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HOW CARBON BEAUTY IS REDEFINING CLEAN ON AMAZON

November 30, 2020 BeautyMatter
November 30, 2020
Carbon Beauty

In just over six years, Carbon Beauty has grown to be one of the largest beauty retailers on Amazon today, with an assortment of 70+ brands and sales projected to hit $15 million this year. The business was started with a mission to redefine clean beauty on Amazon by tapping the tremendous potential of Amazon with a simplified partnership model built around having skin in the game, investing in the growth of its partners while providing access to tailored Amazon infrastructure.

This is a business that walks the walk on both partnership and sustainability. Dan Sudman, Carbon Beauty’s CEO and co-founder, spent the past year collaborating with Kate Bezar, founder, The Better Packaging Co., and LOLI Beauty founder Tina Hedges developing packaging solution orders placed on Carbon Beauty and fulfilled through Amazon that met LOLI’s zero-waste mandate.

BeautyMatter caught up with Sudman to talk all things clean beauty on Amazon.

At BeautyMatter we’re big believers that context and backstories are important in framing conversations and information. What was the impetus for starting Carbon Beauty and the opportunity you set out to capture?

We initially set out to create an e-commerce platform for natural beauty and wellness products that diverged from the prevailing “earthy-crunchy-granola” aesthetic at the time. Most retailers were continuing to use the same cookie-cutter website layout, and we wanted to reimagine clean beauty through a more modern, curated, and constantly evolving platform. Around the same time we launched the Carbon Beauty website, we noticed many brands were actively avoiding Amazon due to its stigma of chaos and poor representation of luxury/niche products. Other brands were selling on the platform either through their own storefront or via a traditional beauty retailer, with both strategies yielding poor performance and failing to effectively tap into the massive Amazon Prime customer base.

We quickly shifted gears and decided to devote most of our bandwidth to redefining clean beauty on Amazon. We sought to address both of these core issues in allowing brands to fully tap into the tremendous potential of Amazon through a properly optimized presence on the platform, while also crafting each brand’s presence to ensure its brand image and integrity were preserved.

It was a huge uphill battle convincing brands that Amazon was a viable platform for their products six years ago. I remember that as soon as I introduced Amazon into the conversation, there was a palpable shudder on the other end of the line. To completely reframe the notion of Amazon in the minds of these brands was extremely challenging, but as soon as a few brands took a leap of faith with us and were generously rewarded as a result, it became increasingly difficult for other brands to pass up the opportunity of achieving such compelling growth on Amazon through Carbon Beauty. Fast-forward to today and we have over 70+ exclusive clean beauty partner brands on Amazon and are continuing to onboard fantastic new partners each week.

You are known in the beauty industry for your clean beauty focus on Amazon, but you also have an e-commerce platform of your own. Can you explain your business model and how you work with brands?

When developing our business model, we knew that we had to eliminate the chaotic representation of brands that permeated the platform, and it was immediately clear to us that exclusivity (i.e., having a sole representative/reseller on Amazon) is the optimal strategy for these types of brands. However, even as brands were beginning to establish some degree of exclusive representation on their own, it seemed to solve some issues, but it didn’t solve the issue of poor sales performance. Brands would launch on Amazon, eager to tap into one of the largest customer bases in the world, and … crickets. Perhaps a sale here and there, but nothing close to what they should have been generating.

Other brands faced similar issues in being sold on Amazon by traditional beauty retailers who had flocked to Amazon without necessarily knowing how to properly execute on the platform, also resulting in lackluster performance. This presented us with an opportunity to rethink what was necessary for brands to truly thrive on the platform. Ultimately, we partnered with one of the leading Amazon retailers in the world with over 15 years of operating expertise on the platform, access to streamlined fulfillment and operations tailored specifically to Amazon, and an Amazon model that could outperform every other beauty retailer on the platform.

Brands in the beauty and wellness category haven’t exactly been early adopters when it comes to Amazon—they had their sights on the beauty category, and they have become too big to ignore. For those brands still sitting on the fence about Amazon, it feels like the COVID crisis has opened the floodgates. From your perspective, do you think all brands need an Amazon strategy? And what should brands consider when evaluating the Amazon opportunity and creating a strategy?

