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by Felix Thea
Jonathan Propper built Dropps over the last three decades with the resolve to create a better laundry detergent for both people and the planet. From selling in brick and mortar clothing shops to leveraging TikTok for customer education, Jonathan shares what he’s learned about how to scale, market, and develop a product that sells.
For the full transcript of this episode, click here.
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Store: Dropps
Social profiles: TikTok, Instagram, Facebook, Pinterest
Recommendations: Klaviyo (Shopify app), Stamped.io (Shopify app), Recharge (Shopify app)
What Coke, Apple, and laundry pods have in common
Felix: You started this business back in 1992, which is very uncommon to see these days. Tell us about the evolution that the business has gone through over the last 30 years.
Jonathan: We did have phones in 1992, but not that many cell phones in those days–they were the size of bananas. We were just concentrated detergent in a bottle. We always cared about not shipping water all over the country. The water's in the washer, so the only thing you need to put into the washer is what's going to clean the clothes. Our product was concentrated, made of plant-based ingredients, and we sold it only where apparel was sold, sort of like shoe polish with shoes. It was a product for machine washing and drying cotton sweaters. The parent's name is Cot’n Wash.
The company continued to grow over the years. It’s still a modest company. Sales came in through an 800 number from the consumer—there was no website to speak of. It was very hard to develop e-commerce websites in those days. Around 2006, we developed a liquid laundry pod. That was an extension from this concentrated detergent we had. We knew that consumers loved our product, but they hated measuring and pouring it. We came across a technology for putting liquid in a dissolvable pouch. It was a patented technology, so we bought the patent.
Then it was time to rebrand it, and with the rebrand came Dropps. Dropps is an acronym for dissolvable, ready to use, organic pre-measured pod.
Originally named “Cot’n Wash,” the company rebranded to Dropps, which is an acronym for dissolvable, ready to use, organic pre-measured pod. Dropps
Fortunately it is a verb and it is a noun, so it had a lot of benefits as a brand. In the early years, since we were the first to develop the liquid laundry pod, it made sense for us to go retail. When you go down a laundry detergent aisle, it's just row after row of bottle after bottle. I call those bottles the most expensive bottle of water you can buy. We thought that by having a pod we would be like an Apple device on the shelf of all PCs.
Dropps was that way, to some degree. One of the things that we found out as a small player in a big world is that the system is somewhat rigged. It’s not that easy getting a position on the shelf that you want. You either get put on the bottom or the top of the shelf.
In 2012, Big Laundry, as I call it, came out with their version of the liquid laundry pod. With that, the company now had competition on the shelf. Competition is good in a certain way, because it makes the market larger. If you have two people going after the same thing, Coke and Pepsi, it creates a much larger soda market than if it was just Coke by themselves.
"Competition is good in a certain way, because it makes the market larger."
As a part of that we had some litigation, and we had to fight through that. In 2016, we were being really beaten up on the shelf. We say, "We have the most concentrated laundry pod out there." But the consumer's learning how to buy products online, and are buying into the benefit of companies like Dollar Shave Club and Harry's, that tell people how to buy on subscription.
At that point, we didn't have to educate people about pods, because we knew we had the best pod out there in the sense that it's the most powerful, it’s made of plant-based ingredients, and it has high efficiency in terms of cleaning. We don’t put in color, because color doesn't clean. It's the most efficient because it's nine grams versus the other 20 to 25 gram pods, which gives us a shipping advantage.
Then you look around, thinking of developing a website, and there's some really expensive solutions out there. Then there's some that are reasonable, and easy to use, such as Shopify. Shopify saved our business, because at that point, it gave us a good way to put all of our products on our shelf, rather than someone else's shelf, while displaying our products in the way we wanted to display them.
“Shopify saved our business, because at that point, it gave us a good way to put all of our products on our shelf, rather than someone else's shelf.” Dropps
We felt we needed to do an anthem video to drive the consumer to the Dropps page, and what we did was quite successful. Since that time, we've had 19 straight quarters of growth, and the apps that Shopify offers, such as Klaviyo and Stamped.io, and Recharge, integrate so well with the platform.
Shopify today is the foundation. We talked about all of our content, and that's the base of the tree from which Instagram, TikTok, and YouTube content grows. It’s an amazing platform. It's been the key to our business and our growth and the business model that really works.
