The Startup CPG Podcast


In this episode of the Startup CPG Podcast, host Daniel Scharff sits down with Sergio Tache, co-founder of Dossier, the fragrance brand that grew from hand-filling bottles in a Brooklyn basement in 2019 to $150 million in sales — including the #1 perfume spot at Walmart and #3 at Target — culminating in a recent successful sale of the business. Though Daniel and Sergio go back to their business school days playing rugby together, this is the first time the full Dossier story gets told in public.


Sergio breaks down the "aha moment" that started it all: realizing that a $52 bottle of luxury perfume costs roughly a dollar to produce, and that there was a massive opportunity to deliver the same quality — same French perfumers, same ingredients — at a fraction of the price. From there, Dossier built a DTC engine around fragrance "impressions" (legally distinct from counterfeits), a no-questions-asked return policy, and one of the most disciplined approaches to packaging economics in the category.


Daniel and Sergio also get into the brutal realities of scaling into wholesale — the cash flow shock of net-30/60/75 terms, a $33 bank balance four days before payroll, and a packaging redesign that took far longer than anyone expected — plus what's next as Dossier pushes its original fragrance line toward a $60 million goal by 2027.


Listen in as they discuss:

  • The math behind Dossier's founding insight: luxury perfume margins and why a $52 bottle can cost about a dollar to make
  • How "impressions" work legally — and why Dossier leaned into quality instead of just chasing the lowest price
  • Building trust for fragrance e-commerce with a no-questions-asked return policy that kept returns under 5%
  • Why using one bottle, pump, and cap design across all SKUs helped both branding and unit economics
  • The CAC-as-rent mindset and why average order value matters as much as margin in DTC
  • How an unsolicited email nearly got deleted before it turned into Dossier's Walmart partnership
  • The steep learning curve of moving from DTC to wholesale — brokers, 3PL specialization, and demand planning
  • The packaging crisis: why a "brand box" built for DTC completely failed on retail shelves
  • Surviving a cash crunch with $33 in the bank four days before payroll — and what separates a good supplier from a great one
  • Why fragrance is one of grocery's fastest-growing categories, driven by mass-tier accessibility rather than premiumization


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Creators and Guests

Host
Daniel Scharff
Founder/CEO, Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Sergio Tache
The perfume world is still a pretty opaque one. You still have to work with perfumers. There's not a lot of them out there that are high quality. And we wanted to find a perfume in France because that's really the birthplace of great perfume. It wasn't easy for us to find the right partner off the bat. That's the part where we struggled. If you want to create a perfume that's going to smell pretty close to something that you like, you can get there relatively easily. You can get like 60, 70% there pretty easily. It's that last 30% that we feel make all the difference. And also, if you want the great ingredients and the great quality, you need to find a partner you trust.

00:51
Daniel Scharff
Welcome to the Startup CPG podcast. Today is our first episode in the fragrance space, and as you'll probably be able to tell, I don't really know a lot about it, but I've been tracking the story of my friend Sergio Tache, who went from hand filling bottles in a Brooklyn basement in 2019 today absolutely dominating retail shelves. They've hit 150 million in sales, including holding the number one perfume brand spot at Walmart and number three at Target. And they recently conducted a successful sale of the business. I am so excited for you to hear this story about how they identified a huge market gap, which was high quality fragrances at affordable pricing and then just executed so well. There's so much in here that will make even our food and beverage founder, Audience think a little bit differently and imagine all sorts of possibilities.

01:39
Daniel Scharff
And it's just a really great listen. All right, here we go. Sergio, welcome. I saw all this news lately about your sale and it was so interesting to me. I think mainly because I've known you for a long time, we haven't really kept up properly, but I just had no idea about this absolute rocket ship that you were on. And it's also funny because I think for me and having built a brand, I would use things like LinkedIn so much, every time we got an account, I would celebrate that milestone and try to get the next one going through a lot of FOMO and excitement and I don't think I really ever saw this stuff from you. And then all of a sudden I learned that you're doing like 150 million in retail sales and have done this really successful sale.

02:26
Daniel Scharff
So I'm just so interested to learn more about this. But first of all, did everyone know about it but me? Or were you just one of those really responsible operators, like actually just keeping your head down and building the business.

02:38
Sergio Tache
So first of all, it's so good to recollect after all these years. And thank you for having me. No, you're not the only one. Don't worry. I think we're purposely more under the radar. And yes, part of it was to build the brand and focus on that, but also part of it was we just didn't want to expose our growth and our success from the get go and were just focused on executing. But I think now, looking back into it, I think there's a happy medal that somewhere there I think we should have been maybe a little bit more forceful in communicating our success. And because I do think it does help the brand to some extent. You don't have to overdo it. But I remember having some comments from potential buyers.

03:19
Sergio Tache
For example, in Europe, went to a trade show and one of the comments that we got from that person was she saw the booth was super busy and she saw the success and she said to us, look, I know you guys reached out to us about a year or two ago. I didn't realize how big the brand was. So I do think there's some happy middle there that we should try to find and that's something that we probably will be working on more in the near future.

03:44
Daniel Scharff
Okay, so just tell me a story, Sergio, because I don't know the story of the brand. Obviously, you guys have had such massive success. And just so everyone knows, Sergi and I know each other because went to business school together. We played rugby together at business school.

