PayPal and Small Business Founders on the Power of Saying No

Never dismiss inspiration, planning, partners and a little luck when running a small business.

That’s one takeaway from an engaging episode of PYMNTS SMB-TV featuring Stephanie Leshney and Tyler Leshney, president and “chief paternal officer,” respectively, of kid’s playtime bath products brand Dabble & Dollop. Joining the conversation hosted by PYMNTS’ Karen Webster was Ed Hallett, senior director of SMB Solutions at PayPal — a key part of this story.

The mixable, soapy, sudsy concoctions Dabble & Dollop is becoming known for were Stephanie Leshney’s brainstorm, with the brand launching in 2019. Then came the COVID lockdowns.

Tyler Leshney was hesitant to note that the brand benefitted — as did many others — saying, “we grew in a time that was probably a very difficult time for most businesses.”

As much as decisions like sourcing all materials from U.S.-based suppliers paid off during the worst of supply chain snags, the squeaky-clean small business still had to navigate marketplace changes that made customer acquisition and retention more challenging.

Pointing to the Apple iOS change in which millions opted out of ad targeting, Tyler said on “the tried-and-true channels like Instagram and Facebook we’re starting to see some changes,” which made it more difficult to engage with customers with social media ads.

Stephanie said they were fortunate to have distribution deals with retailers and eTailers, including Macy’s, Saks Fifth Avenue, Maisonette and Uncommon Goods, which took some of the sting out of the social media marketing setback.

Changes to the social media ad terrain are pushing the brand toward influencers and bloggers who want stories to tell about products to love, and the couple who invented mixable bathtub soaps and shampoos for kids to play with while getting clean makes a good business narrative.

But they’re nowhere without the payments piece in place, which is where their association with PayPal enters the tale.

On Flexibility and When to Say No

Saying he’s got his eye on some Dabble & Dollop products for his kids, PayPal’s Ed Hallett noted that PayPal processes well over a trillion dollars of total payment volume per year, and SMBs are an important part of that.

“The story that Tyler and Stephanie told is a good example of what we see happening, which is that you had this incredible migration to online shopping behavior during the pandemic, and you have rapid changes of that behavior coming out of the pandemic,” he said.

“What that says is that you need to be very flexible as a business.”

Considering the “nuance in where you need to be in those offline and online environments,” Hallett added that not only did retail exposure in places like Macy’s keep sales flowing but said, “I would hazard a guess that you’re not just winning sales in those environments, you’re building brand equity and understanding the specific audience that you care about.”

It’s also a lesson in where not to go. Stephanie said, “we’ve turned down opportunities, which is painful to do as a small business, but we’ve stayed focused on making sure we’re in the right places. We don’t just want to be anywhere. We want to be in the right place.”

In Hallett’s view, that thinking is on the money as a prime example of an SMB mapping its brand for the best channel match and not dissipating efforts where they may not count as much.

PayPal turned out to be a good fit for Dabble & Dollop on a few levels, from higher direct-to-consumer (D2C) conversions with PayPal Checkout to the visibility into decisioning data to payments choice and ease. “If you don’t allow all these different methods of payment, you will not convert the customer. You have to make it frictionless. You have to make it easy … and be super flexible,” Stephanie said.

Tyler called it “curated brand ubiquity,” where the company chooses where its products sell. That seems to contradict the “be everywhere your customers are” ethos, but it’s a fine-tuning of that mindset. He illustrated by noting that Dabble & Dollop also turned down a large brick-and-mortar chain because the brand wasn’t ready for that kind of scale.

“We said no to this opportunity because I think quite frankly, we would’ve failed. Our supply chain wasn’t streamlined enough. Our product offerings weren’t well-defined enough.”

Toying With Bath Concepts

Even when your child is playfully caked in mud, there’s no getting around the wave of cutbacks rippling through consumer products now.

Stephanie’s cool with that, saying, “we aren’t a value brand at this stage. We are a value-added brand. We’re bringing something more than a product. We’re bringing a bath time experience.”

Given that Dabble & Dollop has over 1,000 positive reviews to its credit, the Leshneys are doubling down on authenticity and playing to consumers who value that experience.

Subscriptions are another matter, as the couple thought this would be a core of the business, only to discover that bath time was difficult to fit into a standard recurring model.

They pivoted to a Scent of the Month Club, and they’re toying with a refill subscription idea because customers love their bottles.

Coincidentally, Webster identified “the refill economy” as one of the top digital commerce trends of 2023 in a recent column.

As for the Dabble & Dollop outlook, Stephanie said they would launch with “at least four, possibly eight new [eCommerce retailers] nationwide” this year. They also launched an affiliate network in 2022 with Refersion and ShareASale and are also working with PayPal’s Honey platform to drive conversion and loyalty.

From working capital to payments choice to make sure affiliates are doing their job, Hallett said, “Commerce is about real people interacting with real people exchanging goods and services that they value. Payments should be something seamless and easy.

“If people are thinking about that on either side, then it’s not being done well. As much as our payments are invisible, we’re doing a lot of work in the background to build relationships.”