COVID dramatically reshaped the retail landscape, which put many brands in the position of answering the question, “Why am I not on Amazon?” For many of these companies, the answer was they still felt their brand was largely incompatible with Amazon and they simply could not reconcile the notion that Amazon could properly convey their products in a manner that would not somehow tarnish their integrity. Such brands are perfectly justified in this reasoning … until they come across Carbon Beauty. Beyond the question of why they are not on the platform, the more pressing question then becomes HOW do I get on the platform in a meaningful way. Such questioning has led to us signing dozens of new partnerships over the past few months—more than any other period in our company history—as a result of brands hearing of our Amazon partnerships and successful track record as a leader in the clean beauty space.

Of course, there are brands for which Amazon may not make sense in their online strategy, whether it is a desire for highly selective/exclusive distribution or a singular focus on DTC; it’s always a matter of calculating the opportunity cost—I just hope brands do not undervalue Amazon’s true potential when doing so.

Often one of the biggest concerns for luxury and prestige brands is the perception of Amazon on other points of distribution. Where do you think Amazon fits in the overarching retail landscape, and what should its role be in a brand’s distribution plan?

When onboarding new partners, a question that sometimes comes up is whether they should expect any backlash from other top retailers in having their products featured on Amazon. Our partners are sold across virtually every major online beauty retailer without any issues, and the reason for this is how the products are sold on Amazon.

If your products are sold on Amazon in the typical chaotic fashion, where they are offered at a steep discount by unauthorized retailers using poorly crafted product pages, I would absolutely expect other points of distribution to be concerned. Since these are precisely the issues we address for our partners, we have never been in a position where another retailer found our partners’ Amazon presence problematic. If anything, we create greater stability for online distribution in ensuring our partners’ products are well represented, all while effectively targeting the Amazon Prime member customer base in an effort to avoid any cross-platform cannibalization.

A successful Amazon presence also makes clean beauty products more accessible to a wider customer base. Any retailer considering leaving out Amazon from their distribution strategy should also consider which customers might be neglected as a result.

From a timing perspective, when should a brand launch on Amazon? Your current assortment is comprised of 70+ brands and consists of some of the hottest and most innovative indie brands in beauty and wellness like Herbivore, True Botanicals, The Nue Co., and ILIA. What do you look for in partners and what’s your criteria for vetting brands?

Beyond being aware of the overconfidence biases and planning fallacies that we all easily fall prey to, or having the necessary infrastructure in place to meaningfully launch on the platform, brands should realize overnight success on Amazon is somewhat rare. Amazon is more of a cumulative platform than many people realize, and running out of stock for a long period of time can be much more devastating to a brand’s sales momentum relative to a regular retail site. Product reviews are also a crucial component, and yet Amazon has made them significantly more difficult to generate relative to previous years. This consequently limits the conversion rate of your advertising campaigns and slows growth. Rather than going from 0-60 right at launch, brands should expect an initial period where they are deeply focused on building a solid foundation that can survive future growth/scaling.

Since we have a large number of partners in the clean beauty space, we are actively looking to fill gaps in our assortment in partnering with brands that offer something unique. Brand curation was important to us since Day 1, and given the fact that we are seeing an increasing number of customers cross-brand shop our Amazon store similar to a traditional retail beauty site, a rare behavior on Amazon, it’s imperative that we offer these customers the very best of clean beauty.

With the growth of Amazon in the beauty category, there is a whole industry that has cropped up around the marketplace. What differentiates you from other solutions available to brands to partner with in building their Amazon business?

It’s definitely challenging for brands to sift through the number of Amazon-related companies popping up. When we started our exclusivity model 6.5 years ago, it was essentially unheard of in the Amazon beauty space. Now our partners get emails on a daily basis from companies asking to be their exclusive Amazon representative.

The quickest way of sorting through the nonsense is to ask for numbers. Numbers don’t lie. There are plenty of companies willing to make ridiculous promises to brands that they will grow their sales by X in Y amount of time, but at the end of the day if they don’t have a successful track record of doing exactly that for other reputable brands, you know it’s all talk. I am always hesitant to provide firm sales projections to new brands if we do not have suitable comps available. Brands have grown desensitized to the sleazy car salesman’s pitch to the point where they are no longer taken in by the false promises, but nevertheless fully expect such promises to be made.

