Vikrant Host

Welcome everyone to Execution at Scale. As you know that this series exists because most conversations happen over coffee or over beer and not on the stage. So today we have Kelly with us who's founder of Villager Puzzles and she was kind enough to give me one when we met a few weeks back. Me and her are both together in a tech which is now Vistage Group and it's a very interesting concept. We'll get to know more about it but right now what I'm going to do is introduce Kelly first and most of my guests so far have been on the other side so more like on the operations like 3PL, Logistics etc. And today we have Kelly who's a brand owner and scaled this over the years so it'll be good to hear from the other side of the story. So just for context Kelly started Villager Puzzles in 2023 because she could not find modern well-designed jigsaw puzzles for her own evening wind down. And the brand works exclusively right now with Canadian women artists who earn uncapped royalties on every puzzle sold and in just over two years Villager Puzzles has sold more than 200,000 puzzles and gone from one car garage operation and being present in 800 retail locations across Canada. And now over to you Kelly. Congratulations first of all that's a pretty unique business you have built and a very successful business over last I would say like about three years. So welcome and thank you for your time and anything you would like to add which I missed.

Kelly Striemer Guest

I think you you got the gist of it so we make old school jigsaw puzzles and people have a chance to sit down at their table at the end of the day and unwind without a screen and so we see a lot of people who are pursuing more analog hobbies these days and then also just ways to connect with people to sit together and do a and so it's been a really wild three-year ride.

Vikrant Host

So very interesting so I'm curious like what was your sales channel in the beginning? Was it like we're running ads or was it more like word of mouth or how did you get through those first batch of puzzles?

Kelly Striemer Guest

Yeah so the first like initially so my my plan was always to go into e-commerce and and wholesale. I wanted to do both because my theory was is that you know because it's more analog hobby I didn't think that the shopping for it was just happening exclusively online and so before I even launched I actually started my social media and started creating a bit of a community around it which we now call the village but I would ask them for feedback about art. I would ask them for feedback about puzzles, about the box, about the package design and just weigh topics with people who were invested and the puzzling community is actually really engaged and I discovered a lot of people through social media that ended up being early customers.

Vikrant Host

That is amazing, that is wonderful like you know building the community and like it is very interesting to know that there's a puzzle community and I will follow the village community as well. So can you like walk us through like you know the last three years at a very high level that what were the inflection points, growth points, what were some of the like high level challenges like you know you faced and how you overcome that like you know how you overcame those challenges?

Kelly Striemer Guest

Just trying to figure out what the right amount of inventory to carry was. So when we first brought in you know the 3200 puzzles about two weeks after I launched we had a TikTok that went viral and so for a brand new brand that's getting you know a handful of orders here and there we suddenly got 100 orders overnight and so that was sort of like okay I think there's I think there's something here and then we a couple months in we sold out of most of our inventory and as you can imagine that was probably the worst time of year. We sold out around November and so Q4 is so busy and so much of the puzzle sales happened during that quarter so I ended up you know air freighting in some some last minute puzzles in order to meet the demand that I had for that holiday season and I took that learning and I ran with it so when we came out with the next collection in spring you know I definitely had more inventory and as we went into that second year I started doing wholesale trade shows and we were moving from having a couple of dozen retail stores you know getting into 100 and 200 locations mostly in western Canada and I definitely by that point was like okay we have something that's working here.

Vikrant Host

Yeah I think I must have been a crazy journey I'm sure like you know scaling up like that and like that brings me to my primary question which I was like you know most interested to ask so like you said that you started in garage fulfilling orders yourself. What made you like move to a 3PL and you recently moved to a 3PL based on our previous conversations?

Kelly Striemer Guest

Yeah so I had worked for a couple of businesses in you know my previous career that used 3PLs and so I was I knew what it was I knew why why it was needed but for my own business I definitely you know had the intention that I'm gonna start this out myself I'm gonna fulfill this myself and the volume just got to be difficult to manage. I ended up hiring somebody part-time in the community who would come to my house and pack orders with me a few hours every week and that was great but I very quickly realized that that wasn't going to scale. So the big turning point happened about a year and a half in we launched a new collection for spring and we had just come out of a trade show season and I packed puzzle orders for seven days straight probably about 10 hours a day and I was like this is the last time I'm going to be able to do this because spring is light in comparison with so I knew that by the time fall of 2025 came around that I needed to have a 3PL or I just wasn't like it wasn't going to be possible.

Vikrant Host

And like how was that research like you know like you have worked with other businesses in the past who use 3PL but like dealing with a 3PL like work did you like I guess like go through like seven eight different options how was your experience in terms of how they were pricing you and all that?

