On this episode of Honest Ecommerce, we have Chris Habib. Chris is the Co-Founder and CFO of Perfect Herbs, a herbal tincture manufacturing company in Toronto, Ontario. We talk about turning personal expertise into business success, building friendly connections with customers, transitioning from practitioners to retail markets. and so much more!
Chris manages the business strategy, marketing, and financials of Perfect Herbs. Under his leadership, the company has grown revenue 50%+ year-over-year, transforming from a startup into a leading national brand.
If you're an entrepreneur who sells herbal products in North America, or who's interested in launching new herbal products, you can contact Chris at chabib@perfectherbs.ca.
His company has licensed herbalists who can consult with you free of charge, make you samples to try, and help you launch your herbal product with high-quality herbs at a low cost, and with no minimum order quantities. Their customers call them "the greatest company they've ever worked with."
In This Conversation We Discuss:
Resources:
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Chris Habib
Your competition, depending on who they are and what they look like, they can compete on price, they can compete on sales, they can do all these things that you can do too. But what they can't do is get you.
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'm your host, Chase Clymer.
And today I'm welcoming to the show Chris Habib. Chris is the CFO and co-founder over at Perfect Herbs. Welcome to the show.
Chris Habib
Hi, thank you.
Chase Clymer
I'm excited to have you here. So for folks that aren't familiar with the brand, could you quickly just tell us what are the types of products you guys are bringing to market and selling over there?
Chris Habib
For sure. So Perfect Herbs basically manufactures herbal tinctures. So we do basically liquid extracts of hundreds of different herbs usually for medicinal purposes.
Chase Clymer
Awesome. Could you give me some examples real quickly?
Chris Habib
Yeah, sure. The most common ones would be things like Echinacea would be a super common one.
But the health purposes span the entire spectrum. So we have herbs for immune function, we have herbs for mental health and energy and fatigue and hormones. Basically, you name it, we have a herb and a tincture for it.
Chase Clymer
Absolutely. Now take me back in time.
Where did the idea for this business come from?
Chris Habib
Yeah. So we've been in business for 11 years. And when we started, my partner was a registered herbalist, a traditional Chinese medicine practitioner and a naturopathic doctor, so super smart guy.
When we started, we identified that in the herbal market and kind of in the natural medicine market, herbs were expensive and they were hard to sort of source and to try to appreciate where we could get high quality stuff for a good price and get good service.
And so we started the company with that mission in mind. It's like, let's help health practitioners get high quality stuff at a good price, and then keep it accessible and affordable. Since then, we've adapted and grown and changed things, but that's where the initial mission came from.
Chase Clymer
Absolutely. And that was, you said, 11 years ago or so.
And so within that assumption and hypothesis you're making about the market, you were targeting healthcare practitioners, I heard?
Chris Habib
That's right.
Chase Clymer
Was that your target ideal customer at that time? And what was that go-to-market strategy? What did that look like? How are you getting... How are you having conversations with people? How are we selling the product?
Chris Habib
So yes, when we started, that was the main audience, health practitioners. And it still is. I was a naturopathic doctor at the time as well. And that sort of audience is very tight knit and very small. So as soon as you kind of do anything, everything spreads by word of mouth. And then people know about it. So it's a very small niche.
And so we basically started making tinctures just for our friends. And it was just like, ‘We're kind of doing this thing and we have these products, you might like them.” And then from there, I guess they talked to their friends and it kind of grew from there and spread.
So, when we started at the time, we were providing a very small handful of products, I think only like maybe 10 or 20 different products. And my partner was making the products out of his apartment. It was probably a little more sketchy than it should have been at the start. Definitely very different from what it is now.
But that's how we were basically selling. We were just operating through word of mouth. And the products were high quality and affordable. So people were happy.
Chase Clymer
That's amazing.
And do you remember, was there a place and time where things started to take off and do you know what was happening behind that?