I’ve found myself in a position where there simply was not enough supporting data to make an accurate sales projection for a particular new brand. The brand was in complete agreement. They recognized the high degree of uncertainty, they fully understood it made perfect sense that given this level of uncertainty, any sales projection made would be extremely unlikely to be accurate, to which they then eagerly followed up with the question, “But if you had to use a number, what would it be?!”

In a little over six years on the platform, we have grown to be one of the largest beauty retailers on Amazon today. We have been able to achieve this by consistently outperforming all other natural beauty retailers and brands on the platform while offering a simplified partnership model built around having skin in the game. We invest in our partners’ growth while providing access to tailored Amazon infrastructure with unrivaled efficiency. We are constantly looking to redefine clean beauty on Amazon and our partners have found tremendous value in what we’ve built thus far, which is why they continue with us on this journey as we accomplish new feats previously not thought possible on the platform.

What are the biggest trends in clean beauty on Amazon now and what trends do you see bubbling up?

Our clean cosmetics and haircare categories have been exploding. I think it’s extremely difficult to compete with a haircare brand like Innersense, which has been in the space for a while and knows how to execute, and so I expect increased dominance of these types of brands as the clean cosmetics and haircare segments continue to grow.

As far as trends bubbling up, while I don’t see the wellness/supplement category ever going away, it’s clear many of these brands are forced to reinvent and diversify themselves to a far greater degree than other categories. This is likely due to the lack of good supporting data behind the ingredients used. Many wellness brands, unfortunately, cherry-pick data from junk science, which places an unrealistic burden on customers to validate studies and data, which they are often unequipped to do. Meanwhile, the promised results unsurprisingly fall short of what’s advertised. For these reasons, we do our best to feature partners that use quality clinical data and more scientifically sound claims.

Unlike with specialty beauty retailers, there is no clean certification to help consumers navigate the beauty category on Amazon. How can brands ensure conscious, clean beauty consumers find them?

Since Amazon does not currently have a dedicated category for clean beauty, it’s essential for brands to clearly convey this information in the product titles and descriptions. I often see brands get carried away with their SEO efforts, which results in unbelievably long product titles that are completely overwhelming (visually). SEO and ad campaigns are undoubtedly critical, but most brands seem to forget there are humans on the other end. Many brands don’t realize they should be viewing their content through the same lens as the customer. No one wants to read a giant block of text, and there are certain thresholds where customers are more likely to simply keep scrolling when faced with visually overwhelming information. If you’re not thinking about the underlying psychology of customer behavior/navigation, you’re not properly considering your customers, and missing out as a result.

By far one of the most surprising customer behaviors we have encountered on Amazon is customers shopping our Amazon store similar to a traditional retail beauty site. Amazon is most commonly used as a shopping search engine of sorts, and so it was quite bizarre to see an increasing number of customers shopping across different brands on our Amazon storefront. A customer who shops for Herbivore, Innersense, ILIA, The Nue Co., or any of our other exclusive partner brands, is more likely to come across and purchase from our network of partners. I’m sure this behavior previously existed to a small degree on the platform, but with our introduction of the exclusivity model and growing network of partners, we were seeing it on an entirely new level.

What’s in store for the future of Carbon Beauty?

I think 2020 made us a better company as it forced us to confront potential vulnerabilities, whether it was restructuring and diversifying our fulfillment operations or becoming more adaptable to rapid changes; we will be entering 2021 with even more advanced infrastructure and a growing list of fantastic new partners. This allows us to continue to expand into previously uncharted territory when it comes to Amazon in offering our partners exciting new opportunities that otherwise have not existed on the platform under traditional selling models.

I recently read an article where Romain Gaillard, the CEO of The Detox Market, said the thing that keeps him up at night is Amazon. This is for good reason. People are always afraid of what the future holds, and it has become increasingly clear that the future of retail is Amazon. What’s most astonishing is that we are likely just beginning to scratch the surface.