03:58
Sergio Tache
The good old days.

03:59
Daniel Scharff
Yeah, the good old days. I mean, at that time, though, I think you really don't know a lot about people professionally. I think you know a lot about what it's like to play a sport with people and have fun with people. And you're being competitive. And really some people, I would say, show their leadership skills and other traits. But I mean, really we're having a good time and really just kind of bonding more on a personal level. And yeah, I just hadn't kept up so much. And then all of a sudden you've got this fragrance business. And I didn't even know you had a background in this whole area, so just super interesting to me. So do you mind just tell us the story? Start at the beginning and tell us how this whole thing got started.

04:33
Sergio Tache
100%. So after those two amazing years in business school together, we did bond, play rugby, have a couple beers, all that good stuff. I was in banking for a couple of years. And then after a couple of years decided to switch to entrepreneurship and started in the D.C. beauty world. So the first brand that I had was a haircare company and specifically a hair extensions company. And let me tell you, when I told my parents that I wasn't in banking anymore and I was selling hair online, their reaction was quite interesting. But that's how I got my first success. It was a small business. We started off with 20k on our bank accounts. My friend of mine, who was my mentor, and we made something out of nothing, which was cool.

05:17
Sergio Tache
He had a lingerie business that was very successful and it was a side project for him and I was running the day to day. And after a couple years that business was making about 4 million of sales a year. So were happy. Literally made something on nothing, which was cool. That gave me the appetite of doing some other stuff. So after that I sold my shares to my partner. I had a skincare company which also self funded, which went absolutely nowhere. And then after that, when I finally decided to shut down that skincare company, I had a phone call with the person who became our first investor. And we're just discussing various things around the E Comm world and the beauty world. And the topic of perfume came up and it was really the proverbial aha moment.

05:58
Sergio Tache
And we both said to ourselves, there's gotta be a better way of doing this. How does it make sense that to go out on a date and smell nice you have to fork out, I don't know, one $5200 plus at Sephora, there's got to be a way of creating high quality fragrances at an affordable price. Especially when you know the margins in the perfume industry, which are absolutely bananas insane. So just to give you an example, Daniel, when you buy a bottle perfume and you pay whatever the price is on $52, the cost of making that liquid inside the bottle is like a buck, literally $1. So the margins are insane.

06:36
Sergio Tache
So what we did is we decided why don't we create a product, take all the great things that make it luxury perfume, fantastic, which are great ingredients, great craftsmanship, made in France, and just remove all the fluff. So we had, when we started, a simple packaging, nothing super ornate. We had a simple bottle, nothing fancy. And we really tried to make perfume what we think perfume should be about, which is the actual liquid inside the bottle. And that's how the business started. We made great perfumery, made in France, same high quality ingredients as all the great brands that you know and love, but priced at 29, 39 or $49. So much more affordable for everybody. And not just the lucky few who can spend that kind of money in the big stores.

07:21
Daniel Scharff
Okay, let me ask you this. Actually, last night had a really great discussion with Professor David Bell, who was a Wharton professor when were there. He's a legendary guy because he was one of the early investors and advisors for some of the most epic D2C brands out there, including Warby, Parker and Harry's and Cotopaxi, all these different brands. And were talking about the Warby model. And everyone, I think, is pretty familiar with that story now. But these are the very early days of E commerce and the idea of, hey, we're going to just really reinvent a broken industry here by selling glasses online. And of course, the question at the time, which is not a question today, is will people do that online? Don't they want to just go into the store and try this?

08:04
Daniel Scharff
So I guess then my question to you would be, were you concerned about that at all? Because the way that I would buy a fragrance, which I recently have done, actually, I was like, I should start smelling nice. Everyone's doing the self care revolution. And I would just. Honestly, I don't know if this is the most responsible thing to do, but I would go to the airport because I'm always in the airport and I have a lot of time to kill and try pretty much every single fragrance there, find the one that I like and then buy it on Amazon. Because of course is way cheaper. But I would have to go through that process. Cause I would try a hundred and literally only like one of them. Just the way it smelled, if that it felt right for me, that wasn't too much.

08:42
Daniel Scharff
And so did you feel like that was good? Because I know you started D2C, but did you worry about people doing that or because you have reference skus where you can tell people what it's going to be compared to? You felt like you could get over that hurdle.

08:54
Sergio Tache
So first of all, absolutely, in beauty, you can buy online, it's relatively easy. But when it comes to fragrance, to your point, you actually, it's important to try the product because it might not match what you like. It might not match your skin. So what helped us in the beginning, to your point, is that the initial 20 fragrances that we launched were impressions of scents that you know and love. And when I see impressions, there's no dupes. So they smell exactly the same as the fragrance that you know and love. So that gave us a huge leg up in terms of getting those first conversions in and getting those first sales in, that was big for us. So that obviously helped. The second point was the price point was very accessible, so you weren't committing a huge budget to this.

