I Doubled My Hair Products Business to $100K/Month [Update]
This is a follow up story for Ugly Duckling. If you're interested in reading how they got started, published over 6 years ago, check it out here.
Tell us about what you’ve been up to! Has the business been growing?
We went through the big slowdown after the end of Covid like most e-commerce players. So this caused us to do some deep thinking and rethinking about our business.
We asked ourselves once again why customers bought from us, what they liked about us. We were convinced that the future lay in products which were genuinely unique, not available elsewhere in the beauty market and which produced results that no other products did. In the process we got rid of around 70 products which were not doing anything that great for our business and doubled down on the products that were really popular: our blonde toners, our bleaches and our haircare with bond protect and purple toning.
At the same time we started to develop many new innovative products. So our launch calendar has been really intensive in the past 15 months. In January of 2024 we launched a new type of toner called Blondify. It's a 10 minute gel-based toner, really nicely pigmented and it's ammonia free and works in just 10 minutes. It's proven to be really popular. We added to that in January of this year (2025) with a range of 10 minute gel-based grey coverage colors for blondes. It's aimed at women who want to cover grey hair and go blonde. That has always been a big area where products on the market did not really work too well. Our new product range is called Color Gel. In April of this year and again in September we are going to be coming out with some more new products.
So in the process our whole product catalog has been really extensively reworked. 30% of it is brand new and the rest 70% are all really popular fast-movers with an established following.
So that's on the product side.
The other things we had a really deep look at was our cost structure and our profitability. Just to remind you all that our business is entirely self-funded. Since COVID costs went up pretty much right the way through our supply chain...cost of product, cost of sea freight and handling, and then most significantly cost of fulfilment.
We took 3 steps to fixing the P&L. 1. We increased prices by around 10-12% across the board. 2. We limited free shipping to orders above $100 (as opposed to $30). 3. We changed fulfilment center to one that specialised in e commerce and was very good at doing things economically. 4. With a reduced SKU count we are able to reduce our inbound shipments. We are targeting at doing only 4 inbound shipments per year. This will save our freight and inbound handling costs.
The net result of all these is that our gross margin is now above 50%. Which is a great achievement and one that should help the business grow a lot.
Lastly we had a another look at our customer acquisition strategy. Ever since the arrival of AI in google search results organic rankings for merchants have been quite badly hit. Most of our non-brand traffic used to come from customers asking questions like "how long do I leave bleach in my hair" and how do I apply toner to my client's hair"....that sort of thing, and the arrival of AI has meant that AI answers come on top ahead of blogs.So we've compensated for the fall in organic traffic by that in 2 ways.
First, we have started going into google advertising. In the past we had used Meta extensively, and indeed that was how the business was first created in 2016 - 2019. We had spent as much as $250,000 on Meta advertising but that was when Facebook actually worked. We had stopped all that because we could see that people did not react in the same way to Facebook posts and ads. So now we have moved to Google. So far the results have been very promising, so I am looking to scale this up in quiet a significant way. We will budget advertising costs at 10% of sales.
Secondly, we are doubling up on off-line activities. 2025 is going to see us participating much more in trade shows. We want to get up physically in front of the consumer, hairdresser and wholesaler. I want this to be an alternative way of reaching our clients.
In 2025, our business should be up in sales by around 25% versus 2024. And our gross margins will be as I said 50% - enough to finance our ad spend.