Chris Habib
Yeah. Do I know? The business itself grew fairly exponentially year over year, especially in the early years. So I always, you know, I can give an answer. I'm a pretty skeptical and generally humble person. So I guess at things but the truth is, I often don't know what's happening behind the scenes and why things move as they do.
My suspicion is that we hit a tipping point in the market where enough people knew that we existed and knew what we provided and the solution that we provided, which again, at that time was just like good prices, good quality products, good service, that kind of thing.
And because we were offering products, or I guess I would phrase it this way, we were the target market that we were serving and we were part of it.
So as opposed to having to exit your bubble and go talk to other companies whose main mission would have been, like, profit, we were operating and building in an environment where we were just helping our colleagues. And they could talk to us, they could tell us what they needed. And as soon as we knew what the next problem was, we would work on a solution.
So I think as we grew, we hit a tipping point where enough of the market knew we existed, and they liked what we were doing. And then we're just like, ‘Oh, okay, I guess we're growing.’
Chase Clymer
Absolutely.
I think that's a very good thing to point out is that part of your growth was tied to the fact that you truly understood your ICP, your ideal customer profile, because you were your ideal customer.
And so that learning that most founders do is trial and error where they need to tinker and test and go out and talk to people, you guys really just amplified that and really speed ran that entire process.
Chris Habib
Yes, I would say that was a huge edge. And a very large factor in our early success is exactly that.
So at the time, I was also running a multidisciplinary health clinic, for which the majority of our customers also are in a very similar situation. So I understood all the problems, all the things that I wanted as a customer and then I could make sure that I implemented those on the vendor side of things.
Now, as we've grown and as things have changed in terms of the markets that we serve and the types of problems that we're trying to solve, that edge somewhat disappeared because I'm not personally in every customer situation.
And so then that trial and error piece that you're mentioning becomes extremely important. And that's something that we do regularly and quickly.
So I'm a big fan of the sort of fail quickly and fail often approach. And then take that learning and then adapt and iterate from there. I would say that's probably where the business has moved over the years.
Chase Clymer
Yeah. I think that analysis paralysis and just stagnation, not making a decision is more detrimental to your company than any one of the choices in front of you ever probably will be.
Chris Habib
Yeah. And I would say it probably takes a certain personality type too to be able to face that and recognize what is a good potential investment or a good bet. What information do you need to then decide whether the bet has panned out or not? How fast can you react to that information? And then do you need to pivot or modify or ditch it altogether?
And so over the years, we've run a number of experiments, as I said, and continue to do so. Some are in the product sphere, like just super simple, create a new product, see if the market validates it.
And then some are in the marketing sphere, so like try a new marketing approach, new marketing tactics, see if that works and generate new customers and new sources of revenue. And then somewhere in the tech sphere as well.
So pretty interestingly in our industry, there hasn't been a lot of tech adoption. A lot of the, as you can imagine, herbalism is something that's been around for a very long time. And what I've noticed is that the types of people and the types of companies that have run herbal tincture manufacturing are pretty old school.
And so one of the advantages that we had was coming in and sort of being young and fresh and exposed to technology. So we launched an app that lets people customize their tincture, mix and match different herbs and then drop ship to their patients directly.
And so I think that was another edge was like, ‘Oh, like this company is doing something pretty cool.’ And like, ‘They're, they're not shying away from tech usage.’
Chase Clymer
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Chase Clymer
I think it's worth identifying that particular use case right there because most of your customers are... For lack of a better term, they're reselling your product to their end customer, which is, I'm assuming, a patient or something of the like.
And you're giving these other smaller entrepreneurs better tools to customize and make unique products so they resell and get the benefit from that.
Chris Habib
Exactly. Yeah. So that addressed a couple of different problems that our customers were having.
One was, they had to do, or at least in the past, they had to do a lot of manual work to even create that customized tincture or that customized prescription. So the solution that we built made that process easier, but it also allowed them to, if they chose, to not do it themselves and to basically offload that mixing and matching process.