09:37
Sergio Tache
If you take perfume companies that have more expensive perfumes, they'll have discovery sets, and then you buy the discovery sets, and then once you find a perfume that you like, you come back, you buy the whatever $200 perfume, you get a refund for your discovery sets. We didn't have that issue because the price point was very affordable. And three, we made the return process super simple. So we said, look, you're going to buy a perfume for 29 bucks. If you like it, amazing. If you don't try it on, if you don't send it back to us, no questions asked. So it doesn't matter if you didn't use it doesn't matter if you finish half the bottle. It's okay. Just send it back to us and we'll refine to you.

10:14
Sergio Tache
So those are the things that we thought about in terms of getting those initial conversions in, and that's how we did it. But not to your point. I always like to say we did fragrance the hard way, which is to sell online, but that's how we got over the hurdle, is getting those orders in. And you know what, returns is actually pretty low, like sub 5%.

10:33
Daniel Scharff
So very manageable, and it's so interesting. And a lot of the questions I'm going to ask you are going to expose that. I don't know a lot about the fragrance industry, by the way.

10:41
Sergio Tache
I think that makes it for more interesting conversation because you get to ask questions that I don't necessarily get, and I find them fascinating. All right, cool.

10:50
Daniel Scharff
Well, thank you, because a lot of our listeners will be in the same boat as me. So can you just tell me a little bit about how does the product development process work? Like, is it pretty easy to dial up what we would call a coman and just feel like, hey, you know, or a formulator, like, I just want 20 copies of this stuff that's out there. Get as close as possible. And I mean, because I've been through product development process, I know you can send them reference stuff, and if they're pretty good, they're going to have the right tools to emulate something pretty. Well, is that process pretty simple or was that really complex to actually get the fragrances where you wanted them to be?

11:23
Sergio Tache
So let's start by actually telling you listeners what perfume is. If you Think about what perfume is. Perfume is a chemical reaction that happens to smell nice. I mean, that's really it. It is a mix of ingredients that you put together and that creates a smell that smells nice. So it's really at the intersection of chemistry and art and the way science and art. Number two. No, it's not that easy. The perfume world is still a pretty opaque one. You still have to work with perfumers. There's not a lot of them out there that are high quality. And we want to find a perfume in France because that's really the birthplace of great perfume. It wasn't easy for us to find the right partner off the bat to. That's the part where we struggle.

12:05
Sergio Tache
If you want to create a perfume that's going to smell pretty close to something that you like, you can get there relatively easily. You can get like 60, 70% there pretty easily. It's that last 30% that we feel make all the difference. And also, if you want the great ingredients and the great quality, you need to find a partner you trust. So, to answer your question, no, that process was not easy. That's something that we kind of struggle with in the beginning, and thankfully we found out part of pretty quickly. We kind of lucked out, to be honest with you. We reached out to a lot of them. But I feel that process was a key moment in our success.

12:43
Daniel Scharff
Well, that's good to hear. I don't want to hear that it was too easy for you just given all this incredible success. So I'm glad to know that you had to put some real.

12:49
Sergio Tache
Yeah, that was on a struggle.

12:51
Daniel Scharff
Yeah. Good.

12:51
Sergio Tache
Okay. You'll be happy to learn.

12:53
Daniel Scharff
Okay. And then can you just talk to me a little bit about the economics of growing this kind of a business direct to consumer, because you've got then the lower price points than some of your competitors, probably your cost of goods would be. I don't think you're investing as much as some of them might be into just the fanciest bottle that you can find out there. Right. Because you have to differentiate it somehow. But how do those D2C economics work for you as you're growing? What. Where are you investing to really get that early traction?

13:19
Sergio Tache
So the first thing is we wanted to make sure that we could produce, first of all, a bunch of perfumes, not just one, and make it high quality, but cheap enough to produce that we can actually make a margin. So we use a couple of strategies that we thought were going to help us. So, as I mentioned to you, part of the brand is that we don't use fancy bottles, but we have a simple, elegant bottle. And what we did, both from a branding perspective, but also from a cost perspective, is that we use the same bottles, the same pumps, the same caps for all our SKUs. So that way you can order in bulk. You don't have to worry about managing a huge amount of bottles and raw materials, which can be tricky.

14:00
Sergio Tache
So that's both the brand, because the look of fuel we felt was good, but it also served us economically. And then when you start growing a business like that, I always go back to basics. I think if you have a good product, basics work. So this will sound very familiar to you. Raise a focus on price margins, contribution margins, making sure that you make a buck. And you were mentioning the Willby Parker example where it was the heyday of DDC and we're going to cut the middleman and that's how we're going to make money. We can propose, but are less expensive. Well, you know what, somebody told me this recently, I find it fascinating is that he goes, cac is a new rent. And I find that fascinating because at the end of the day you're still paying somebody.

14:41
Sergio Tache
It's just that you're not paying a landlord, but you're paying Mark Zuckerberg and Sergey Bridger. So at the end of the day, super focused on margin and making sure that you sell orders profitably. That was really key for us beyond obviously the quality of the product, but that's how we launched and our first ads were extremely direct response. I always feel like when you launch a business, your number one priority beyond the brand, beyond anything, is make sure that somebody is going to take out their credit card and pay for your product. So do whatever it takes to get to that in getting your first client in. So our first ads on Meta were extremely direct response. So we did a bunch of comparison ads. So very brick to forehead stuff. But that's how we started and that's how we got our initial traction.