Kelly Striemer Guest

You know having been on the marketing side of the business I didn't I knew that there was like a pick and pack fee that I hadn't you know dive deep on any of the numbers so I reached out to a former colleague who had worked on the operations side of the business and you know you use your village like you do for a lot of things you need some insights in order to get you started and so you know he was able to kind of give me some guidance as to how the the costing structure was going to be and then also gave me some leads in terms of who to reach out to where there was some existing relationships or you know somehow through you know the network and so I reached out I think I ended up connecting with about five yeah I think five 3PLs looking at different options in Vancouver area, Calgary, Toronto and then you know went through the process of figuring out what was the financial impact of

Vikrant Host

And like what were some of the decision making factors because like you essentially distribute all across Canada and I'm assuming your products come into the Vancouver port or

Kelly Striemer Guest

Yes

Vikrant Host

And then like so that's the initial point you are here so those are two points I guess to be in greater Vancouver area and then but if you look at like maybe from the last mile and the distribution side it's on one side of the country so how did you I guess do that math or if you did that math?

Kelly Striemer Guest

So we took a look at the data and where our customers were located so at the time I think at the time that we made the move we were in about 400 stores across Canada but at most of most of them were in Western Canada. We had some in Ontario and you know a little bit around Eastern Canada but the bulk of the sales was still happening in Western Canada. I had started my you know distribution in terms of where I lived and then kind of you know went east from there and so I figured you know that we were going to need to start with a location in Western Canada that would be able to you know quickly distribute those orders but I also wanted a 3PL that had the potential to scale with us so having a warehouse location in Eastern Canada as well so the 3PL that I work with actually has an east and a west location so that when we're ready we can split our inventory and move into their second warehouse location.

Vikrant Host

Makes sense and like how was your experience in terms of like you know how you got these line items from your colleague and in my experience like you know every 3PL does differently. In fact, I was working on writing a white paper yesterday which I'll publish next week which is all about that you can talk to 10 3PLs which are like less than a mile away from each other and they will have different pricing so how was your experience in that? Did you see a lot of variability in that or was it pretty standard?

Kelly Striemer Guest

There was definitely some there was definitely some variability I mean I think the biggest challenge when you're a brand and you're looking for a 3PL is that not every 3PL prices things consistently and so I was trying to make sense of the cost of the pick and pack and the storage and make sense of what that was going to cost but also trying to understand how they were costing out the shipping fees because as we know shipping costs across Canada are crazy expensive and so making sure that I had a really good understanding of how that cost structure was also being administered because I wanted to make sure we were getting good shipping rates so that we could you know work with all of our e-commerce customers and offer free shipping at a reasonable threshold. So my analysis looked at storage pick and pack and the actual shipping cost.

Vikrant Host

Yeah absolutely and it is very interesting like you know as like you know brand scale I've seen like besides like some people start themselves they keep on doing it themselves they expand they get a warehouse scale from there and then at some point get a 3PL and then also the scale to a certain point then now it probably makes sense for them to do it in-house as well but like you know there are companies like even like Red Bull who uses a 3PL and 4PL you cannot always do it yourself at a scale you know because especially like as you talk about expanding so building your model around that is always the best part because like you know you might need a warehouse in Eastern Canada tomorrow maybe Toronto or something so working with a 3PL helps with that and you maybe expand you're like you know we were talking briefly you might expand to other countries as well you know so and so I'm curious like you know was this something was something you already planned when you started like was it like how did your costing or pricing change or because obviously like doing it in your garage is technically no cost but were you attributing it like you know your time to it or were you anticipating that okay eventually if I will get a 3PL it will add like let's say six bucks uh an order or something like how how did you go about that

Kelly Striemer Guest

Yeah so I went into you know pricing and and and taking a look at margins making some assumptions about what the future would look like so when I started I knew I wanted to go into wholesale so I needed to make sure the margin was there in order to allow for that to happen I knew that at some point I was probably going to need some help with shipping whether that was you know the overhead of having a space or having a 3PL so I factored that in and then in those early days the savings and I use the that in quotations because you know somebody's not getting paid for those early days um I was like well this will allow me to fund some of the growth of the business and so you know to this day we're bootstrapped and so because of some of those early savings it gave me a little bit more wiggle room so that I could continue to grow the business at the pace that we have been growing with a little bit of of that early savings now that being said of course you know now we're you know in at the point where of course that's not the reality but it helps with cash flow in those in in those early startup months

