The story of Scentsy is the story of how a simple idea—offer a safe, wickless alternative to scented candles through house parties, open houses and home shows—grew into one of the most rapidly growing companies the direct selling industry has ever seen.
Inspired by an Oprah episode on “Millionaire Moms,” stay-at-home mom Kara Egan was seized with the urge to start a business of her own.
Then, over lunch one day, her sister-in-law Colette Gunnell mentioned this funny thing her neighbor did, breaking scented candles into pieces and melting them in an old potpourri warmer.
Something clicked for Kara. “I heard the words in my mind saying Kara, this is it.” She called Colette that same night and asked, “Why don’t we start a business together selling candle chunks in a warmer?”
In July 2003 Scentsy was born. “We actually poured our first set of bars in an ice cube tray,” remembers Colette. “The scent was Red Delicious. I still have some of the original cubes we made.”
The Founders Find Orville
The partners began selling their wickless candles and low-watt bulb warmers at trade shows and fairs. The product was a hit, but they faced a steep learning curve as they dealt with the many challenges of trying to run a new business.
At a Salt Lake City home show in March 2004, their booth happened to be right across the aisle from entrepreneur Orville Thompson’s. He was fascinated by the wickless candle idea, and brought a warmer, several bars and a set of testers home to show his wife, Heidi.
A few days later,
Heidi was visiting and sharing the scents testers with her mom and sister. Orville left to run an errand and came home to find the women smelling the testers. They were having a great time and something smelled delicious. He asked Heidi what she was baking and the women laughed. She told him it was a Scentsy candle bar called Banana Nut Bread.
Orville was touched at the cozy scene and intrigued to see how different scents could evoke emotions and memories. He was energized by how natural it was to share those feelings and memories with others in the “party” environment.
On May 1, 2004 Orville and Heidi bought the company from Kara and Collette, who are now Scentsy Consultants.
Heidi Discovers the DSA
A stay-at-home mom for 10 years, Heidi quickly became immersed in the new venture. She took over the books and began researching different business models, including direct selling. She learned about the Direct Selling Association (DSA) and was impressed by DSA’s high level of support for its members. But what really drew her to DSA was the organization’s Code of Ethics.
Heidi convinced Orville to attend a DSA meeting in New Orleans even though the expense was considerable. And that’s where the idea to launch Scentsy as a Party Plan company was formed. Orville and Heidi learned everything they could about how the direct selling business model worked. They realized how well that model suited the wonderful experience the women in Heidi’s family had shared in her kitchen with the Scentsy testers.
On July 1, 2004 Orville and Heidi launched Scentsy as a Party Plan company.
Scentsy’s first home was a 40-foot metal box. For several months the Thompsons and their five kids ran Scentsy’s manufacturing and shipping operations from an old ocean shipping container that had been sitting on the family sheep farm in Meridian, Idaho.
By October 2004, Scentsy had outgrown the box. Orville and Heidi signed their first lease and moved into a 1,800-square-foot warehouse and office facility closer to town.
Together with their family and friends, the Thompsons poured, cooled, packed and shipped all the candles themselves. Heidi’s parents, Alice and Fred pitched in and worked like troopers, at no salary, for nearly two years. Scentsy’s early Consultants often showed up to help pack and ship their own party orders, and Orville’s mother joined right in to help them when she came to visit.
In June 2006, Scentsy doubled its square footage, moving to a new facility with both warehouse space for production and office space for its growing staff. But it was only a matter of months before the company outgrew that location, too. After less than a year, Scentsy was already sorely in need of more space.
It was time for a bold move. Orville found a building in Meridian with enough space to accommodate Scentsy’s growth. But when he approached the property owner in March 2007 to talk about terms, the owner thought Scentsy’s revenue projections of 400 percent growth by year’s end were unreasonable.
Not willing to give up, Orville cut his projections by half and met with the landlord again.
Hours before Scentsy’s annual Convention in July 2007, the landlord finally agreed to lease space to Scentsy. And incidentally, Scentsy’s growth that year (more than 600 percent) was in line with Orville’s original “unreasonable” projections.
Scentsy’s new 42,000 square foot location at 3698 East Lanark Street housed most of Scentsy’s operations, including new office space for its growing staff. The company also opened a 14,000 square foot distribution center near Chicago, Illinois to accommodate the company’s growth.
In June 2008, Scentsy began to automate, speeding up production with a custom-designed candle bar injection machine—christened “Alice” in honor of Heidi’s mother. In August 2008, the company installed a second candle bar injection machine, appropriately named “Fred” in honor of Heidi’s stepfather.
