycle (laughs) which was because I didn't have a driver's license. 

Chase Clymer  

(laughs)

Sadie Scheffer  

So that was a wild ride. I was riding 100 miles a week delivering bread. Then, let's see.... My vision or my business plan at the beginning was to go to farmer's markets. 

I was gonna do like 9 farmers markets a week on my cargo bike, just like everything... Everything is bicycle, everything direct, everything local. 

I got into my first farmer's market and I just fully hated it. We weren't making any money. It was miserable. It was hard. 

And simultaneously, I had started selling bread wholesale at one of my favorite grocery stores Bi-Rite Market in San Francisco just as an ego thing. 

I was like, "I just really want to see my products on the shelves there. So even though I don't think we have the margins to do wholesale, I'm just gonna do this one, as a treat to myself." 

And then I realized that we were selling as much bread at Bi-Rite as we were at the farmers market with so much less labor. 

And so that flipped the switch there like, "Okay, we're going wholesale." And [we] figured out the margins, scaled the wholesale business --first locally in the Bay Area, then California, then West Coast.

And then in ,I think, 2014 --So 3 years in-- [we] actually built a website that could handle Ecommerce to start shipping nationwide. 

And we started shipping, 30 boxes a week, and then 90 boxes a week. 

And now we're up to 100 boxes a week. And that was the scale. So since COVID, we're about 50-50 wholesale and Ecommerce.

Chase Clymer  

Absolutely. Now with building out those wholesale relationships, I feel like that's something that we don't touch on much here. So do you have any insights on... 

How do I get [my] new cookie brand, Chase's cookies... How do I get them onto the shelves? 

What does that look like? Do I just walk in and talk to people? 

Sadie Scheffer  

Great question. so I feel like I handed off sales many years ago. So I'm a little rusty. Can I direct people to a resource?

Chase Clymer  

 I would love to. Yeah. What have we got?

Sadie Scheffer  

Okay. Alli Ball is my wholesale hero. I think it's alliball.com or allisonball.com. She runs a program called Retail Ready, that is specifically for new food CPG brands trying to get onto retail shelves. 

She was my buyer at Bi-Rite And she's been doing this for maybe 6 or 7 years. She's amazing. 

I put all of my sales and marketing team through her Retail Ready program, because she's better at training them than I am. So I definitely send people to Alli. 

I liked what you said. 

You said "wholesale relationships". Relationships are so key. So we have a full-time account manager who is like... His superpower is relationship building. 

And so he knows all of our buyers, and they know him, and he takes care of them. And it's building these relationships of reciprocity. We're not just trying to be like "sell, sell, sell." 

We're trying to figure out what our accounts need? And how can we nurture them and strengthen them and create really long-term relationships. 

So even when there's turnover with our buyers, even when the stores are having a tough time, they think of us first. So I think that's really key.

Chase Clymer  

Absolutely. I think that's just the sales training in me, (laughs) knowing that it's always a relationship. 

It starts with a relationship before it becomes any sort of transactional thing. And if you view it a different way, you're gonna come off insincere and you're probably gonna go out of business. 

I don't know.

Sadie Scheffer  

Yeah, it's nice to like, feel like you are actually cultivating a community around the business as well. 

That is a type of resilience that I think is really important, especially as  the world is on fire. 

Having these local, resilient relationships and people we can lean on and people we can help. It's just a really wholesome feeling.

Chase Clymer  

Yeah. And you said this whole thing about reciprocity earlier and that's like a really... I've found that it works very well just to make it straightforward. 

You're going to meet people throughout your career, be it in, starting a brand or working at an agency or being some sort of consultant or whatnot. 

And that you probably can't really help each other then, but they might move on to something or down the line, they may have a lead that's perfect for you or an introduction that's going to change your business... 

Some new wholesalers that might need to be connected with your product. And just living in a way that is like... 

Building those relationships, trying to stay in touch, just trying to be as helpful as you can, to an extent.

