237 | Navigating supply chain issues & product expansion with Alex Gagné, Chez Gagné

The expansion of your business into wholesale and even new product lines can create exponential growth for your brand, but with that growth comes struggles. In today’s episode, Alex Gagné of Chez Gagné joins us to share about her experience with supply chain issues over the last couple of years, how that created a cash flow issue for her team, and how product expansion unexpectedly saved her business in 2021!

Since Alex last joined us on episode 106, she’s added to her team, expanded into new product lines, and grown the wholesale side of her brand to contribute to 96% of the revenue in over 3500 stores. This opened the doors to product expansion as well! Chez Gagné went from a small space in Alex’s studio to storage units and now in a large warehouse.

With this growth comes a lot of responsibilities and issues, especially with supply chains. We all saw major supply chain issues beginning in early 2020, but those issues aren’t just limited to the pandemic. When you’re running a wholesale business, there are so many things to consider and potentially be prepared for—sourcing supplies is one of those things.

Taking Risks in Product Expansion

It’s often recommended to stick with what you know in your own niche and industry, but as business owners and product creators, we have the opportunity to take risks in other areas of the industry. Alex knew that she’d always wanted to expand her business from greeting cards into the gift and lifestyle space. As part of that expansion, she decided to move into the bath product space.

Bath products were something she was passionate about, knew she would use, but also knew she would gift the products. Considering the trendiness of bath products, she also knew that she wanted to do them right by offering clean, all natural beauty products.

This new venture opened the doors to hand sanitizers in 2020 and shower steamers in 2021. With this project being a huge undertaking and a major investment in the business, Alex knew she would be taking a risk.

Budgeting & Planning in Product Expansions

While it’s not always easy to plan and budget for product expansions, the understanding of your finances and cash flow will help guide your decisions. With the existing clientele of Chez Gagné, Alex knew that this product line expansion would align well with who was already buying their products.

The issues with budgeting and planning for how much or when new products come along are impacted by a multitude of factors, including supply chain issues. It’s common with wholesale product lines to not be able to keep enough supply on hand for your products, which places limitations upon what you’re able to secure and sell.

If you’re planning to expand or grow a new product line, consider the supplies you have on hand, the minimums you’ll need to place for new supplies, and prepare for a period of trial and error.

Trial & Errors in New Products

New product lines open the doors to new creativity and sales, but are often met with a period of testing that you have to go through to get everything just right. This has been a large component of Alex’s venture with bath products at Chez Gagné.

After introducing shower steamers to the business, she’s run into a number of issues with chemical reactions! From box dyes bleeding to coating on designs coming off, the unexpected issues are still being managed. The worst part is that Chez Gagné is eating the cost of these mishaps with the new product line. This period of trial and error is something to expect when planning for new products in the business.

Supply Chain Issues

While expanding your brand with a new product line does bring a lot to think about, another one of the most important things to consider is supply chain issues. Chez Gagné has first hand experience of how this has impacted their brand in a variety of ways beginning in 2019.

At the end of 2019, they saw a glass shortage in the industry from their suppliers. Once that was resolved,, the pandemic hit and their US supply warehouses didn’t have enough workers handling the quality assurance of the products they were sending out. That’s when they had to explore options overseas. In 2021, they invested in custom glass molds, then placed an order in April of 2021 to arrive in September (to arrive in time for the holiday season).

The first shipment ended up offloaded onto a port due to a boat breakdown, where it stayed for months. The other two shipments from 2021 never arrived either.

With hundreds of thousands of dollars invested in these supplies, this created a massive cash flow issue for Chez Gagné. Without the supplies for a major component of their holiday products, the shower steamers project ended up saving their business in Q4 of 2021.

Then in 2022, all three shipments of the custom glass bottles arrived within a 5 day period, where the team at Chez Gagné had to manage the unloading and storing of roughly 60 pallets of this product, which they weren’t prepared for, nor had the space for.

Despite the supply chain issues that Chez Gagné faced in 2021, they still ended the year as their best year yet. They attribute their success in 2021 to growing their business accounts in new stores, expanding into bath products, selling on Faire, and having a solid foundation for the business.

It’s important to note that while there may be a lot of brands in the market, you can set yourself up for long-term success by having a foundation based on trust and experience for your brand. When you’re building relationships and making a name for your business, it opens the doors for more success.

Today’s episode is brought to you by Paper Camp, where we’ll help you launch or refine your wholesale line so that you’re selling your products to retail stores big & small.

If you enjoyed today’s episode and are ready to add trade shows to your business plans this year, make sure you’re on the waitlist to join us at Paper Camp!

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Important Sections in Today’s Episode:

Growth at Chez Gagné (3:25)

Supply Chain Issues (9:08)

Product Expansion Trial Period (17:30)

Bath Products at Chez Gagné (20:30)

Solid Foundation in Business (26:54)

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MEET ALEX:

After working in PR and Software for years, Gagné pursued her passion for paper and started Chez Gagné in 2014. If you can’t make it nice make it funny is how Gagné leads her life and her brand. Incorporating life’s everyday experiences and all of her favorite things, Chez Gagné has morphed into a modern lifestyle gift brand featuring hilarious drinkware, candles, stationery, office and a new foray into the bath space. In her free time, Gagné enjoys traveling, hiking with her doodles, cooking and spending time with her daughter Jonni in sunny Southern California.

CONNECT WITH ALEX

Website: chezgagne.com | Instagram: @chezgagne

Connect with Katie Hunt

Katie Hunt is a business strategist, podcaster, mentor and mama to four. She helps product based businesses build profitable, sustainable companies through her conferences, courses and coaching programs.

Website: prooftoproduct.com | Instagram: @prooftoproduct