It’s been a big three years for The Honey Pot Company.
The brand started selling its plant-based feminine care products in Whole Foods in 2016, less than two years post-launch. Target took it up in 2017 and, when a Target-backed ad went viral(opens in new tab), the company’s rise continued.
Now, Honey Pot products are in some 20,000 retail locations worldwide, including Target, Walgreens, CVS and Walmart. Founder Bea Dixon made headlines as one of the first Black women to raise more than $1 million in venture capital.
And then, things got even busier.
Over the past six months, Honey Pot’s Instagram following has grown from 90,000 to 350,000. Co-founder Sy Gray, who also happens to be Dixon’s big brother, attributes the surge to a “rallying” around Black founders—and wellness brands in general—as consumers seek stable, trustworthy brands in a chaotic time.
Those company milestones have presented challenges. Honey Pot’s supply chain has hit snags, along with lots of other businesses’, and its legacy software system proved unable to keep up with retailers’ demands.
So, the founding team made some smart changes to prepare for even more wins to come.
Honey Pot got a dreamy start in ecommerce
Bea Dixon founded Honey Pot after suffering from a vaginal infection on and off for eight months. Her grandmother came to her in a dream and offered a recipe for a concoction that would cure Bea’s symptoms. It did.
At launch, Honey Pot sold its feminine cleaners, tampons and more on its own ecommerce site. However, its expansion into retail chains was fast and intense. This brought up a couple of major challenges.
Supply-chain delays proved the need for backup suppliers
“The hardest part of getting into retail is understanding your supply chain and your operations,” said Dixon.
It got even harder with COVID-19 closures. Honey Pot manufactures all of its products in the U.S., but some parts of those products come from China, where factory closures abounded(opens in new tab).
“Our manufacturing is U.S.-based, but the question is, where does your manufacturer get their components?” Gray said. As a consumer goods company, “you have to work with your manufacturers and understand where they get each piece of the ingredient deck(opens in new tab) and packaging.”
Perhaps, for example, your manufacturer gets the coconut oil and colloidal silver for your normal wash(opens in new tab) in the U.S., but the bottle caps come from China. When Chinese suppliers shut down, that’s a problem.
“Our manufacturing is U.S.-based, but the question is, where does your manufacturer get their components?”
--Sy Gray, Honey Pot co-founder
Gray devised a fix by finding backup suppliers(opens in new tab) for each of Honey Pot’s more than 30 SKUs. For each item, his team is forging relationships with three “safety valves”—three backup suppliers, in three separate countries—to prevent stockouts(opens in new tab), common among many businesses during closures.
Recent months have “been a time to look at your supply chain in a way that you’ve never had to before, at a granular level, and then find plans A, B, C and D,” he said.
When big-name retailers began stocking Honey Pot, it was time to upgrade to a new software
Another hurdle in the recent past was Honey Pot’s outgrowing its old business management system, QuickBooks.
Upon expanding into big-name retailers, Honey Pot needed a system that would electronically relay order details from its office to retailers’ for fulfillment. These retailers required Honey Pot to integrate with their systems for electronic data interchange (EDI).
Gray brought in consultants to try and integrate Honey Pot’s order details with QuickBooks, but it didn’t work. Graduating from the software seemed to be a rite of passage in retail, he said.
“You have an efficiency that you build with QuickBooks, and it produces all the outputs you want … until retailers say you need an EDI,” he said. “There’s an inflection point where the systems you’re using just won’t work.”
“There’s an inflection point where the systems you’re using just won’t work.”
Gray studied other strong consumer goods companies to determine Honey Pot needed an ERP system(opens in new tab), vs. making tons of adjustments to QuickBooks or a similar software, to get the results it was looking for. He chose NetSuite based on brand recognition and started the implementation(opens in new tab) process, which is about halfway done.
Once finished, Honey Pot will be able to house all order data centrally in NetSuite and convert its purchase orders into invoices automatically vs. manually, Gray said.
Honey Pot plans to get even more efficient with its new ERP system
- Supply chain strength vs. snags
The first order of business: fortifying the supply chain. In addition to working with NetSuite’s implementation team, Honey Pot hired an operations manager, external consultants and a supply chain director to further execute its “safety valve” plan of finding backup suppliers.
“We have all the people in place to flesh [that plan] out, with NetSuite being the center of it,” Gray said.
- Cash flow with clarity vs. confusion
Dixon and Gray agree that receivables lags are one of the toughest challenges in retail: Your company might not receive payment for 90 days after making a sale. And each retailer you work with might have different net payment terms, whether it’s 30, 60 or 90 days.
Gray keeps cash flowing by sometimes negotiating payment terms with vendors and evaluating debt facilities(opens in new tab) like bank loans and revolving lines of credit. NetSuite, he said, will bring more clarity to cash flow.
“With the right plugins(opens in new tab), NetSuite [tracks] your inventory from your fulfillment centers, so you know what inventory you have on-hand,” he said. “It talks to your retailers, so you know how many invoices have come in. And when it has your budget, you have the three ingredients [to determine] where your cash flow should be that month.”
Demand planning automatically vs. manually
Until now, Honey Pot has done demand planning(opens in new tab) manually in spreadsheets, which teams receive in their inboxes daily.
NetSuite will replace that process: The system will pull inventory data and purchase orders, then automatically order supplies in the proper timing—say, the materials for an order of herbal pads(opens in new tab) four weeks ahead of the order’s ship date.
As Honey Pot continues to serve a fast-growing group of loyalists, Gray is looking forward to working in a single, integrated business system. NetSuite, he said, will bring together all parts of the business: budgets, cash flow, each department’s supply chain and inventory, the sales team.
“NetSuite will be where everyone connects,” he said. “I’m excited for that.”
? Learn more about switching from QuickBooks to NetSuite in our on-demand webinar(opens in new tab).