swoon investor deck_9.13
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TRANSCRIPT
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Lipstick Effect
Customers Crave: Low cost luxury goods that lift their spirits and deliver big bang for their buck
U.S. retail sales of cosmeceuticals at $9.7 billion with ongoing annual sales gains expected to boost the market to
$11.7 billion by 2016
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Swoon Delivers
Part Spoon | Part Applicator | Powerful Product Extender Say goodbye to lost gloss!
Applicator supplied by manufacturer can’t reach all the lip gloss
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The Problem Solved by Swoon
• Average tube of prestige lip gloss costs $22.50
• $4.50 worth of product wasted
• 25 million units shipped annually
• 100 million units sitting in homes today - $450 million saved!
20% of lip gloss is paid for & not enjoyed by consumer
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Swoon is an Overdue Product
“Don't you hate it when you're almost out of lip gloss and you can see more inside the tube but can't reach it with the applicator? Me too. I taught myself this trick back in high school so I could remove the stopper and scrape every last bit of lip gloss off the sides of the bottle."
"I cut the tube in half with a pair of scissors and use a cosmetic spatula... Usually I can use this for a couple more weeks!"
"I would definitely go with a Q-tip. My next thought was a pipe cleaner but that might hurt!"
“The trick, she told me, is to remove the 'wand wiper' which allows the wand to reach further to the bottom and closer to the side walls."
Keisha Wright, Founder & CEO
Lip Gloss Lover | Marketing Executive
• Decided to solve the problem
• BA from Stanford and years of marketing experience at Macy’s, the NBA and Nickelodeon
• Leads overall company vision, product strategy, marketing and customer support
Anthony Franklin, President & COO
Guy Who Loves Girl Who Loves Gloss | Business Development Expert
• BS from Stanford, MBA from University of Houston Bauer
• Over 20 years experience in business growth and sustainability, mergers & acquisitions and project management
• Leads operations including product quality, supply chain management, legal, finance, and business development
Inception
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Swoon’s founder is a self-proclaimed lip gloss lover. She loves its sheen, shine and the way it makes her pout perky. Despite her love for gloss, it caused her a significant point of pain. No matter the brand, the applicator never reaches to the bottom of the tube, causing her to toss tubes that still contained valuable product inside, until now…
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Introducing Swoon
A revolutionary, patent pending cosmetics tool for use in retrieving and applying every bit of gloss
from a lip gloss tube
Flexible application
neck
Elegant and easy to hold
Designed to reach every spot
Non-porous, easy-to-clean and flexible tip,
shaped like a fine calligraphy pen
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The Market • According to the NPD Group, the
lip color segment generated $548 million dollars in 2012
• 8% vs. 2011
• Lip applicator sub-segment
outpaced growth of the lip color segment , 9% YOY
$390 million U.S. Market
105 million women in
U.S.
80 million wear
lip gloss
26 million experience
point of pain
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Launching Swoon
PR Campaign pitching beauty blogger, short lead press Holiday Gift list story
Launch Indiegogo campaign/ website
Indiegogo fulfillment
PR Campaign pitching trade publications, promoting Cosmoprof exhibit
Cosmoprof order fulfillment; Consumer PR, digital marketing
Release to manufacturing
Cosmoprof Trade Show, Las Vegas seeking distribution at Specialty retailers
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Swoon Buzz
“OK, this is genius. And I totally JUST threw three Chanel gloss tubes away that still had gloss in them and I was cursing as I did… Send me one” -Melissa Stone Mangham, VP Marketing, Style Network
“Keisha Wright thought that it would be a good idea to create a solution to this age old problem by simply creating a longer wand (duh right?). Meet Swoon- The product that will allow your gloss to be great to the last drop.” -Glitter, Gloss, Garbage Beauty Blog “Swoon is a genius invention… a universal lip gloss wand that is part spoon, part applicator and allows makeup wearers everywhere to finally use every ounce of their lip gloss ...” “XO Swoon is clever”
– Jacqueline Laurita, Real Housewives of New Jersey
Business Model
B2C B2B Revenue | 85%
Beauty retailers
Specialty online aggregators
15% www.getswoon.com
Market to and become beauty brand of choice among glam gals who want the most puck for their
buck and a voice in future product development
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Swoon Pricing
The closest comparable product is the lip brush, which are designed to enhance application but do not save money.
Lip brushes range in price from $10 for a store brand to $40 for a prestige brand.