Some of them, basically what they do is they would buy bulk quantities and then literally do the mixing and matching themselves kind of like a chemist and then prescribe that. And then some of them would say, ‘You know what, to be able to do that, I have to carry maybe 20 or 30 different individual products and that takes up space, that takes up money and so that's work.’
Others would say, ‘You know what, because you guys have over 300 of these products, I can mix and match any of those 300 and I don't have to carry any inventory. That's a huge win. And you can do the mixing and matching yourself. I'll tell you what to do. And then just send it to my patient.’ So a pretty nifty solution.
Chase Clymer
Absolutely.
How else has the company evolved over the years?
Chris Habib
Yeah, so when we started in my partner's apartment, we moved from there into a brick and mortar retail store. And then we quickly outgrew that space. And we moved into a manufacturing facility, which is where we are currently. And we've expanded, I think we've at least doubled the space in the existing manufacturing facility due to growth requirements.
From the initial days of just servicing practitioners, we've moved into the retail space directly. Our customers somewhat behave like retail in the sense that they're smaller. Technically they're wholesale, but we're not sending pallets of anything to anyone. And so yeah, we've moved into the retail space. We've expanded to Amazon. We've expanded to Shopify.
And so we've launched a few different brands where we do the manufacturing, but sell through different funnels for different audiences.
And we've also moved into the, what I would call, large-scale herbal tincture manufacturing space. So there's a subset of our customers who are entrepreneurs or they already own a natural supplement company or a herb company and they are just looking for a good manufacturer.
And so we've sort of taken a chunk of that market where we are able to use our existing processes which is really like where we shine - very, very good at the operational and production processes. And we then make their products. There’s a couple of people who fall into that category.
One, as I mentioned, entrepreneurs and people who have existing companies. But there are people who are either in Canada and greats who are in Canada. We can make your stuff, we're regulated, we have all the regulatory approval.
And then we have customers who are not in Canada, let's say they're US based, and they wish to expand into Canada. And the Canadian landscape is like one of the strictest in the world. I think I've been told it's like top 2 for how strict things are. So people have a lot of difficulty selling their products in Canada.
They come to us and we're like, ‘Oh yeah, we got that. We got that covered. We'll help you walk through it.’
Chase Clymer
That's amazing.
Now you quickly mentioned something that I know my listeners will want to hear a little bit more about.
So you launched the main brand, obviously, Perfect Herbs over a decade ago. And then you alluded that you guys launched direct-to-consumer on Shopify. You also moved into the Amazon space. And then you said, and we're using different brands.
Could you talk about the thought process behind entering these different markets in different ways with different brands, instead of just using the brand that's a decade old?
Chris Habib
Yeah. So part of it is that trial and error bit that I mentioned where I actively had resistance from my team saying, ‘Why are you doing this? We already have a brand. Why are we duplicating work?’ And my answer was, ‘Well, technically, when it comes to marketing, multi-channel fulfillment is a marketing strategy.’
And a lot of companies, they're conglomerates and it's like you're always buying from the same company, but they put different labels on it. It's really the same product that's underlying it. So for me, the thinking was it's an opportunity. I have no idea if it's gonna work, but it's worth a shot. We have the manufacturing capability, so let's give it a shot.
The other thing is that there are different market positions that can be taken. So in our industry in particular, some customers really want, for example, high quality organic products. And they are willing to pay more for that organic component. Sometimes paying more means paying three to four times more. So for some customers, that's fine, they'll do that.
For others, they prefer a value brand where it's like, ‘No, I don't really need organic. I'm happy to just get the thing, make the quality as high as you can. It doesn't have to be organic.’ And therefore, it's a value proposition.
So there are really, really different segments of the audience in terms of how they think about things. I think I answered part of your question.
Chase Clymer
No. I think that the differentiation you made there with how you can attack different parts of the market based upon the value, but at the end of the day, it's still the same product, that's just a really old school growth hack that Colgate and all these big, giant companies craft.
Could you talk maybe a little bit about... Could you draw parallels between those value shoppers and what marketplaces they were in versus the customer that's willing to pay more for more of a quality and maybe even say luxury product. Where you might find those and how the marketing differs?