Obviously, you can't give away everything for free, but just being honest and available and open to people opens so many more doors.

Sadie Scheffer  

It does, yeah. And it feels good to be able to help people. And it definitely feels like thinking about relationships as "What can I put into this relationship?" Not "What can I get out of it?" is the key for us.

Chase Clymer  

Yeah, that's definitely a mindset shift that people need to kind of consider. 

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Chase Clymer  

Not to completely go 160 on the conversation, but I do want to talk a little bit more about direct-to-consumer. So you said you launched the site... Was it back in 2014? I think you said... 

Sadie Scheffer  

I think so. 

Chase Clymer  

Alright. And so obviously that's just the Wild West, actually. How did you find that initial traction? 

Where were you going to try to get customers? What did the playbook look like back then and how did it evolve?

Sadie Scheffer  

Good question. So I feel like unlike a lot of CPG founders... My thing is operations, not marketing and sales. 

I feel like most of my peers are really good at the marketing and sales side. So marketing was the first thing I hired for. 

I was like "I'm not good at this. It's not fun for me. I'm going to bring someone in who can do this." 

And so my first marketing director, her job was fine tuning the website, doing SEO, and working on getting our Ecommerce sales up. 

So it's sort of like Ecommerce was under the marketing umbrella actually until this year. Now it's under sales. Sales were specifically wholesale for us. So it was a little bit unconventional there. 

So I think we started with just fine tuning our email marketing. That was the first person I hired. That was her skill set. [It]  was email marketing. 

We have... I think customer loyalty and customer relationships are our superpower as a business, our customer care is outstanding. 

Anyone who's tried our product and had an issue with it, call customer care. You will be taken care of... We try... We aim to create delight, that's customer care's thing. 

And so that customer loyalty is what I think created the original Ecommerce traction, especially customers who were getting their bread by bike delivery, and then moved out of the area and then shared it by word of mouth. 

Now, let's see... 

We've done a lot of work on our customer flywheel and customer retention, just looking at the customer journey throughout, from first finding out about our brand through placing their first order or through placing their 10th order. 

And then customer acquisition-wise, it's been a little bit slow since COVID. Because we used to do a lot of in-person events [in] farmers markets, craft shows, food markets. 

And so that's mostly dried up, we do a few virtual events since COVID. We're very conservative about COVID safety. 

So right at the beginning, we said "Pull out of the farmers market. Pull out of anything in-person." 

Because our goal is that nobody gets COVID because of their job at Bread SRSLY. So yeah, looking forward to someday being able to do those again. 

But I don't think it was as big a loss as we expected it to be with everybody shifting their purchasing habits to online. 

It booked up our ad strategy and things like that to still keep [our] pipeline of customers coming in.

Chase Clymer  

Absolutely. I got a few questions out of that response. So the first one being... Your avenues for your customer care team is obviously to create delight. 

How often are you trying to jump on the phone with customers --not even ones that are complaining, but  interviewing your customers just to find out more information?

Sadie Scheffer  

Not too often. We just did a big survey. But that was virtual or just like a Google Form

So I think we have Nicole as our community manager right now. And I think... One of the things she's interested in, and the idea she brought to the table is to become more of like a VIP account manager for our top 100 customers or something. 

So I'm excited that that is coming. But I'd say right now, it's more when someone calls in to complain, our customer care team is really good at keeping them on the phone and learning more. 

But we're not reaching out to customers for those calls.

Chase Clymer  

Absolutely. Yeah. 

We just did a round of customer interviews right before I went on vacation and the stuff that we learned was amazing. And it's changing like a lot of the copy; How we talk about ourselves, how we present ourselves... 

You were talking about your customer flywheel. We've been doing a lot of work lately on our customer avatar: Who are those VIP customers, the same type of thing. And it's just like... 

Honestly, the answers are in whoever's already purchasing from you. So just go ask them what you should do better and it just keeps building upon itself. 