15:27
Sergio Tache
And then after that, the interesting thing that we discovered, I wonder how that applies to the universe that you evolve in, is that people wanted to discover fragrances. And what I mean by that is the concept of signature scent that you have one perfume, that's your perfume that you use all the time is kind of gone. People want to discover new fragrances, explore and use certain fragrances in function of the mood, where they going, are they going to work, are they going to date? And that sums up well, because knowing that we expanded our collection of Perfumes quite dramatically. So we started off with 20 perfumes, and now we have over 150. So I always say we will have something for you that you will like.

16:08
Sergio Tache
And the final thing that I want to mention, which I think is really important for ddc, is at the end of the day, our price point is pretty low. And if you think about unit economics, you want a high enough AOV to cover your CAC and to cover your acquisition costs. At the end of the day, you can have the best margin in the world. If you sell a product for 10 bucks, you don't have that much room for your full acquisition. So were really focused on trying to make sure that people buy multiple products in one go. So when people would buy with us, they would tend to buy two to three perfumes in one go and not just one. And that helped us tremendously get enough dollars in to be able to pay more for acquisition costs.

16:45
Daniel Scharff
Okay, so it's very interesting. I really. Especially when you're going to have that many SKUs. What a great plan. To just have a pretty simple bottle that almost looks like nail polish bottle, like very simple, and then you have a label on it. So obviously you can hold a lot more of the bottles inventory without worrying about exactly the fluctuations across the different SKUs. So that really makes sense. How are people shopping, by the way? Are they responding to the ads? Because you hit exactly the perfume that they're using and you're saying this is inspired by that perfume and it's a lot cheaper and it's going to be really similar and that's why they buy, or are they just really familiar with all the different perfumes out there and so they're open to getting a couple different ones from you both.

17:27
Sergio Tache
What typically happens is that, at least in the beginning, when our only line of perfumers were the impressions, and we can talk about the originals now and afterwards. So that was our own creations. But in the very beginning, that was it. They were intrigued by the price point and then they would click the thumb, would stop the scroll and. But they were convinced by the perception of quality and the easiness of returns. And the key factor was, yes, you would get them in through either price or because they saw perfume they liked, but then they realized, holy shit, I've always wanted to try Baccarat Rouge. Turns out I don't have 350 bucks to pay at Sephora, so Dossier's version is 49 bucks. Let me try that one. So that's how the process worked.

18:09
Sergio Tache
You would Be intrigued by the price point and maybe you see a perfume that you liked, but then you realize that there's a bunch of things that you always want to try and just couldn't do it. And through our process, the price point and the easiest returns, that's how you got into it.

18:22
Daniel Scharff
And were you finding a big boost from people then getting it and then telling their friends? Because that feels like the kind of thing people would share. Like, do you know about this really cool deal you can get that perfume like, oh, you smell nice. Do you know that there's a place you can get the perfumes actually much cheaper?

18:37
Sergio Tache
100% We do a post purchase survey and about 30% we ask the question, where do you hear about us? And 30% response is from a friend from the family. So just like you said, it's one of those. I just made this huge unlock. I just discovered this amazing company. You'll never believe what I've paid for this nice, stunning perfume. So you 100% right?

18:58
Daniel Scharff
That is very interesting. And then if I could just ask you a question about the impressions or the kind of dupes. Can you just do that? It would be very scary to me to do that, be like, are they going to get mad? Are they going to do something to me? Like, what's going to happen? What can you do?

19:13
Sergio Tache
Okay, legally, 100% there's no trademark on perfume. Also in the US you can communicate to the consumer around that. So you can say to consumer, you know what, this is the general direction of what's going to smell like. So you can say stuff like inspired by or maybe a version of pick your vocabulary. You can see these things. What you cannot say because it's not true. I cannot say I'm selling Chanel number five for 29 bucks. That's not true. I don't have the formula. I can tell you that perfume is going to smell awful. It's going to be very similar to Chanel Number five. But I cannot say that. So to answer your question, absolutely legal. You know, that's also part of the.

19:52
Sergio Tache
One of the reasons why very beginning, we didn't want to make too big of a splash because were concerned about the market reaction. Turns out nobody care. By the way, this industry has been around forever. We're not the first ones to have seen this loophole in the trademark industry. But I think the reason for our success is that we're one of the first brands to have created an actually high quality product out of it. Typically, companies before us were very focused on price and not high quality. We really focused on quality first. Even if we have to sell at a slightly higher price point than other previous Dube companies.

20:26
Daniel Scharff
Yeah, I mean, it makes like private label has existed for so long and obviously has had lots of success. And there are some extremely strong brands in private label, obviously Kirkland and Whole Foods365. A lot of stuff that's out there. And it just seems like you would have such an extreme advantage because of the massive price difference, not just on a percentage basis, which maybe you would see in some of the other private label categories, but just on a dollar perspective. So just the absolute, like you can save $100 if you're just okay with the bottle not looking exactly the same, right?

21:00
Sergio Tache
That is exactly it.