$15 - $1 $14 93%
Price
COGS
Gross Margin
Margin %
$7.50 - $1
$6.50 87%
Retail Wholesale
Selling Swoon
Indiegogo
Blogosphere Glitter, Gloss, Garbage Daily Beauty Review Examiner.com Wiles online magazine
Social Media @StyleQuickTips YourStyleJourney.com
PR Huffington Post People Style Watch Inside Edition
SEO
INCREASE AWARENESS CREATE BUZZ & DEMAND DRIVE SALES
SEO
Paid display ads
Social media
Blogosphere
Website Beauty Peeves Blog E-newsletter Video tips
Giveaways Jones Magazine MadameNoire* StyleBlazer* Events
PR Trade publications* Blogosphere
Industry influencer seeding
Web Promotions Free shipping More Puck for Your Buck (GWP) Seasonal multi-unit incentives
New products Trade shows
Cosmoprof – 7/2013* ECRM – 2/2014 HBA – 6/2014
1:1 Buyer meetings Ricky’s Ulta Sephora Trymbl.com Joyus.com Birchbox
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* Denotes confirmation
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Major Milestones Achieved
1. Friends & Family $55,000 funding round successfully completed.
2. Finalized design of company’s flagship product.
3. Successful launch of the company’s website.
4. Provisional utility patent granted by USPTO.
5. Successful prototype development phase concluded.
6. Manufactured first 500 units of Swoon lip gloss applicator for product seeding and awareness driving
7. Formal launch of Swoon, indie beauty company, and first namesake product at the largest beauty trade show in North America; recognized as Top 10 show innovation
8. Serious discussions with national retailers interested in launching our groundbreaking product nationally and internationally.
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Use of Funds Use of Funds %of Total
Product Design & Development Expenses $ 49,930 22%
Initial Inventory (N=10,000) $ 9,420 19%
Injection Molds $ 39,510 79%
UPC Code $ 1,000 2%
Sales & Marketing Expenses $ 122,500 55%
Digital Marketing & PR $ 77,500 63%
Company/Product Brand Development $ 40,000 33%
Trade Show Fees & Collateral $ 5,000 4%
General & Administrative Expenses $ 52,250 23%
Payroll $ 27,000 52%
Inventory & Fullfilment Management $ 6,000 11%
Intellectual Property Management $ 5,000 10%
Travel $ 9,000 17%
General Legal Services $ 2,500 5%
Accounting Services $ 1,500 3%
Office Supplies $ 750 1%
Business Insurance $ 500 1%
Total $ 224,680 100%
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Financial Projections 2013 2014 2015 2016 2017 5-Year Totals
Market Demand
Targeted U.S. Women 26,000,000 28,340,000 30,890,600 33,670,754 36,701,122 155,602,476
# of Overall Unit Sales 10,500 46,500 92,000 144,000 200,000 493,000
# of Unit Sales - Wholesale 10,000 40,000 80,000 120,000 160,000 410,000
# of Unit Sales - Retail 500 6,500 12,000 24,000 40,000 83,000
% of the Targeted Market 0.04% 0.16% 0.30% 0.43% 0.54% 0.32%
Revenue - Lip Gloss Applicator Only $ 67,500 $ 397,500 $ 780,000 $ 1,260,000 $ 1,800,000 $ 4,305,000
Wholesale $ 60,000 $ 300,000 $ 600,000 $ 900,000 $ 1,200,000 $ 3,060,000
Retail $ 7,500 $ 97,500 $ 180,000 $ 360,000 $ 600,000 $ 1,245,000
Cost of Goods Sold $ 9,891 $ 43,803 $ 86,664 $ 135,648 $ 188,400 $ 464,406
Gross Margin $ 57,609 $ 353,697 $ 693,336 $ 1,124,352 $ 1,611,600 $ 3,840,594
Gross Margin % 85% 89% 89% 89% 90% 89%
Product Development $ 40,000 $ 40,000 $ 60,000 $ 90,000 $ 120,000 $ 350,000
Sales & Marketing $ 36,500 $ 75,000 $ 117,000 $ 189,000 $ 270,000 $ 687,500
General & Administrative $ 9,000 $ 75,000 $ 234,000 $ 378,000 $ 540,000 $ 1,236,000
Total Operating Expenses $ 85,501 $ 190,000 $ 411,000 $ 657,000 $ 930,000 $ 2,273,502
Operating Income $ (27,892) $ 163,697 $ 282,336 $ 467,352 $ 681,600 $ 1,567,092
Operating Margin % 0% 41% 36% 37% 38% 36%
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Future Product Development
Future product development will be guided by the “lip stick effect,” the theory that consumers are more willing to purchase lower cost luxury goods that lift their spirits and deliver big bang for their buck, and the success of “cosmeceuticals” which deliver curative and preventative benefits on top of cosmetic ones.
• Disposable Swoon
• Swoon Perfect Pout Lip Scrub
• Smooth as Silk Shave Oil
• Pedi Pick Me Up – A soothing salve for use between pedicures
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Competition
Product Function Distribution
Beauty Spoon ™
• General beauty product scoop/use (creams, lotions, serums)
Spatty & Spatty Daddy ™
• General beauty product scoop/use (creams, lotions, serums)
• Food scoop
Beauty Spatula ™
• General beauty product scoop/use (creams, lotions, serums)
Swoon
• Specific Use – lip gloss scoop/applicator