As someone who's starting a business, thinking about starting a business, or putting their products online, you can't get any product out there that's more user-friendly and cost-effective than Shopify. I'm drinking the Kool-Aid, I guess, but it tastes really good.
Felix: Your journey began in the world of big retail, where it felt like things were rigged against you. What's your opinion about this now? Is it still as difficult to break into brick-and-mortar?
Jonathan: It's even more competitive today. The reason it's more competitive is because every day a retail store is closed, and every day you have a new internet shopper. That shelf, with shrinking sales coming from traditional brick-and-mortars, becomes a more competitive space.
When you sell to a big retailer, you deliver pallets to one of their DCs or warehouses. From that warehouse, they distribute to anywhere between 15 and 20 of their stores. Going to the buyer, one truckload of our product equals three truckloads of theirs. Which would you rather distribute? "Well, I'd rather distribute your product." "Okay."
I'm going to give you 30 points, and they're giving you 12 to 13. Which would you rather sell? "Well, I'd rather sell your product." Then, why don't you put me at least at eye level so someone could actually find us. "No, we can't do that. Because Big Laundry will take all their products out of the store if we do."
They're so dependent on those big brands, who are doing national advertising to drive people into the store, that it's really hard for the little guy to have a chance.
"In cyberspace, it's a more equal playing field. You can also tell your story."
In cyberspace, it's a more equal playing field. You can also tell your story. You walk down the shelf in a retail store, it's a split second. Especially, you may linger a little bit in the vegetable aisle, but when it comes to how much time are you spending looking at toilet paper, and figuring out what you're going to buy? You find something you like, you stick with it, and you might as well just have it delivered, rather than spending time and effort to go to a store.
What I'd say to any entrepreneur is, be successful in one distribution first. Don't try multiple distributions until you really licked one. Most likely, the one that's easiest to lick is the digital one, because you are able to present yourself in a way that you can tell your story. It's hard to tell your story at the big box retailer.
Propper advises, “be successful in one distribution first.” Dropps
Stepping away from retail and ‘going solo’ in a big, competitive category
Felix: Now, you started the business in 1992.When did you begin the transition to online?
Jonathan: We started selling them as early as 2006, with a Cro-Magnon man ecommerce site. It wasn't subscription-based at all. It was really just a stepchild, because we were in all these retailers, and we didn't want to be in competition with those stores.
Once we made the decision to say, "Ah, no more retail," then we could price our product the way we wanted to price our product, do a sale when we wanted to do a sale, and give money back guarantees and free trials to people. You can't do that when you're on the shelf. You'll have retailers upset at you that you're doing these things online and not giving them those same benefits. Once you leave retail, you feel very free.
It was a big decision, because you lose a lot of sales initially. But as I say, it hasn't stopped us from growing every quarter since. Clearly, it was the right move. Shopify has also really grown. It's continued to stay very relevant for us. We've moved to Shopify Plus, and that's fantastic. It gives us a dedicated person to work with us, and work through any kinds of issues we may have. With some of the applications that we have, the added cost of Shopify Plus is mitigated by the reduction in cost and some of those applications. You get the benefit without the cost, and it's been terrific for us.
Felix: You mentioned the cost of transitioning to online. Do you have any key learnings from this experience that you’d like to share with others who might be going through something similar?
Jonathan: I learned if you're in both channels of distribution, you have to be very cognizant of your pricing, and how one price change or one sale affects everything else. To the extent you are very clear and understanding what's going on in terms of pricing, so that you are not creating a competitor in the retailer, but you're doing it in such a way that they remain good partners for you.
Felix: You mentioned that competition is good because it expands the market. A lot of new entrepreneurs are hesitant to go into an industry that has large competitors, or are worried about new players. What has your experience been like with this?
Jonathan: We'd recommend going into large categories. There's always niches in large categories. We also recommend going into categories that are growing. Categories that are growing are likely to expand with that growth. When it comes to competition, you should always look at the big picture, what the big market is, and not what the small-market is.
