Uncovering the Secret Money-Makers of the Wedding Industry
How Carats & Cake is winning a major slice of the industry’s pie (er, wedding cake).
It’s no secret that weddings are big business with a capital B. The Knot conducted a study last year that found couples in the U.S. spend an average of almost $33,000 on their weddings. In Manhattan, they spend over $82,000. And when it comes to those weddings that you see published on, say, COVETEUR, as Jess Levin Conroy told us when we visited her at the West Village offices of her company, Carats & Cake, well, those weddings cost upwards of $100,000. For just that one night. We’ll wait while you pick your jaw up off the floor.
Another thing that’s no secret: We’re fascinated by weddings. And we know you are, too. But when we hear numbers like those, we gasp, scratch our heads, and go back to planning our own debt-inducing nuptials (fantasy or reality). But if you’re Levin Conroy, you see the massive opportunity at hand. Carats & Cake might look like another blog featuring all the details on ~real~ (albeit beautiful) weddings to serve as inspiration for engaged couples (or late-night fairy-tale porn). But behind the scenes, the company provides tools to all those small businesses (wedding planners, florists, venues, photographers, caterers, etcetera, etcetera) who are actually taking in significant portions of that $100,000-plus pie as revenue. Having founded the company in 2013, it has a whopping 25,000 businesses that hold memberships and pay for payment and marketing tools—and at the highest level, business advice from Levin Conroy herself. As we discovered, she knows what she’s talking about.
The big business that is Carats & Cake:
“Carats & Cake is a marketplace of wedding businesses on the front end that is all about helping the top-of-the-market businesses—from photographers to wedding planners to properties—highlight what they do best and, in turn, allow couples to then discover the best of the industry.
“How we actually make money is behind the scenes. We sell a suite of tools and resources to the businesses. We have a property tool that our properties use that is about marketing themselves better. For our photographers and wedding planners and florists, we have a marketing tool, a PR tool, and a payment software. We sell that to luxury business owners and have a very specialized service for them.”
How they grew (and are continuing to grow):
“We played into that blog mentality that was inside the space before we got there. Every wedding publication from Style Me Pretty to Brides has this incredible ecosystem where wedding businesses want to get their work published. This is how we built our brand.
“Carats & Cake for us creates this ecosystem where photographers or wedding planners or couples themselves will feature their weddings with us. They submit the content, and every wedding that we feature, because the site is a marketplace, the wedding actually writes a profile for every business that is featured in that way. That’s how we grew initially. Now we get a hundred submissions and can pick and choose as to what makes sense for us as a brand. Every time a wedding is posted, it adds an average of eight new businesses to the site, and the businesses will get a ‘Hey, welcome to Carats & Cake. Join for your complimentary membership’ email. Through that our sales team looks at all of the businesses that have joined Carats & Cake and, based on a couple different metrics including longevity and the industry, anticipated revenue, position in their geographic market, we then decide whether or not they are fit for our services.”
What it’s like to be a female CEO in a field that is still dominated by men:
“In my past life [as a venture capitalist], being a female was an exception to the rule. Inside the local wedding industry, that is not the case—it’s exciting that there are so many female-led businesses! But when you look at the tech wedding world, some of the biggest companies, from The Knot to WeddingWire, the CEOs are all men. In fact, a lot of their teams are male-dominated, which is really interesting.
“Even in venture, it never really bothered me. Of course there are funny experiences where you walk in and someone will be like, ‘I’d like another coffee’ because they don’t expect you to be the investment professional in the room. You just do your job and, in some ways, it motivates you to do your job even more. The stats say that female-led businesses aren’t typically funded as much as male-led businesses. But they also say that female-led businesses are actually more successful when funded, which is interesting. I think that we are continuing to make strides.”
She didn’t get into the industry because she’s obsessed with weddings:
“I got attracted to the space because of all the entrepreneurs. When I looked at the math, you have half a million local businesses, and at the time no one was really paying attention to them. The industry is still focused on the consumer. If you actually look at it, the businesses are the ones driving the industry year after year and the ones touching the revenue every year. Especially at the top of the market—the top 10-15 percent of couples and business owners touch a majority of the revenue. If you think about it, you have a new consumer every year. You are not getting a consumer and then keeping them for decades. But if you are a florist, some of them are doing forty or sixty weddings a year. Some are probably doing hundreds. And they are doing this year after year after year.”
How much she sees couples spending on weddings:
“Most of the spend on the consumer side is irrational. It’s an emotional spend. Your average wedding cost in the U.S. is about $30,000. In New York it’s $60,000-$75,000. But the actual luxury consumers, which is the majority of the weddings that we all see published [on sites like COVETEUR], the cost is upwards of $100,000, and that spend is emotional entirely. It isn’t rational to spend more money than you would for a down payment on a house on a single night.”
The best advice she gives businesses that she helps with Carats & Cake:
“One of the interesting things is that people are afraid to talk about the numbers. And a majority of the people in this industry fell into this industry. They have no idea what they should be charging. And also, because so many of these businesses are small businesses, there is not a ton of literature written about that right now. [The questions you should be asking are] what should your cost be? What should your overhead be? We have a lot of conversations with our clients about this just to understand the fact that you are building a business.”
This lemonade stand analogy will help you understand what she’s talking about:
“A kid’s lemonade stand is a great example to help you understand. You took glasses from your parents’ kitchen and the water that came out of their faucet and made lemonade that was in the cupboard, and then you sold lemonade in front of your house for two dollars. If you sold ten glasses, you made $20! Well, you actually didn’t make $20, because the water that you used cost something and the glasses that you borrowed cost something and the lemonade mix cost something. As far as entrepreneurs go, especially inside this industry, a lot of times they are not building in what their hours are. They are not building in the fact that they are using Wi-Fi in their house and thinking about what it actually costs to have the business itself.”