Purpose
This proposal outlines your (Moon Boutique Salons) predominant options for the expansion of your product line, and the obstacles that you're likely to face along the way. This includes expansion into other salons and retailers, as well as the pricing dilemmas that this wholesale process may cause. I've listed below all of the options that I see. Let me know your thought!
Let's talk adaptability
The predominant obstacle for further wholesale is pricing. There are two solutions here:
- The first is for you to wholesale the existing product around the $27.00 mark, as opposed to the usual 50% markup rule. This would leave you with around $5.60 of profit on each sale, and allow for an MSRP of $48.00 - $52.00 (depending on how strict of an MSRP you want to set for your retailers). Keep in mind that I'll be able to offer you higher discounts as more product gets moving, so your profit margin would only increase.
- The second option is to produce a second line of cheaper product, which would allow for a lower final sales price. I have a second shampoo and conditioner base that can be used for this, and can be paired with a cheaper (but still nice) essential oil blend. A good marketing excuse to do this is by adding Silk amino acids (which are fairly cheap) and removing the Quinoa + Oat proteins (which are exorbitantly expensive). I'll compare your current shampoo and conditioner base to this new option below.
Your Current Base Product
This line of shampoo and conditioner is made entirely with plant extracts and their derivatives, meaning it's all natural. It also combines Quinoa and Oat proteins to replicate the protein balance found naturally in healthy hair. Other active ingredients include Nettle Leaf extract, Seaweed extract, Vitamin B5, Chinese Ginseng, and more. This is a very high end product line, produced using luxury ingredients that have been curated to fit the science of hair care.
The Proposed Second Base Product
The second line of shampoo and conditioner represents an even more affordable option for premium hair care. This line includes Silk amino acids, Vitamin B5, Aloe Barbadensis extract, Apricot Kernel oil, and more. This second option would make it possible to use high end aluminum packaging, while still keeping the cost lower than your current product. This is still a high end line, but it doesn't employ the same standards for luxury, natural ingredients as your current product line does. Let's call this line "B".
Updated pricing for your current line
16 Oz (473 ml) PET Bottle:
Order of less than 8 units: $23.75 each
8-15 units: $22.55 each
16+ units: $21.40 each
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4 Litre Back Bar: Was $200.00, Now $170.00
Next discount tier (order of 2+) = $157.25 each
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This reduced pricing is possible due to the expansion of my own company. I now qualify to get higher discount tiers from my suppliers, simply because I have more clients to consume the base product.
Wholesale pricing for Line "b"
16 Oz (473 ml) Aluminum Bottle:
Order of less than 16 units: $19.50 each
16-31 units: $19.00 each
32-63 units: $18.50 each
64+ units: $17.75 each
16 Oz (473 ml) PET Bottle:
Order of less than 16 units: $15.00 each
16-31 units: $14.50 each
32-63 units: $14.00 each
64+ units: $13.25 each
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4 Litre Back Bar: $100.00
Next discount tier (order of 2+) = $95.00 each
Hair Serum
One of my suppliers specializes in hair care, and is able to develop hair oils for your brand. For reference, this is the same supplier that manufactures the base product for your current line. They do have a formulation fee of $110.00 per product, but the products qualities, scent, etc... would be completely custom. I'm not sure if this is something you're still interested in, so let me know your thoughts!
ingredient opportunities
These are a few of the other interesting ingredients I carry. Any one of these (or combination of them) could warrant a product based around it's properties.
1.) KeraVeg18: A vegetable based alternative to animal keratin that has properties similar to (and in some cases better than) animal keratin.
2.) Fision HydraTress: A plant derived hair moisturizing blend which includes hydrolyzed proteins and hyaluronic acid to provide 24 hour frizz control with shine and smoothness.
3.) Rosemary Extract: Separate from rosemary essential oil, the liquid extract enhances blood circulation to the scalp. This aids in hair growth and nurishment.
Let me know your thoughts!
I'm more than happy to discuss the specifics with you. I also have some ideas on how I can help you manage the logistics as things continue to expand, but these would require some dialogue as the implementation might be awkward.