Vikrant Host

So now like if you tell me like you know like you do d2c as well so you're selling on your website you also do uh the stores so how do you manage this because technically like if I would say in my opinion they're a little bit different in terms of how it is done one is more like you know shipping each and every piece uh once you can order one puzzle three puzzles you're breaking boxes breaking pallets the other is that you're shipping like you know a combination of pallets and sending it out so how are things distributed and managed how do you see both of these things differently

Kelly Striemer Guest

For sure I mean first off of course there is there can be differing expectations for an e-commerce customer versus a wholesale customer so in general e-commerce customers place an order they want it as soon as as soon as humanly possible the amazon effect has people expecting it same day next day you know definitely takes slightly longer than that but we we definitely do our best to ship e-commerce orders out as quickly as possible on the wholesale side of things sometimes people want stores want to receive things at a certain point in time sometimes they're placing pre-orders sometimes they're you know ordering a brand new collection for the first time so we will actually stagger our launches so that our wholesale customers are shipped first and so they receive the inventory before we launch on e-commerce so that at least we can try to sync up our launch dates so we want to have a consistent we want to have as consistent an experience as possible so the customer is seeing in both places at the same time so we always try to ship our wholesale orders first so that's one of the ways we manage the difference in terms of timing

Vikrant Host

That makes sense that's very insightful and also like coming back to like you know our initial conversation like as you said that you were moving like you know you are from lower mainland area so naturally moving towards east so how does the process looks like getting into stores was it more like a lot of phone calls sending samples door knocking like how was the overall process

Kelly Striemer Guest

It was it it was a lot of selling that I have to say I mean I don't know that I'm naturally a salesperson but I you know when you start a business you you have to get comfortable sales real fast so I did a combination of things when I first started I went door-to-door I went and stopped in at stores and said hello and told them what I was doing and asked them how they want a pitch to be received because at least that gave me some data to say stopping by is good stopping by is bad you know leaving a sample like just trying to figure out what that pitch looked like and so early days lots of days on the road um I quickly learned from that and realized that you know I had something that was going to work and so email pitches work great for you know busy store buyers a lot of times the retail stores that I'm in they are the store staff they're you know they're the cleaner they're the the owner they're the buyer they're everything in between and so an email pitch is something that they can review anytime they don't have to be you know seeing it when when you're in there in business hours and then you know so from those early days on the road to emails and then a lot more days on the road doing little tours all across the country and then eventually into trade shows.

Vikrant Host

That's amazing and very insightful to know I mean I can only imagine like you were doing it yourself technically you like until you hired these two people I don't know how

Kelly Striemer Guest

I mean I'm just trying to think back to you know I've probably got into at least half of those stores like when it was just and plus the online orders as well

Vikrant Host

Yeah managing that too so very intriguing very intriguing so now like so my question is like so like some of the retailers some are small some are big but like you know one of the ones I looked up on your website is Simon's so like they're pretty big size so what did it require like operationally like was there any operational differences or they had any requirements specific how did you manage on that

Kelly Striemer Guest

Yeah there's definitely some different requirements I wouldn't say that they were terribly different than a lot of our our other stores there's a little bit more of a listing process that you go through with bigger accounts Simon's and others that are you know around that size but overall we've been able to manage it within our regular wholesale flow

Vikrant Host

Like I'm curious like did they did anyone have like any minimum requirements that you need to keep certain levels of stock or any like technical requirements that obviously we have to send you orders via EDI or like they just regularly send like via email or

Kelly Striemer Guest

Thankfully thankfully no special requirements as of yet no EDI ordering so far so far

Vikrant Host

Don't get scared if you ever need help in that I can help out so yeah

Kelly Striemer Guest

Thank you much appreciate it

Vikrant Host

So so you launched like about three collections a year and we thought you briefly mentioned about like you know demand and planning things like you know when you ran out a year and a half back in November so how do you plan around that demand like to forecast this

Kelly Striemer Guest

This is my this has been my biggest challenge I will tell you of of the entire thing because having a business that is highly seasonal we probably do about 40 percent of our volume in Q4 there's such a major need to have inventory for that season now my time because I'm manufacturing overseas is also you know about four to six months in total and so that's a fairly long time in order to plan and then also play catch up you know if something does sell through so this demand planning piece has been just a combination of my very best guess combined with some spreadsheets like I will not say there is anything magical about what we've been doing and I've sold out a little more often than I would like to that being said we're also our business is tripling year over year so it's been challenging to keep up with that just this past few months or so I now have somebody that I've brought on on a consulting basis to help me with that a little more sophisticated model than just my excel spreadsheet alone so that we can be looking at demand plans at a level as well based off of what's selling and then introducing new SKUs discontinuing some that are slower movers and then you know filling the pipeline and then figuring out what the regular flow of demand is