Sadie Scheffer  

Definitely. 

Chase Clymer  

So one thing that I think is unique about consumables in general is the store quantities are a lot smaller than online. 

And you have to make decisions on what your margins look like with shipping and all that jazz. 

So do you have any --And you can get as detailed or not here-- but any tips for brands that are thinking about how to start offering something that's got a lower price point, like a consumable online, how to package that up? 

Sadie Scheffer  

Yeah. That's a tough one. Get really clear on your costs, especially shipping is always changing. I think we made a bunch of decisions. 

Here's a mistake I can share: It's that we've made pricing decisions based on the prices we got from our shipping carriers, who had no obligation to keep those prices. 

So when those changed, we suddenly either had to change our prices or eat that margin. So that's something we're dealing with right now. 

So just be mindful about what's realistic with your shipping, get really clear on what shipping actually costs, and check your shipping invoices. 

That was the big mistake of 2020 that we thought we were getting charged what we agreed to but turned out we used the inner dimensions of our box not the outer dimensions which ended us costs ended up costing us I think $27,000 for the year because we weren't checking those invoices to notice all the overcharges we were getting --which were our fault, but we didn't realize till way too late. 

So (laughs) that's tip number one. A lot of people want to buy a single loaf  from us, which would end up costing $20. 

And so we bundle everything into 3 packs so that the shipping cost sort of neatly folds into the cost of the bread and averages out in a way that's not totally outrageous. 

It's still an expensive product and it's expensive shipping. We have to ship it in 2 days or less because it's perishable. 

So doing those bundles, and doing those bundles in a way that makes sense with the shipping rates that we can get is sort of a fun little puzzle, but I recommend getting creative about how you batch things.

Chase Clymer  

Absolutely. Yeah, that was what I assumed you were gonna say because I've done this interview now a dozen times but I always learn more. 

And I really enjoyed you sharing your resource with Alison Ball, I believe was her name. 

Is there anything else that comes to mind that is like "This is a great resource for people to check out and to learn more."

Sadie Scheffer  

Yeah. For costings, specifically, Alli Ball has COGS for Ecommerce class. 

So COGS is the cost of goods sold. 

It's working out exactly how to price things to make sure that you're making money on every sale, rather than losing money on every sale. I think it's really important. 

Even if you don't like math and don't like numbers, learn the concept of gross margin, COGS, break-even, and those will take you a significant way toward pricing in a way that makes you profitable. 

And I highly recommend... There's, I think, the unicorn theory of brand, explosive brand growth of  "I will sell this at a loss until big money comes in and we can scale it." Try not to do that. 

Make money. (laughs) Stay profitable. It's really great. 

I think there are unicorns out there that do work for some people. I don't think it works for most people. 

And so if you want to stay in business longer, price your products in a way that supports your business, not in a way that tries to undercut the competition and wait for the funding to come in because that is a reach. 

Let's see... The other resource... There's a woman named Sarah Delevan, who I'm about to start working with. Her specialty is food COGS as well. So she can be a great resource.

Chase Clymer  

Awesome. That's amazing. I'll make sure to link to all that in the show notes and I'm gonna drop Allison an email and see if she wants to be on the show soon. 

So maybe that will come soon. (laughs) 

Is there anything I forgot to ask you about that you think is relevant that you want to share with the audience before we go today?

Sadie Scheffer  

I mentioned that my passion is leadership. I recommend... In the theme of customer relationships, and brand loyalty, and brand longevity ,and reciprocity... 

I highly recommend coming up with some brand values for everyone because I think a lot of people think of that as sort of a marketing schtick. We use it as a decision making tool. 

So once we could get really clear on our values... So we've done this exercise a few times.

The first time we came up with 15 values which I think are very common: Trust, safety, communication, respect... All of these things. 

And (laughs) the key learning that we had was that if you can't remember your values, you can't practice them. So we narrowed it down to 3. 

Our values are to Serve, Nourish, and Include. And we can use those as decision making tools when something hard comes along. 

