Why You Should Be Careful With Private Equity

A firsthand story + what everyone should know

Everywhere you turn, it feels like small businesses, old favorites, and trusted suppliers are disappearing — replaced by private equity groups you’ve never heard of. As a small business owner myself, I get bombarded with offers to sell on a daily basis. And after watching what happened to a former client of mine who did sell, I’ve seen firsthand how quickly things can change.

Here’s my story, and why I think everyone — makers, suppliers, and consumers — should pay attention.

My Firsthand Experience: How a #1 Amazon Product Was Slowly Destroyed

Years ago, I created and supplied the fragrance oils, wicks, and wax for a company that held the #1 spot for candle‑making kits on Amazon. It was a product I was proud of — carefully formulated, tested, and built to work as a complete system.

Then the company sold to private equity.

And the changes started immediately.

1. The fragrance oils were the first thing cut.

I could see it in the reviews. Suddenly customers were confused:

• “Why did everyone say these smelled amazing?”

• “Mine smells like… $%&#(”

• “Smells like toilet cleaner.”

I checked the dates — these were not my oils. They had replaced them with cheaper alternatives.

2. Then the wicks were swapped.

Which made no sense, because the entire kit had been engineered around the correct wick for that container. But once the fragrances changed, the wick wouldn’t have been right anyway.

3. Finally, the wax was replaced.

Honestly, I was surprised they were still buying wax from me at all — they could have gone straight to AAK. I never hid that. But eventually, that too was cut.

Over two to three years, I watched cost‑cutting slowly destroy a product I had built with care. It wasn’t my name on the box, but it was my work — and it hurt to watch it unravel.

Then, about three years after the acquisition, I received a letter saying the private equity company was gone and to submit any unpaid invoices. We weren’t working together anymore, so it didn’t affect me directly, but it confirmed what I already suspected: the whole thing had collapsed.

Private Equity Changes Things — And They Don’t Have to Tell You

Most people don’t realize how many of their “favorite” suppliers aren’t the same companies anymore. There was a massive wave of acquisitions around 2021, and many well‑known names quietly changed hands.

You might think you’re buying from X, Y, or Z — but you’re not. And the new owners don’t have to announce it.

Why Private Equity Can Be Risky

Private equity (PE) isn’t automatically bad. But it is designed to prioritize investors, not customers or product quality. Here’s what people should understand.

1. Their goal is fast profit, not long‑term stability.

PE firms buy companies to increase profits quickly and sell them for more. That often means:

• Cutting staff

• Reducing product quality

• Eliminating customer service

• Raising prices

• Selling off assets

It looks great on paper — until the company collapses.

2. Cost‑cutting almost always hits quality first.

“Efficiencies” usually translate to:

• Cheaper ingredients

• Outsourced production

• Fewer employees

• Less innovation

If a product you loved suddenly changes, this is often why. They don't need to tell you it changed. In fact, I have heard from many customers being told that the product did not change, when in fact I know it did because one of the companies had been purchasing FOs from other FO house but brought it in-house. There is no way they didn't change the formula! Private equity owes you nothing!

3. They load companies with debt.

Many PE deals use leveraged buyouts, meaning the company is saddled with debt to finance its own purchase. That debt can:

• Drain cash

• Limit investment

• Push the company into bankruptcy

This is why once‑healthy companies suddenly fail.

4. Customer experience declines.

Signs include:

• Longer wait times

• Fewer support staff

• Lower‑quality products

• Higher fees

The brand looks the same — but it isn’t.

5. Employees feel the pain first.

Common outcomes:

• Layoffs

• Reduced benefits

• Increased workloads

• High turnover

Morale drops fast.

6. Local communities lose out.

When decisions are made in distant boardrooms, communities lose:

• Jobs

• Local suppliers

• Long‑standing relationships

• Community involvement

The human element disappears.

7. Transparency drops.

PE firms don’t have to disclose much. That means:

• Less accountability

• Less visibility

• Fewer protections

You often don’t know what changed until it’s too late.

So What Can You Do?

You can’t avoid private equity entirely — they’re everywhere. But you can be more intentional.

• Pay attention when a company gets acquired

• Watch for sudden changes in quality

• Support independent businesses when possible

• Read recent reviews, not old ones

• Don’t assume a familiar brand is still the same

Awareness matters.

And Just to Be Clear…

Candle Cocoon fragrance oils are still Candle Cocoon. Northstar fragrance oils are still Northstar — even though we bought them, we haven’t changed them at all.

The love Thom put into Northstar is still there. And the love we’ve poured into Candle Cocoon from day one is still going strong.

I don’t know any other way to do business.