21:02
Daniel Scharff
There is some sacrifice there where, I mean, gosh, a lot like, it is cool to have a cool looking bottle. I don't know if I would buy a men's cologne where I thought the bottle didn't look cool because it's going to live on your counter, in some instances on your dresser or wherever. But you seem to have done that very well where it is. It's a simple, elegant design. And I think the other thing that is just so appealing about this is for me, it is a feat to finish a bottle of cologne. I mean, maybe I don't wear it as much, but it's almost like chapstick. Like if you would make it to the end of your chapstick, you should win a prize because it's so likely you're gonna lose it before then or something, right? Yes. Especially with cologne.

21:39
Daniel Scharff
I don't know if it's the same for women, but I can just only speak to myself like, yeah, I'm probably gonna, I don't know, change my habit or forget about it or I don't know, get bored or switch to something else before I make it to the end of the bottle. So, like, I feel like the extreme price savings that you're giving people is really important in that context where they may also have had a history of like, oh, I didn't finish that last one also. So this is an extra good deal because I really don't want to pay an extra 100 bucks for something that I may not finish or it may take me years to finish.

22:05
Sergio Tache
Let me ask you this though. When you had your bottle perfume, which cost you, I'm guessing, a pretty penny because you're amount of taste and you probably buy some nice stuff, did you ever think that when you were about to wear it, do you think is this moment or occasion special enough for me to wear my special fragrance? Did you ever think about that? I'm curious.

22:22
Daniel Scharff
Well, I'm a special boy, so everything at home is special. If you want to know my fragrance history, I actually would love to tell which is the first time I ever learned about cologne. I think I must have been 13 or something. And my older sister's date came to pick her up and he did a very cool thing which he had a car, which was a big deal.

22:45
Sergio Tache
I was just a kid then first of all, huge.

22:48
Daniel Scharff
Yeah. And he gave to pick her up and then for some reason he invited me to come sit in the car. He's like, what's up dude? Yeah, come hang out. And I get in the car and she pulls out a bottle of colonies. I'm like, this dude's awesome. This is amazing. And I'm like, what's the secret, bro? And he pulls out this black bottle of cologne. He's like, gotta start with this dude. And it was Drakkar Noir.

23:08
Sergio Tache
Oh, the old school stuff. Yeah.

23:10
Daniel Scharff
I think he had probably just come from CVS where he bought it.

23:13
Sergio Tache
But yes.

23:14
Daniel Scharff
Anyways, in my 13 year old eyes this was the coolest thing that ever happened. And not a day went by before. And bought Sumter car to obviously get on his level.

23:23
Sergio Tache
That's hysterical.

23:24
Daniel Scharff
Couldn't get the car, so at least I can get that druck car. And then I think from there probably just made my way through high school into some mid range ones. Nothing expensive obviously, but maybe some Calvin Klein like Obsession or I remember Hugo Boss I liked that was just, you know, not too expensive but seemed to smell pretty nice. And then yeah, I just occasionally would get into it but then kind of forget to wear it all the time. But yeah, I mean just seeing a lot of the data coming out about self care. And I live in the West Village and like half the stores on Bleecker street here are perfume companies. And so I just was like, yeah, maybe it's time for me to try to smell nice. I don't know.

24:06
Daniel Scharff
I think also I was always taught this way of putting it on which like you spray it and then you walk through it. But then I don't even think anyone could ever smell it. And so no one in my life had ever been like, you smell good. I'm like, well I don't need. What is the point of this? Like I'm trying to smell good or at least be, you know, that's validating. If someone tells me that I smell Good. So I think it was those things and then realizing, like, wait, maybe actually it's okay to wear more now and then. Yeah. I just had decided in my mind I was gonna buy one, and then I went and did that exercise I ended up getting, in case you're curious. Bulgari Wood Essence.

24:38
Sergio Tache
Oh, you went straight for the very fancy stuff. That's a great perfume.

24:41
Daniel Scharff
Thank you. I feel like coming from you, that is a good compliment to get. And, yeah, it's not cheap, but I also like that it comes in a little travel size, because I'm a man on the road a lot these days, but I actually get tons of compliments for it, and I really enjoy those compliments now.

24:55
Sergio Tache
It's nice, isn't it?

24:56
Daniel Scharff
Yeah, it is very nice. Okay, so anyways, bit of a tangent, but now everyone has gotten to know me a little bit here.

25:03
Sergio Tache
I think it's an important point. And I'll give you what. Not to bore the audience, but I'll give you what my 22nd history with perfume. I would always get them as a gift all the time. And it would generally be, like, for my birthday or Christmas, whatever, it'll be like a nice. Like a Gucci, like a nice bottle. And for me, it was always like, shit, man, I'm going out. Is this moment special enough to wear my special cologne? And because it was expensive, you know, and what I've noticed as a behavior, at least for our customers and even for myself, I mean, I have a ton of perfume now, obviously, in the office, but you don't think about it anymore. You just wear. Oh, you go to bodega. That's great. You know what? I'm going to buy you a sandwich. Wear perfume.

25:39
Sergio Tache
It doesn't matter. It's 29 bucks. And you get to smell nice and enjoy those products way more often because it's easy. And it doesn't cost you that much money. I think that's the thing. And you get to try different things. That's what I think we've unlocked with a lot of our consumers, and that.

