High-Growth Hair Care Products Brand: 16 Proprietary Formulas & Growing Subscriptions for B2B, DTC & Ecommerce Sales
This eCommerce company offers a fully branded proprietary professional hair care product line with 16 custom SKUs made in two facilities in the US. The products are sulfate and paraben-free, with 25 botanical extracts and sunscreens in every product. Reef friendly, gluten-free, cruelty-free. The company enjoys a strong customer base with repeat customers. They have a 13-year track record as a growing leader in the market, with a projected industry growth calculated to be $102 billion by 2024.
OPERATIONS
Sales are made through B2B and DTC eCommerce channels, with the company’s Shopify website accounting for 47% of direct-to-customer sales. They also have a growing presence on Amazon, which represents 15% of sales. The company has a marketing strategy that includes video tutorials, Instagram, Facebook, product photography, and subscriptions to extend reach and improve retention. In terms of supply and logistics, the company stocks and oversees three months’ worth of inventory in its warehouse, handling 50-200 shipments every day.
The company stocks and ships out of their warehouse, where they maintain three months of inventory in stock at all times, as they make between 50 and 200 shipments per day. Wet goods are ordered once a month while aerosols are typically ordered quarterly.
MARKETING AND KEY METRICS
The company benefits from a strong social media presence, with 14k+ followers on Instagram and nearly 9k on Facebook. Video tutorials posted on Facebook that offer helpful hair care advice and reviews have been an effective marketing tool to acquire new customers and re-engage with the existing customer base. They also have an affiliate program that offers 30% commissions to their affiliates.
The company enjoys increased B2B sales that include selling wholesale to licensed salons and to distributors of hair care products. Wholesale accounts now make up 32% of their profits, with another 7% coming from distributor sales. Short term strategies include targeting their marketing to big box retailers and using their Amazon platform for international expansion.
The company’s Average Order Value has increased from $47.77 to $50.14, while the website has introduced a Monthly, Bi-Monthly, or Quarterly shipment through a subscription program for all their products.
Their loyal customer base is made up primarily of women between 45-60 years of age with fine, thin hair looking for specific products every day. This means that the customer base is highly focused, allowing the company to target its marketing more effectively.
BUSINESS MODEL & RESOURCES NEEDED
The current owner employs two full-time workers, one who handles administrative duties and sales, and another who oversees the warehouse. A marketing agency oversees their website maintenance and advertising campaigns.
THE INDUSTRY
The hair care industry is thriving, with sales projected to reach $102 billion by 2024, with customers seeking all-natural or specific condition products and this industry has seen plenty of innovation with developing new products. The company’s products specifically targets women, particularly those between 45-60 years of age, with median income and fine, thin hair looking for specific products daily.
OPPORTUNITIES TO SCALE
The company has scale opportunities that include targeting their marketing to big box retailers and using their Amazon platform for international expansion. Expansion to markets outside of the US and Canada can help untap new possibilities.
Asking Price: $2,400,000
Gross Income: $1,009,461
Cash Flow: $266,351
Year Established: 2009
Employees: 3
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