If location, location, location is the key to real estate, then distribution, distribution, distribution is the key to the skincare business.
We have scores of would-be entrepreneurs who visit us every year and want to start a business. Sometimes they have a unique formula (already made usually in their kitchens), or an innovative blend of ingredients
There are many great ideas. However, one of the first questions I ask is, “What is your distribution?”
Some have it planned out (we’ll discuss later) while others say, “I don’t really know” and then proceed to talk about selling at Macy’s or Nordstrom plus Walmart and marinas and of course, drug stores. Those that think they can take an unknown product and cross several different sales categories either have a huge advertising/promotion budget or are kidding themselves.
There are others (and it happens more and more frequently) that believe all they must do is build a web site and wait for the business. I call this the “Field of Dreams” distribution…. Build it and they will come. Well, as great as the internet is, that is not the case. Again, driving a web site only distribution is difficult and costly. It takes a great deal of time and money. People who have not researched this well may be shocked at the customer acquisition cost and other expenses that can occur.
Web site distribution works great if you have a situation where entities are “feeding” your site. People who are already exposed to the product and like it, will seek you out online.
A perfect example of this is Absolutely Natural, a company I have owned for 27 years. With virtually no advertising or promotional budget for the first several years of being in business, we were still able to build a great mail order service because we had trained salesmen at resort hotels representing our products to hundreds of people a day. We accomplished that without the benefit of the internet because it didn’t exist. Now after 20 years of having a web site, an important part of our business is direct to consumers. And, even though we do some search optimization and other social media efforts, most of our customers still come from the resort hotels where they were first introduced to natural sun care.
We find that those with the best chance of success, either already has a distribution network and are adding to their sales offerings or have an outlet for the sales with connections because of past efforts.
For example, we have a customer who has turned an initial order of 600 units to more than 500,000 units a year with a proprietary formula MONAS developed, as he was quite well known in the tattoo industry. He took that hard-earned, sterling reputation and was able to play off that to create an amazing, successful business. People in the tattoo world knew him and trusted him.
We have another successful entrepreneur who has more than a million people follow her social media including a huge following on YouTube. Where she once reviewed other products, she now has her own products as part of her presentations… Ready-made customer base.
At MONAS we can not only help you design and build a great product line, but we can also evaluate your potential distribution plan and give some valuable guidance there as well.