25:56
Daniel Scharff
Is actually the trend. So I have shown a lot of these data slides to people, but last year, if you look at the top 10 categories that were actually growing in grocery fragrances was one of them. And when you dig into it, you're like, oh, okay. But we've had all this inflation, and there's like, premiumization of so many different categories. And the Nielsen IQ team, I was talking about it, they're like, no, that's not it. It's actually in the lower tiers it's more accessible stuff and the mists and all of that. So yeah, it seems like you probably caused a lot of that. And we're also just in the right place for that self care revolution to be hitting as well. So that makes a lot of sense.

26:33
Sergio Tache
You're spot on and I'm glad you brought this point up because it's an important point. Everybody sees the increase of the price points of luxury fragrances. At least people like perfume or in the industry. But the growth is coming from mass. You are 100% correct. I'm glad you brought that point up because there is something to be said at least in this industry. I'm curious how it applies to other industries, but in this industry where the affordability makes it, the democratization of the industry makes a big difference and brings new people into the industry that couldn't necessarily afford to be in that industry before.

27:08
Daniel Scharff
So I want to talk to you about retail, which we will in just a second because I'm really curious how that works for you. But first I just have to ask because I think probably everybody listening right now is like gosh, that was smart. What you guys did is incredible. Could that be done in other categories? What do you think? Could somebody dupe the dupes and take your approach to other categories, whether it's in beauty or do you feel like there's room for this in some of the other categories? Where would you be trying this if you weren't obviously just heads down, really focused on the fragrance space.

27:39
Sergio Tache
It has been done. Like take E L F for example. For those of you who don't know, ELF is a beauty company that do have a whole line of products and the beginning look of the company, they were very clear about what they were doing. They were just using the same formulation or roughly the same formulation as the big brands, but selling those products for less than 10 bucks. So this is not new. This whole cost and Alpha is like a multi billion dollar public company. They're huge. So this is not new. It's been around forever. There's a company called McCo Beauty from based in Australia. That's what they do too. So yes, you are seeing that develop into other industries and it's been going around for a long time. Yeah, absolutely.

28:22
Sergio Tache
I think that whenever you're going to have a high margin product and the brand is based on aspirational values and that's amazing by the way. Those brands have created fantastic universes. But where are you going to have that? There's always oftentimes there's going to be an actor saying, hey, by the way, I can do the same quality for less and give more value back to consumer. So, yeah, no, that has been around for a long time and if you can find another industry to do that, and you should absolutely do it because there's a lot of money to be made in that type of business.

28:49
Daniel Scharff
All right. And so speaking of making money, now let's talk about going into retail because obviously you had tremendous success direct to consumer found the messaging and the product that really resonated. But like a lot of people obviously saw that big frontier of retail and what would eventually lead you to being number one at Walmart, which is incredible. That's a huge feat. So can you just talk to me about how you took that decision, what kind of plan you went in with some of the learnings along the way?

29:15
Sergio Tache
Daniel I'm going to start by saying were so fucking clueless in the beginning. I'll stop by saying that. And my background has always been DTC and being around those people from Warby, from Harry's and those people really led the way for people like me in terms of the DDC world. So were very focused on that and it was almost like grimly negligent for us to not go into wholesale earlier. I do think there's something to be said about going to wholesale too soon. We can talk about that maybe. But what happened to us is we're very focused on ddc. Our journey was we created that brand online. That's how people knew us, especially on TikTok. So every time we'd have a new recruiter hire somebody new and they would announce to their former company, hey, by the way, I'm leaving. Oh, where you going?

30:01
Sergio Tache
I'm going to Dossier. The TikTok brand. So were known as, and still are known as the TikTok brands. We're very big on TikTok and TikTok shop. So that was our journey and how we created that brand for us and that's how we continue developing the brand for us. Wholesale was almost, it sounds shocking to say, but almost a fluke. We got an email on helposhee Co from somebody from Walmart saying, hey, by the way, I love your brand. We should talk. And the customer care team, I kid you not, sends me that email saying, hey, I'm about to delete this. I'm pretty sure this is a scam. But before I do that, let me just double check with you to make sure I'm like this. Can't be a scam. Why? And turns out no, it was actually somebody from Walmart.

30:45
Sergio Tache
We started off as a program, did well because we had done the work of creating that brand online, did very well in the Valentine's Day program and then they asked us to partner up and we started with 1400 doors and then quickly expanded to full rollout and now we have up to 32 SKUs in some of these stores. So it's been a big development. But when I tell you all this stuff, some of your listeners must be on there. Is this guy stupid? Of course he should have done wholesale. It's so obvious, especially in an industry like perfumery where trying and sampling is so important. So that's how it started for us. Obviously we saw the huge opportunity and we rolled out a Target and all the doors now. So we're redeveloping that relationship too and internationally too.

31:30
Sergio Tache
We're rolling out into a bunch of wholesales in Mexico and we're in Boots in the UK too. That's been the growth trajectory. And just to give you a sense of the numbers, wholesale online, actually still the biggest piece, wholesale is growing very fast though.

31:44
Daniel Scharff
I mean it makes a lot of sense to me. I feel like you would have such a strong fit with shoppers at Walmart and Target, especially just given how many SKUs they're interested to bring you on. And one thing I know about buyers is they really like it when they're talking to a brand they think is going to bring people in store. And getting to be the one who has such a hot D2C brand. Especially with so many SKUs, I'm sure that they were just over the moon. And can you just tell me a little bit about how fragrances work when you're doing wholesale going into retail?