Even though there may be some eco-friendly products that are plant-based out there that may be considered our competitors, I say to those folks, "We're not the competitors. Big Laundry's our competitor." Otherwise, it's just two bald people fighting over a comb. There is no point in going after each other when there's so much opportunity, and the consumer is always looking for more efficient, better, sustainable solutions. You should focus on delivering to that consumer, especially the consumers who are very concerned about sustainability, and what's going back into the earth.
One of the problems with a plastic container of laundry detergent is the cap has a different recycle than the bottle. And you're shipping all this water around. As I said before, the machine has the water. And you say, "Well, what do I do with it?" Because one recycles one way, the other recycles another way. You sort of give up. That's why almost 80 plus percent of products aren't really recycled. The consumer wants to do the right thing, but it's difficult.
We deliver to the consumer in a cardboard box that's compostable, so they don't have to think about it. It can either go in the trash, or compost. There's no residue. There's nothing left over when you finish a box of Dropps, because it's all pre-measured packets, and the liquid in the packet completely dissolves. We made it convenient for the consumer to use, and we also made it convenient for them to do the right thing, so that every Dropps can count towards saving water, plastic, and energy. We were always conscious of making it easier for the consumer, and that will always take priority.
Sustainability has always been important at Dropps, and it’s built into the core of their products and business. Dropps
The naked truth about sustainability—it’s a journey, not a destination
Felix: It sounds like sustainability is a huge part of your brand and mandate. When did that become such a core part of your business? Was it always part of your mandate?
Jonathan: We cared about it back then. That's why our actual detergent at the time, Cot’n Wash, was twice as concentrated as the other products out there. Since we were selling in a venue where you had someone helping you sell. In other words, the sweater was being sold, and then if you want the sweater to look as good as it does today a few months from now, use this product. They could then educate the consumer in that they only need an ounce of this product, rather than two to three ounces. Which was the traditional laundry detergent at that time.
Then we always had plants as a component to our formula. It's just become predominant now, and we use more natural enzymes now, for cleaning efficacy. We had that DNA.
I was at the first Earth Day, which was 50 years ago, in Philadelphia. It was a beautiful day, set on the hill in Fairmount Park in Belmont Hill. Politicians, Republicans, Democrats, all celebrating this glorious Park, and kickoff preserving the environment. There was no red state, blue state. There were Republicans and Democrats all for Mother Earth, if you will. Or Person Earth, today.
It’s in our company's DNA. Sustainability is not an end state, it's a journey. You never reach it, but you keep working at it and improving on it. With each iteration, if you make it better, then it's better. To your point, it wasn't as prevalent back then. It's something that has really gained momentum with your generation, not even necessarily my generation. My generation wants its legacy, it wants to leave a good place for its children and grandchildren. It has that importance. Something’s causing what's been happening with our environment: the fires, weather, and everything else. If we can do things to mitigate those causes, we'll be around a long time.
Felix: This shift happened basically during the lifetime of your business. Were you surprised by the growth of the awareness?
Jonathan: It's funny, because we did a video called “The Naked Truth About Laundry.” That idea came from the movie “The Naked Truth,” which was about the environment. What was a footnote in the news is now a headline, because it's affecting us. Unfortunately, people may have talked about it 20 years ago, but they didn't necessarily consider it a threat. Once your forests and your homes start burning down, or flooding, it becomes real. Unfortunately it takes catastrophic events to get people to change.
Customer education has become a key part of the Dropps content marketing strategy. Dropps
Balancing sustainability with product efficiency
Felix: There must have been a shift in consumer behaviour at some point. Did you have to do any education for your customers regarding your product?
Jonathan: It's just practical. We're not judgmental. There's obviously things we do wrong, there's other things I do wrong in my personal life, too. Someone might say, "That's not the most sustainable way to do things." If we all do something, or if we're all at least conscious of it, then it will be better, and there will be improvement. Today it's very much a part of everyone's conversation.
Felix: Sustainability is trending more these days, so much so that it’s almost created a lot of consumer skepticism. Have you had to work harder to convince your consumers of your genuine sustainability intentions?
Jonathan: My view is that cleaning efficacy and sustainability are not mutually exclusive. At the end of the day, we have to perform as a product. We have to clean laundry, and dishes. If we're not doing that really well, then it doesn't matter how sustainable you are, to your customer. Fortunately, we have ingredients and tools that are more sustainable, and can make better products.