Vikrant Host

That's amazing like you know and it is very very intriguing and I can only imagine like you know how you go through that because as a founder we have like a little bit pain like you know because if I lose a deal because I cannot deliver let's say like you know we are different because like we are services we can still like manage and maneuver a little bit but like for product like you know if you sold out and now if you order again it will not be here for another five to six weeks minimum like bare minimum I'm saying

Kelly Striemer Guest

Oh and not even I mean honestly my lead time is is at least four months four months so at this point I wouldn't get it in time for Christmas and the entire the entire season is missed so it has to I have to look at these things as learnings and then I will do better the next year 100%

Vikrant Host

And like I can only imagine so like my all the best wishes to you that you never well technically you almost sold so sell well almost sell out but not always have like two percent left so like that kind of like makes me wonder like you know as we talked about this journey of three years kind of like maybe I have a one answer that what a bad week looks like today versus what a bad week looked like three years back one of which is like you know selling out when you can sell more but apart from that

Kelly Striemer Guest

Well I have to tell you you know in the early days a bad day I don't bad day bad week it's never bad like I I actually think I probably need to say this like I dreamed of starting my own business for you know 20 plus years and I was I felt like when this idea came I was like okay this is this is the thing so I don't know that I look at anything that's happened in the past three years as bad per se but I can tell you that there were some evenings when I was out in the garage packing puzzles where I wasn't super happy about my life choices now fast forward three years I'm not having to you know hustle like that and you know a bad day or a bad week is both a combination of like well we sold out but we sold out and so would I be happy if we sold out two months from now yeah but instead we sold out now which is like you can see that is really great or you can see it as bad I can see it as both

Vikrant Host

Absolutely I'm sure like when you look uh three years back any bad thing today you see looks better because at least like you're not sitting in the garage right now so so also like you know I we briefly talked about this when we met a few weeks back so I want to touch on the uh returns so you did mention that you get very few returns it's less than one percent

Kelly Striemer Guest

Um so our return rate is very low um I think a lot of times when people buy a puzzle they're buying it for either for themselves and because it's something they want to do or they're buying it as a gift for somebody and so in general we find you know people don't often return they'll sometimes want to exchange the style for for a different one and you know we can we we always try to make that happen in a you know as seamless a way as possible but thankfully it hasn't been you know returns haven't been a major challenge which I know is for a lot of e-commerce businesses um you know I can only imagine running a clothing company where people need to exchange sizes and all that kind of stuff I you know puzzles they always fit

Vikrant Host

Yeah I mean like you know and your 3PL must be really happy because you don't get any returns

Kelly Striemer Guest

I'm probably more happy than you because managing returns is a big headache I can tell you that and definitely not fun

Vikrant Host

So let's say like if today someone was like you know thinking about starting like you know an e-commerce brand or like you know a d2c brand like going through either stores online etc like a consumer driven brand like you did three years back what would be some things like you know you would tell them like something which you wish someone told you three years back without let's say you asking

Kelly Striemer Guest

Sometimes I sometimes I think about the fact that I named my business villager and I don't know that I completely had the foresight that I did at the time but I have to tell you like the the thing that has always that I keep going back to is that I go to the village for for insights when I want when we talk about new artists and new art and where we want to sell and where we want to do markets and you know whether we should do this size puzzle or that size puzzle I go to the village and so you have this following that I can go to and ask for feedback and people have opinions people are more than happy to share their opinions with you so if I were to go back and tell myself early on like any insight you want it's like sitting right there you just got to talk to people and so you know whether you choose to do that online whether you choose to do that in person with stores whether that's you know face to face to the market or whatever it is I think that being able to get that feedback is just it's so valuable.

Vikrant Host

Yeah absolutely like if I understand like you were saying that go and ask and talk to people like it could be any community you're part of create a community like you did which is very amazing I'm actually working on creating a supply chain community which I'm still thinking what to name I'm not as creative as you so it might take me a bit more time to come up with a name like how I have been referring it as more like a fraternity of like you know supply chain but we'll definitely see where it goes but the whole idea is what you just said that like you know people need help and like sometimes the worst thing I've seen in most businesses I've worked with over the last 10 to 12 years of my career as a consultant or even as a software company founder is that people generally don't go out and ask for help like you know with one like you know they think that okay what will people think about them like you know that they don't know what they're doing and the second biggest reason is that either they think that they know a lot and they know more than others and third could be that just they don't know that help exists.