32:14
Daniel Scharff
I know it a lot in like food and beverage space there are a couple main broad line distributors that you can use to get into stores or you can go direct or some high velocity products might have a direct store distributor. What is the supply chain typically like with fragrance? And was that a big learning? What are some of the big watch outs there?

32:34
Sergio Tache
So there's two pieces to the answer as one, the relationship with the wholesaler and two, the logistics piece. Let me go in that order. So number one, working with Walmart and working with Target, they tell us right off the bat, especially Walmart, they tell us we're not going to work with you if you don't have a broker. And what the broker does is that is your intermediary who's helping you with the relationship with the operations, especially as a new brand trying to get you settled in. Because the buyers don't necessarily want to deal with a brand that doesn't have a lot of experience in wholesale.

33:07
Sergio Tache
So the model for us is that at least when we talk to these big wholesalers is that we go through a broker who helps us out and that's how the discussions happen and that's how we develop the business in partnership with the broker. On the operations side, it was super difficult for us. As I'm sure you know, operations and logistics for a 3C business are very different than wholesale. The amount of venture you have to build, the amount shipping units, is not the same thing as shipping pallets. Your 3 PL is always going to say, our partner was amazing, but your 3 PL is always going to tell you, oh, we do both really well. No, they don't. They either tend to specialize in DDC and they tend to specialize in wholesale. And these are two different businesses.

33:52
Sergio Tache
And the way we had to think about inventory planning and demand planning, radically different. So I tell anybody my journey was DDC to wholesale. I'll tell anybody. Be careful what you wish for and know what you're getting yourself into. Because all of a sudden, just to give an example, I think the job of any founder and CEO is to make sure there's enough cash on the bank account. When you have a transaction online, you get paid immediately or two days later. Fine. When you sell at Walmart or Target, all of a sudden you gotta build a shit ton of entry. 30, 60 Days before they pay you. 30, 60, 75 Days. After all of a sudden, like shit, I've got to cover like four or five months of working capital out of my own pocket. That's not easy.

34:34
Sergio Tache
So tons of lessons learned in terms of cash management and working capital management, which I have a finance background, so I'm at least somewhat familiar with these things. And cash is very important to me. But if you're not, and if you're not familiar with these things, it can really trap you. You can have a very successful business, be broke and be very cash poor. So a ton of lessons learned, and I always sell to my fellow DDC founders is if you need any help to think about wholesale. I've made every single mistake on that you could possibly make and thankfully we survived. I could talk to you about packaging, how that transition from DDC to wholesale, we had to completely rethink the packaging. That was super challenging. So, yeah, it's just A different beast altogether.

35:16
Daniel Scharff
I am curious about that. What did you have to change on the packaging?

35:19
Sergio Tache
So basically our packaging initially was a very simple brown box, very elegant and cotton looked nice. But it didn't have the product name on it because we selling online. So why we do that? We had the same box for every single one of our perfumes because it made more sense economically to do it that way. And we thought the brand lived in a nice way. So it was a simple, elegant box. Oh, guess what? When you put a box in the name of the parchment shelves, it's kind of hard. So, you know, I remember we had that program with Walmart for Valentine's Day and in April they tell us, hey, by the way, we want you in line in August. Like, okay, that's great. So we had to put together a label and relabel a bunch of our boxes super quickly.

36:02
Sergio Tache
We had to design something in matter of days and weeks. It didn't look great, really didn't, but it worked. And you know how people talk about accumulating technical debt when your code is not and it's not enough. I felt we accumulated design debt because we used that same label for a long time. And we finally decided, okay, it's about time we actually change this packaging. Look, my goodness. Again, to anybody who's been in the wholesale game forever, again, they'll be asking, is this guy dumb? Like, of course. But changing that packaging was insanely challenging and difficult. So if anything, again, going back to advising anybody starting in DDC and going to wholesale, think very, very hard about your packaging. Because us DDC people, we think about it, but it's not the main priority, I guess. And it's a huge mistake.

36:50
Daniel Scharff
That is a great lesson. I wonder if there's anything else that would be a good lesson for earlier stage founders, regardless of what kind of a product they're working on. Like, it could be either a lesson you learned the hard way or it could just be something that you think you really did right? Like, yeah, that was one of the smartest decisions or investments we made to really scale the brand or just position it the right way for growth. Any like, key moment that you look back on like that would be insightful for people.

37:15
Sergio Tache
Yeah, I mean, I go back to basics. Number one, especially in the beginning, raise a focus on margins. At the end of the day, the formula is pretty simple. You have economics. The profit you make on selling a unit or an order needs to cover your fixed cost. It's pretty straightforward in terms of how business Runs. So be super focused on economics and be super focused on cash. Nothing of this is revolutionary and it all sounds like, oh, yeah, of course. And then you forget about it until the day, like us, we had 33 bucks on the bank account, literally 33 bucks. And you had to make payroll within four days.