It may cost a little bit more, but if you use them enough, they'll then become more mainstream, and those prices will eventually go down, because of the buy-in that's involved, and the fact that the consumer is drawn towards those types of products. We're just trying to show how we do it, and how we think it might be a way of saving water, saving energy, or avoiding waste from bottles that take two weeks to use, and a lifetime to degrade.
It's just giving them new tools. If they have better tools out there, we're going to look for those. But again, it's got to work in a way that’s not dramatically changing consumers' behavior. You’re leading them rather than trying to hit them over the head with some sort of new way of doing things.
You need to give them a path that's easier than the old way, while somehow using less water or energy. That may not be environmentally conscious, but your water bill's lower, and your energy bill’s are lower. That's equally important to the consumer.
Felix: The usefulness of the product is still, for the most part, the most important thing to get right. Has consumer behaviour supported this belief?
Jonathan: I think so. There are people who are driven just by the sustainability message. That may create trials, but it doesn't necessarily create repeat purchases. They're going to be frustrated if it doesn't work well. They're going to say, "It's not clean, so I'm not going back." As I say, I don't think they're mutually exclusive. You have to spend a little bit more time and money to develop something that's better, but you'll be rewarded for it.
Felix: What does your product development process look like? Walk us through how you develop new products.
"In any business, talking to suppliers and to your customers is really important."
Jonathan: In any business, talking to suppliers and to your customers is really important. Listening to both. Listen to what they not only like about your product, but other products. Listen to your suppliers about what's the latest in terms of the technology that might be out there. In the Chicago facility, we have a full laboratory. Banks of washing machines and automatic dishwashers, all to develop and test products over and over again.
We want to make sure what we're passing on to the consumer meets our guidelines in terms of cleaning as well or better than the leading brand in that category, and has a much better chemical formula profile, ingredient profile, as well as reduced packaging. All of those things are engineered to the design process of developing a product.
The bulk of our business is in laundry pods, including skin sensitive laundry pods, and pods specializing in stain and odor. Our main focus essentially is active wear, because all this active apparel takes on odors that we call a permastink, that's hard to eliminate. Then we have accessory products, Oxy boosters or softeners. All of these products go through rigorous testing and development. Our softener is very different from other companies' softeners. It actually softens the fabric, rather than leaves a slick coating on the fabric. That's why towels over a period of time sometimes take water off of them. Our softener actually allows them to still absorb water. All of this is investing in ingredients, products, and packaging that have been informed by insights from the consumer and suppliers, to develop better solutions.
What's sort of interesting is that the two main narratives are laundry and dishwashing. They're both machines. A lot of household products won't be put into a machine, but our two new products are being put into the machine. If your clothes aren't clean or your dishes aren't clean, you probably need a new machine. It's not our product. A lot of people think that because they’ve got $1000 invested in their machines, and it's not clean, it's obviously the product. In our case, we know it's the machine.
Dropps also makes dishwasher pods, and one of their most successful pieces of content shows customers why it’s better to wash hats in the dishwasher. Dropps.
Why “how to” videos are the key to boosting organic rankings
Felix: Do you have to focus on educating consumers on how to properly use the product?
Jonathan: No question, and that's why the Shopify platform is great too. Content and developing content is everything. Videos, and how-to videos, because consumers really love how-to videos. They're on the go, they're on their phones, it's very easy to watch a short 15 to a minute video.
One of the most popular pieces of content for us is how to wash a baseball cap in the dishwasher rather than the washing machine. People are fascinated by that. The temperature of the dishwasher gets much hotter than your washing machine, and your hat takes on a lot of bacteria when it's worn several days in a row. Content–specifically videos–which then work off of the Shopify platform, and go to TikTok, Instagram, Facebook, and YouTube. All are really important for the consumer.
That's what brings me back to the brand. That's how we can distinguish ourselves from the typical retailer. We'll tell you how to take care of a cashmere sweater, as opposed to some bot answering your inquiry. All of which are part of the development story, and developing a brand. The how-tos in all categories are really eaten up by the consumer. They want to know.
Felix: Creating content like that, where you’re providing answers directly for peoples’ general inquiries is a great opportunity to capture new customers.