By the end of 2008, Scentsy filled more than 100,000 square feet in the Lanark building. The company also established a new 80,000 square foot distribution facility in the Lexington, Kentucky area to improve service to Consultants outside the Intermountain West. In October 2009, Scentsy will expand into Canada. Scentsy now operates in all fifty United States, Guam, Puerto Rico and several provinces in Canada.
The basis for Scentsy’s business philosophy comes from a quote by Albert Einstein—a quote that so inspired Orville as a young man that he kept it posted on his bedroom wall:
“Try not to become a man of success. Rather, become a man of value. A successful man takes out of life more than he puts in. A man of value will give more than he receives.”
When they launched Scentsy, Orville and Heidi determined from the beginning to build their business around core virtues of Simplicity, Authenticity, and Value.
Simplicity
Scentsy intentionally keeps its product line and pricing structure simple so that customers and Consultants alike can focus on sharing the party experience. Because the product and process are so easy to understand, it really does seem as if Scentsy products sell themselves. With no specialized experience required and no need to memorize complex features or costs, even new Consultants feel comfortable and confident in their ability right from the start.
Authenticity
Unlike most other direct selling companies, Scentsy Consultants are encouraged to express their individuality and operate their businesses in ways that work best for their families and their lifestyles.
Some Consultants focus on building local teams while others become experts in Fairs and Shows or Basket Parties. Scentsy has fostered an atmosphere in which there is no right or wrong way to grow a business, provided each Consultant is giving more than she takes to her customers, her team and to Scentsy.
Transparency is a key part of Authenticity at Scentsy. Orville holds a Director’s Council conference call every week and to review year-to-date sales and financial information. Nothing is kept secret from the field or the staff.
The commitment to Authenticity resonates with Scentsy customers and Hostesses as well. And when they learn about Scentsy’s commitment to the DSA Code of Ethics, they know they’re doing business with a company they can trust.
Value
At Scentsy, Consultants are truly sponsored, supported, mentored—not just recruited. Our focus is on product value and Consultant success. All executive decisions are driven by one overarching goal: to increase Consultant income per hour. If any business move being considered by the leadership team does not support that goal, Scentsy won’t do it.
Orville sees his primary role as one of service. He considers the Consultants and Directors in the field to be the driving force that continues to make Scentsy what it is. He holds himself accountable for supporting their business development and removing any hurdles or impediments to their growth.
As a company, Scentsy also “gives back” to the direct selling industry through active participation in the DSA. Members of Scentsy’s leadership team serve on a number of DSA committees. Orville also serves as Scentsy’s DSA Code Responsibility Officer—an unusual step for a CEO.
For Scentsy, bucking conventional wisdom about the “right” way to do business has paid off. The most vivid proof that the Scentsy strategy works is in the numbers.
That’s an average annual growth rate of well over 300 percent in both revenue and number of Consultants. And Scentsy’s growth shows no signs of slowing down, even during one of the worst economic downturns in decades. So far in 2009, the company has over 35,000 consultants and is on track to reach projected sales of $180 million in 2009.
Bridging New Borders in Puerto Rico
In September of 2008, during a system-wide software upgrade, a switch was unintentionally left open that allowed Puerto Rico residents to enroll as Consultants. And enroll they did. By the following summer, the Puerto Rico market was growing at a rate six times higher than the US rate.
The leadership team was concerned. Scentsy had few bilingual Directors and very few training materials had been translated into Spanish. With such rapid growth and limited communication, Scentsy executives wondered whether the guidelines, ethics and policies were being followed. Mark Stastny, Scentsy's Chief Marketing Officer, took a team of employees and executives to Puerto Rico to see what was going on.
What he found amazed him. “The alignment with the Scentsy values was incredible,” he says. Somehow the Scentsy message made it smoothly through the language barrier. Puerto Rico’s family-oriented, close-knit culture offered a perfect environment for the Scentsy model.
Scentsy is growing geographically. Initially, Scentsy concentrated its market in Utah, Idaho and Texas, but now has Consultants throughout the country. To better serve new markets in the East and Midwest, Scentsy opened a distribution center near Chicago, Illinois in 2007 and added another near Lexington, Kentucky in 2009. And at manufacturing headquarters back home in Idaho, Scentsy’s two state-of-the-art candle bar injection machines have been joined by five additional automated candle bar machines.
And, in October 2009, Scentsy will expand its operations into several provinces of Canada.
The Story Continues
What began in 2003 as a simple idea inspired by ordinary women has since become a thriving international business. Orville and Heidi—along with thousands of Scentsy Consultants and customers—have created something extraordinary that touches thousands of lives each day in profound ways.
Orville says it best. “Through the power of our fragrances, the simplicity of our product line, and a deep sense of family at home and at work, we find hope, vision, and an appetite for working hard as a team that binds us together. With Scentsy, we have each found something that speaks to and encourages the best in ourselves and each other.”