37:53
Sergio Tache
Those are tough moments, especially when you're in a business that's super cyclical like ours, where we make a ton of our sales and profit in six to seven weeks, like from November 1st to December 15th. That's really our Super Bowl. That's when a lot of our sales are made, but especially online now, a bit less. With wholesale, it's a bit different. It evens itself out a little bit more. But still, like, again, going back to basics, make sure you are strong in cash planning. Again, I have a finance background and I got trapped by this, so I go back to that. Make sure you have enough cash because otherwise you just dependent on somebody's goodwill to fund your company and that might or might not happen.

38:34
Daniel Scharff
What did you do? I've never been in that situation yet, but my instinct would be like, okay, we'll sell a bunch of gift cards and we'll discount them or something, or try to get a bunch of pre sale, or either. Like, how do you even handle a situation like that?

38:45
Sergio Tache
We had to go back to our suppliers, say, hey, look, thank you for trusting us. But right now we're broke and the business obviously grow. You've seen the story because went from 0.5 million to 4.5 million to 25 million to 45 million. So growth story was there. They could see it. It's just that we hit this cash crunch. So it was a bunch of uncomfortable conversations with our partners. And by the way, when you have those conversations with your suppliers is when you really understand who's there to support you and who's like, not so supportive. Thankfully, our partners and the suppliers we're working with are very supportive. I'll give you one example. Alperfuma.

39:21
Sergio Tache
We had to have a conversation with them saying, hey, look, I know we're late, but this is why November 1st is around the corner going to make all this cash back. Don't worry, we got you. And the first thing they told me was complete understand you have enough inventory, do you need more stuff? And we'll give you more stuff just to make sure that you have a great Black Friday season and Q4 season. But that's a great partner right there. The first reflex is you have enough stuff. How can we help You. It's a bunch of uncomfortable conversations. And then one focus is making sure you can make payroll. That was really what we tried to achieve.

39:53
Daniel Scharff
That's a great story. Thank you. So, as we kind of wrap up here, I'm just curious, what is up next for Dossier? What's on the horizon? What are you focused on rest of this year? What are your big goals? What should we be looking out for?

40:06
Sergio Tache
The one thing we didn't talk about is our originals and the collections that we're launching, which we feel super excited about. The business started with our impressions. We talked a lot about that. About two and a half years ago, we started developing our own products, our own creations, and that business has been growing quite a lot. I'm very proud of that. So you might know him. We did a perfume with Machine Gun Kelly. So we developed his perfume. That's been a great success. We're about to launch a vanilla collection with a pretty big celebrity now in the summer, she's on a really successful TV show. So I'm sure when the name will come out, you'll remember this conversation. We're very excited about that.

40:44
Sergio Tache
But that's really the story we're trying to develop is we're trying to grow this originals business from zero to hopefully over 60 million in 2027. That's really the objective. And if we achieve this, and I hope we will, and I'm confident we will, if you were to take that business as an individual perfume company and forget Dossier, this would just be whatever brand, it will be an insane success. So that's something that we are really focused on. Otherwise, international expansion has been going well. We're very focused on that. We just go. We're quite large in Mexico, and now we're really entering the retail world, the wholesale world in Mexico, and focus on the UK with Boots. But if you're in the West Village, you should go to Elizabeth street in between Prince and Houston, where we open our first boutique.

41:33
Sergio Tache
We have two boutiques open, one on Elizabeth and one in Queens Plaza. So go check them out. They're actually really nice.

41:40
Daniel Scharff
I absolutely will. That's so great. I will check that out. I will try everything and then actually purchase it right there in the store instead of going on Amazon, where it won't be. So that sounds great. Cool. All right.

41:53
Sergio Tache
One more point, which I think is you talk about the purchase experience, and you mentioned how you bought perfume. That is extremely common. We saw a video, and that summarizes the Dots experience and being where people shop they said, I discovered the brand on Instagram. I went to sample and tried in Target. I bought something in Target, but then I bought three more on TikTok shop. That's the experience right there, where you got to be where customers are, man, that's important.

42:18
Daniel Scharff
I think probably also once people try you, then they have the trust. So then they'll just be open and interested in the different flavors. I think you could say that about something like poppy. Maybe you tried it somewhere once and you, okay, I like this flavor. So actually I am open to just trying their other flavors that are out there 100%. That's great. Well, Sergio, this has been super fun. I'm really excited for all of our listeners, but also just all of your and my friends to actually get to hear this story now that it'll be just out there in the ether for everyone. So I really want to thank you for coming on and just giving us the chance to hear all this and learn all about the fragrance world with you, which has just been super interesting.

42:58
Daniel Scharff
And I'm really excited to go and check out some of these originals as well, because I'm an original kind of guy and I need an original scent.

43:04
Sergio Tache
Let's go. Thank you so much for having me. It's been an absolute pleasure, first of all, reconnecting and second of all, chatting with you.

43:10
Daniel Scharff
Thank you, my friend. Well, my friends, we've now arrived together at the end of another episode of the Startup CPG podcast, the top globally ranked podcast in cpg. As you may know, we're not just a podcast. We're a community of brands and experts and you should join. You can sign up @startupcpg.com you'll then get an invite to our online Slack community. You're going to hear about amazing events near you, all of our special opportunities to get you in front of buyers, investors, brands and more. It's a free community. So what are you waiting for? I will see you there or on our next episode. Bye. Bye.