Jonathan: It's a problem, and you’re solving a problem on Google. Usually they're also on the Amazon platform. In a lot of places people search for products on Amazon, but they search for products to resolve their problems on Google. It's very much what drives people to the Shopify or the Dropps website.
Felix: How do you come up with the content you’re producing?
Jonathan: One of the pieces of content we produced confronted the great controversy of how to load the dishwasher. Are the forks up? Are the forks down? Are they together? If you talk to a bunch of people and you hear the things that they debate over, that helps drive content. You get a lot of customers who come to you with a problem, and when you see a number of the same problems, you should develop content around that.
Felix: Where do you suggest listeners go to find inspiration or ideas for their content?
Jonathan: YouTube is great for content solutions, in a lot of cases. Both for our own videos, and for our partner influencers who developed videos on YouTube. The good thing about YouTube is it's there for a long time, whereas an ad on Instagram or TikTok comes and goes. As a platform for education, we may not be as effective in initial performance marketing. But YouTube has a longer tail to it. That's why it's important, I would recommend repurposing by creating content that will sit on YouTube, and that over time will get watched.
Dropps uses their blog as a jumping off point to repurpose content across different platforms. Dropps
Repurposing core content across different channels
Felix: You mentioned repurposing content. What’s your process for repurposing your core content into smaller snippets for other platforms?
Jonathan: It does have to be in a form that the viewer can watch it. The basis of it is a blog, and the blog is hosted on the Shopify platform. That's the base of the tree from which all the branches grow, in terms of social media. Shopify's really created this great sturdy base from which to send out all this information. Yes, it has to be in different formats for the different venues or channels, if you will, but it all comes from the Shopify blog.
Felix: One thing I encountered with another entrepreneur was how willing users on TikTok are to consume educational content. Have you had the same experience with TikTok?
Jonathan: There's all sorts of different categories, but 15 second information pieces on TikTok are very effective. It's not something that you get right away, but you just have to be prolific at it. High frequency but short in length. It’s a little bit like throwing spaghetti against the wall, certain things will stick, and over time, they’ll stick in the mind of the consumer that this is information coming from a source that knows about this category, and knows about these products, or knows about my problems, as they relate to active wear, or getting my white sheets really white.
Felix: A lot of brands are cautious about being too pushy in their call to action, however at the end of the day, the goal remains to convert leads. How have you balanced those two initiatives when it comes to TikTok?
Jonathan: There's not as much call to action with TikTok. It's more of awareness and information. It may become one, but it's not a particularly transactional platform. At the moment it's just getting the message out quickly, in a fun way.
"Everyone learns differently. You need to display the same information in different ways, so that you're including everybody in that journey."
Felix: Another unique thing that I noticed when viewing your social channels was your use of infographic educational content on Instagram. Has that worked well for you?
Jonathan: People are visual, but they also need words. Everyone learns differently. Some people aren't looking at their phones and are just listening. Other people are looking at their phones, and it’s the images that educate them. You need to display the same information in different ways, so that you're including everybody in that journey.
Felix: You mentioned Recharge for the subscription service that you provide, and Stamp.io for the reviews. Are there any other apps that you rely on heavily that have been impactful for your business?
Jonathan: Yeah, Klaviyo, for email. And then Shopify plus Flow feature, which lets us test various things at checkout without it having to be live. Those are the apps that we're using the most.
Felix: Were there any iterations or changes that you made to the website that made a notable difference in sales?
Jonathan: You need to audit your website regularly. You may have some apps that are running on the website that may be slowing the website down. Speed is very important for the consumer, in terms of loading time. Secondly, use tools to do the up-selling, and the cross-selling at checkout.
Make sure that the apps that you're using are integrated into your business, and aren’t affecting your speed in terms of delivering pages to the consumer. Be cognizant of speed both on mobile and desktop.
Felix: What is the biggest challenge that you or the business is focused on solving over the next year?
Jonathan: The change of iOS has certainly impacted all direct-to-consumer companies, as they're ready to do performance marketing as efficiently as they once did. Necessity becomes the mother of invention, and therefore everyone's experiencing that same thing, so you have to look for other ways to reach the consumer with your content and with your messages. That event this year has posed one of the greatest challenges.
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