Chris Habib
Yeah. So interestingly, they may be found in the same spots. Amazon is a good example, you'll find both sets of shoppers in one spot.
The marketing will differ based on what the brand represents. And so that could be in terms of a design perspective, where the label looks a certain way, the product looks a certain way, the packaging looks a certain way, and it's intended to be aligned with the values of that brand.
And then the other place where that will differ is in terms of the copy and content that's used. So again, just the words and the things you say that explicitly matter to you or that really speak to that customer avatar.
Chase Clymer
That's amazing.
A little pivot here is that I understand that your newsletter is absolutely hilarious. My assumption is healthcare is kind of stuffy and serious. How can you get away with that?
Chris Habib
Yeah. So that's something that evolved over time but really describes me and my partner as well and our personalities.
So one of the things that we thought about when we started this company was what can we do to differentiate ourselves? And speaking with business owners and having had the experience of mentoring others, one of the things that I often say to people is that the only thing that your competition can't get is you. You're a unique individual.
So your competition, depending on who they are and what they look like, you know, they can compete on price, they can compete on sales. They can compete like they can do all these things that you can do too. But what they can't do is get you.
And luckily I have a very troll-like, meme-like nature to me. And so I leveraged that humor in our newsletters and sort of noticed that people really liked it. Exactly. Health care is a very serious industry where you don't want to say, ‘My products are a joke,’ because my products are very serious. It's like, ‘You know I'm extremely serious when I create them.’
But in terms of the relationship that we have with our customers, it's a very friendly one. So we see each other as friends, we see each other as colleagues. And so we can sort of make fun of things and talk about things that other brands really can't do.
And so we've been told repeatedly over the years, ‘Your newsletter is absolutely hilarious. I always open your emails. I go out of my way to read what you write.’
And what's funny on my end as a business owner and marketer, when I put that hat on, is like, I do very little, if any, selling in those newsletters. So I actually get people–because our customers are also business owners a lot of the time–they'll reply and be like, ‘Chris, you got to sell more stuff in your newsletters. You're just being funny.’ And I'm like, ‘Yeah, part of the value here is entertainment.’
My customers, at least in that division, deal with very serious things every day. You're in healthcare, you're seeing patients with chronic degenerative disease, you're helping people. It's like, you could use a smile. I want to help from that perspective as well.
And then the last bit I'd say is there's a concept of standing out in the marketplace and being different. Sort of like… You want people to talk about you. You want people to notice that you're different. And I noticed that everybody does the same thing. I was like, ‘Oh, this is a spot where I can do something differently.’ And at least it'll fit my personality and our brand.
Chase Clymer
Absolutely.
Now if I've listened to this episode and I'm curious about these amazing products that you're obviously so passionate about creating, but also, now I'm curious about this awesome newsletter.
Where should I go to check out the products and to sign up for the newsletter?
Chris Habib
Yeah. So our website is perfectherbs.ca. And I may let you on the newsletter.
Chase Clymer
Awesome. Awesome. Awesome.
Now, is there anything I didn't ask you about today that you think would resonate with our audience?
Chris Habib
I think the biggest thing for your audience in particular, one of the most potentially useful things is that we do this sort of custom manufacturing for customers. So if you're listening to this and you're an entrepreneur and you're like, ‘Oh, I want to sell herbal products,’ I'm the guy to talk to.
And if you already own a company where you're distributing herbal products and you want to start selling that either in Canada or in the US, I'm the guy to talk to.
We create samples. We work with you to build your formulations using my partner and our information completely free of charge. We have no minimum order quantities. So basically, we're basically a dream come true for people who fall in that category. So it's not necessarily a question to ask, but it's more so a message that I want to get out for people.
Chase Clymer
Oh, that's amazing. And I've got your email here. I'll make sure to put it in the show notes as well.
Chris, I can't thank you enough for coming on the show today.
Chris Habib
My pleasure, Chase.
Chase Clymer
We 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.
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Until next time!