founders Dan and Michael Swimm
came into the candle business honestly.
Their father was a chemist at a pair of once prominent global candle companies and taught them the craft and chemical process of making the best quality candles and fragrances.
But they brought something else to the table too—backgrounds in programming from the dotcom era and a deep desire to work together to solve problems in an industry that hadn’t evolved with technology.
Thirteen years later, they’ve built the largest distributor of natural soy wax in the U.S. and a leading ecommerce company in the candle industry. The bootstrapped company employs 30 people in Durham and has more than a 75% compound annual growth rate over the last 11 years.
As they begin their first major expansion in the company’s history—into soap-making—the brothers sat down with me to discuss the company’s past, present and future in Durham.
A background in entrepreneurship and DIY
The Swimms grew up in an entrepreneurial family in Syracuse, NY. One grandfather was a grain farmer and the local gun smith. The other operated a fruit distribution business, and an uncle owned a restaurant. And their father had numerous side businesses related to the candle and scent industry—the brothers spent their days bagging potpourri and producing Pascal candle nails. The men always knew they’d follow in those footsteps and start a company together.
But it wasn’t until 2003 that the idea for an all-natural candle making supply company that leveraged the Internet came to be. It was also only then that they had the skill sets and market timing to make it happen. Though Michael (pictured above, left) went college to become an architect and Dan (right) to get a math degree, both brothers ended up programmers for various companies during the dot com bubble.
A big challenge prior to starting the company was where to settle it—Dan lived in New York and Michael in Hawaii. As they searched for the right locale, they stumbled on the Triangle region and were drawn to its strong startup community and business climate.
Each brother put in $5,000 to start the venture, with their parents contributing $5,000 alongside them. Things were pretty tight as they got up and running.
Michael jokes that in the beginning, he was both the company programmer and the fork lift operator. It took three to four years before the brothers could start paying themselves actual salaries. In fact, Michael’s wife was a graduate student at the time and made more money than him.
Serving the DIY market
The Swimm brothers had confidence from the beginning—their father told them they knew more about the industry than most experts. But traditional candle sales were on the decline, so they knew they’d need a fresh angle.
Still nascent at the time was the consumer interest in natural and organic products and do-it-yourself, but the men saw the start of both trends. As hobbyists and consumers started to care more about the ingredients in the products they used and purchased, they became more willing to make candles themselves. That allowed CandleScience to sell not only to large bricks-and-mortar retailers, but to small businesses and at-home hobbyists too.
Their products include natural soy wax (from American soybeans) and fragrance oils along with all the equipment needed to begin candle-making at home. There are tutorials, guides and kits too.
Growth has always been steady. As the company likes to joke, “People like to buy our products, take them home and light them on fire. So there’s a lot of built-in demand!”
But that isn't just due to market demand and high quality supply.
The brothers spent a lot of time on operations and company culture too. They hired well—they’ve never had to layoff an employee—and turnover is very low.
The company culture is highly collaborative and focused on growth and knowledge-building. For example, one employee started in the warehouse and ascended to director of marketing, while another started in customer service and moved into research and development.
CandleScience now employs 30. It also works with Durham Exchange Club Industries
(DECI), a nonprofit organization that puts individuals with disabilities to work. They share a warehouse and CandleScience employs 20 or so DECI workers full-time to pack orders and prepare them for shipment.
Michael and Dan are also obsessed with quality. They play a pivotal role in developing fragrances because smell is such a critical variable for the business—and prior to their R&D in 2003, it was rare to find a pleasant-smelling soy candle. They routinely fly to the fragrance laboratory in New Jersey to oversee the production process and ensure the products include the highest quality ingredients and essential oils.
To meet the bar for e-commerce companies set by Amazon, the brothers have made it a priority to provide same day shipping to the regional market, allowing for small businesses to get products quick. CandleScience was also one of the first companies to let consumers calculate cost of shipping before making a purchase.
Another priority has been adding more accurate software for forecasting sales in order to better manage inventory. By considering past sales figures and factoring seasonal growth, an algorithm not only determines future sales, but the necessary inventory to meet those sales.
Inventory management is a key differentiator for any ecommerce company, says Jim Noonan
, a former Soccer.com executive and founder of the e-commerce and business-to-consumer consultancy Scaleabilities
“It is a challenging balancing act to have enough of the right products on hand to satisfy demand without over-investing in inventory or leaving sales on the table due to being out of stock," Noonan says.
Not only is Michael a programmer and fork-lift driver, he is also a weekend engineer. He developed the machine that allows CandleScience workers to fill hundreds of plastic bottles with fragrance each day.
Confidence to grow
Finetuning operations and growing sales for so long has given CandleScience the confidence to take on some large projects. To cut down on shipping costs and allow for faster deliveries to West Coast customers, the company opened a Reno warehouse in 2014. Sales continue to accelerate from that part of the country.
An even bigger bet is going to its first product line expansion in 13 years. Launched last week is SoapScience
, a new ecommerce site providing ingredients and tools to DIY enthusiasts who make their own soaps. The partners began to see a trend in its customer base—many candle makers also make soaps at home.
Bar soap has also seen a resurgence, with sales growing nearly 5 percent from 2010 to 2011. In a 2014-2015 survey, nearly 83 percent of households said they use bar soap.
Though Michael says the chemistry is very different for these two products, the process is very similar. What ties them together is fragrance, which is the primary reason customers will buy a particular soap or candle.
Products for sale on SoapScience range from molds and equipment to “melt and pour” soap bases, dyes for coloring the soaps and a variety of fragrances. The new site also offers a tutorial for beginning soap makers.
Moving forward, the company will focus on marketing for the first time. Surprisingly enough, CandleScience recently hired its first full-time employee in that area. According to Noonan, most e-commerce companies spend between 15%-20% of sales on marketing. Only now do the brothers feel ready to spend money to widen their customer base.
It’s that frugality along with a laser focus on creating the best products and serving customers that the Swimms attribute to their company’s success.
They’ve also managed to build a market with built-in demand—candles always need to be replenished. And now, with the addition of SoapScience, they’ll do it all over again.