At first he tried to produce the cookies in New York City but encountered problems while using a shared kitchen. Auerbach realized they would have to make the cookies in their own facility but finding a space in New York City was nearly impossible because of the cost, he says. He decided to move the company to Binghamton, N.Y., where cost of labor and renting a space would be cheaper to set up his own manufacturing facility.
"That was a nightmare," he says. "Basically it's affordable for a reason -- because business was terrible. We moved our oven three times because of one bad lease after another."
Auerbach originally had a vision of both a retail store and offsite production. Because of the real estate troubles he was having, he abandoned the idea of a retail store and sold solely through the website.
In 2008, with new financing promises, he attempted a retail store again, this time opening a caf' in Corning, N.Y. But Auerbach opened his store just as the financial crisis hit and financing was quickly pulled off the table (even with revenue still increasing). He was forced to close the store and his facility in Binghamton in 2010.Emphasize the Brand
"At the same time I knew the brand was still there. I continued to build brand value. It's the reason why we were able to convert this into a virtual operation," Auerbach says. Since he no longer had any physical resources -- and frankly no working capital -- he put all of his emphasis into branding and networking to keep the concept visible, particularly on social media websites Twitter, Facebook, LinkedIn (LNKD), and even through Pinterest. Auerbach says he uses "pre-defined" searches looking for relative tweets and trends and other people just speaking in general about black and white cookies. The efforts have been successful both on the consumer side and on the professional networking side. He now says there are "deep players" willing to take board positions. The company has been holding on by working with several cookie manufacturers to sell a product on QVC. (Auerbach says he is currently not making a profit.)