When COVID came along we can say, what are we doing to Serve, Nourish, and Include our customers, our buyers, our employees. 

So I think that's a really great tool that is worth talking about.

Chase Clymer  

I couldn't agree any more. I remember when we first did ours. I think we had like 7 or 8. And we're like, "Well this is just way too many." 

And then the more that you iterate upon it, it just gets so much better. 

And then you go "You know what,  this one actually falls under this one. We're just saying the same thing twice. Why are we doing that?" 

And I think actually just the iteration on running those exercises, things just get more clear and just makes more sense, and everything just gets better. 

And not only the values exercise. I think like the customer avatar exercise. 

Or honestly, go look at your SOPs that you haven't touched in 2 or 3 years and I guarantee you'll be like "Well this could be way better. We should be doing this instead."

Sadie Scheffer  

Definitely. And at some point it's good to just leave them as they are and work on bigger and better stuff, too. That's also a trap. We like to go...

Chase Clymer  

Oh yeah. Yeah.

Sadie Scheffer  

..."What can we be doing better?" Instead of trying to do stuff that might be a little more scary.

Chase Clymer  

That's why my partner is involved (laughs). Because I'm definitely a tinkerer. 

I'm like, "How do we optimize this thing?" And it's like it doesn't need [to be] optimized.

 And the things I have automated that don't need [to be] automated, oh man, I could write a book about it. (laughs)

Sadie Scheffer  

Yeah. One verb, my favorite verb that I picked up from someone a long time ago, is "good-enough-ing" it. 

"Is this good enough or does it have to be perfect? No, let's just 'good-enough' it and move on." 

So I gift that word to you.

Chase Clymer  

That was Yes. Good. I'll write [that] down. 

Especially when you're talking about delegation as well. I think that --especially when you're first getting into delegation--you're trying to create like a clone of yourself. 

And that's just. "Is it good enough? Move on!" You're the only one that cares that much. Probably.

Sadie Scheffer  

Yeah, that's a tricky one. Because I think it can also be --what's the word-- patronizing to your staff, if what you're saying, what you did is good enough. 

Change your definition of what is "good enough". If it's good enough for your standards, that doesn't actually mean that your standards aren't the best. 

Your employee's standards could be way better and way different than yours. 

So open up that definition of what great looks like, because that's sort of the way out of that delegation trap or that micromanagement trap. 

Try to delegate in a way that lets your staff shine and succeed and win. Not in the way that makes you look the best.

Chase Clymer  

I think what I try to do myself is delegate outcomes. And I don't really care how it happens. It's just like, "This is what I want. Hopefully, you can help me do that." 

Sadie Scheffer  

I like that. 

Chase Clymer  

Yeah. Because nobody... Especially on smaller teams or when you kind of get more mature in your career, nobody wants to run through a checklist. They like a challenge. 

They like to use their smarts and they like to solve [problems] and be creative. I think problem solving and creativity is in human nature. 

And people just like to tackle that stuff. And so not having a predetermined or pre-described "this is how you're supposed to do it." 

It's just like, "This is what we're looking for. And this is why." 

I think the "why" is very important, too. "And this is why we're looking for that." 

And then it's like, "Just help us get there. Have fun. Let us know what you're doing."

Sadie Scheffer  

I love that clarity. Totally awesome.

Chase Clymer 

I had a wonderful conversation. If someone's interested in the product, where should they go to check it out and maybe pick up a few loaves? 

Sadie Scheffer  

Yeah. come to breadsrsly.com. You can get 3 packs of all our products shipped nationwide. Or if you're on the west coast, check us out in natural grocery stores. 

We'll be in the refrigerator section which trips some people up. It's a perishable product, so look for it in the fridge and enjoy it toasted.

Chase Clymer  

Awesome, thank you so much. 

Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. 

We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

Make sure you head over to honestecommerce.co to check out all the other amazing content that we have.  

Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.