Beauty Supply Store Business Plan
This beauty supply store business plan sample is focused on the growing ecommerce sector in Las Vegas, Nevada. We hope this sample provides you with a brief foundation for starting your own beauty supply company. Our beauty supply store business plan writers crafted this sample for your review.
Executive Summary
“Plom, LLC” (herein also referred to as “Plom” or “the company”) was incorporated on February 8, 2022 in the State of Nevada by Founder and CEO, Emma Olive. Plom is an e-commerce store selling an array of beauty products directly to the melanated community and to global-majority owned retailers across the United States.
The beauty industry, and particularly the products specific to the melanated community, are booming. According to McKinsey, black consumers spent $6.6 billion on beauty products in 2021, 11 percent of the total $60 billion beauty industry. Spending in this segment is robust among Black Americans, a growing group of 41 million people with increasing spending power. While this is not inclusive of the entire melanated community, this is emblematic of the growing number of new brands and entrepreneurs who want to provide products to a historically underserved community.
Searching through the aisles of stores and browsing websites, Emma found herself unable to find a selection of products which catered to her needs as a member of the melanted community. Products were typically only for caucasian women, or not optimized for her needs. Initially, to solve the problem, the focus was on a YouTube educational channel which provided individuals the ability to learn more about products in the melanated community. This included skincare products, routines, and other helpful how-to videos. As the vision evolved, something bigger emerged. Moreover, another opportunity was presented in Emma’s mind: what if there was one platform where members of the melanated community could buy ethically sourced beauty products for them; as they have faced so many challenges in the past? Plom was born, and the vision has been supported by this experience ever since to help others who face similar difficulties.
As an operations professional, Emma’s strengths enable Plom to become a leader in the market as the company is focused on a 100% e-commerce dropshipping model. The company will use a Shopify store with various integrated ERP systems. This ensures that the cost of goods sold is kept to zero or minimal, so the remainder of the operating profit can be invested towards robust sales and marketing initiatives. Sales are primarily sourced from consumers and retailers through wholesale prices as contractually agreed-upon terms, which are custom drafted per each brand or retailer, providing value for both parties.
The melanated community continues to thrive despite the underrepresentation in the beauty industry over the years. This opportunity is where Plom can bridge the gap between the melanated community beauty needs and ethically sourced products. The company embodies inclusiveness in the marketplace and creates a space for individuals to have opportunities as the global majority.
Business Overview
Plom was founded by Emma Olive. In her quest to find quality and suitable haircare and beauty products for her personal needs, she realized the need to create a single platform that can provide various options for a multicultural world. This experience motivated her to start Plom.
Ms. Olive also discovered that there are many companies, both start-ups and established ones, which offer products of high standards but have limited reach to the right market. Although some of these companies found the support of their niche market, she believed that there is more room to improve brand awareness in the melanated community and to help these companies reach their highest potential.
It is her desire to gather these companies together and build an ecosystem where consumers will have a heightened awareness of these products and can easily access them. This passion has given birth to Plom, an e-commerce website that will house various beauty products such as skincare, haircare, makeup and wellness products for the melanated community. This platform will showcase a variety of brands directed to provide the exact need of its multicultural consumers. The company will also partner with retailers and provide a superior level of both direct to consumer and B2B service.
Mission Statement
Our mission is to provide our customers with the widest selection of beauty products, regardless of race, religion or personal beliefs.
Vision Statement
Our vision is to build a community which provides everyone a chance to feel good and accepted by all.
Core Values
Plom is guided by a set of core values that form the foundation of all business operations and decisions.
- Community as Partners to Success
Plom values the community and every employee by developing and implementing best business practices. The company is committed to maintain mutually beneficial gains and support long term relationships. To do this, we will support individual growth, appreciate cultural uniqueness and celebrate milestones. This requires accepting and acknowledging everyone. - Empowerment fuels Creativity
When one is empowered, it builds confidence to do more. Empowered employees are highly motivated and committed to achieve goals. Ultimately, this results in trust toward leadership, increase in employee satisfaction and delivery of responsibilities. - Efficiency and Effectiveness is basic to excellence
We are responsible to our partners and value their investments. As such, we will collaborate to ensure delivery of products is at its highest standards, most competitive prices and in the fastest way possible. Excellence is a result of this commitment. It involves continuous search and discoveries of the most cost efficient way to manage the business and keep fully satisfied customers. - Variety makes stronger organizations
A strong team involves acknowledging the uniqueness of each member and making intelligent use of it. This diversity brings different skills, experiences and capabilities to the team creating more opportunities for everyone. We want our employees to respect the differences and strengthen the foundation of the team to achieve results. - Support to Black and Brown-owned businesses
It is our commitment to go to great lengths to nurture and preserve our partner’s businesses. We believe that this is a competitive advantage to the company as we continue to strengthen consumer awareness of the existence of excellent products within our community.
Market Analysis
Plom will conduct business in the beauty products industry specifically to the melanated community through e-commerce, particularly dropshipping. Below is a market analysis of the beauty and personal care products market and dropshipping. This also details beauty products in the melanated community subsegment.
Beauty and Personal Care Products
The beauty and personal care products market was valued at USD 474.7 billion in 2021, and it is projected to register a CAGR of 4.62% during the forecast period, 2022-2027. Meanwhile, the North American Beauty and Personal Care Products Market is projected to grow at a CAGR of 2% during the said forecast period.
The COVID-19 pandemic dealt a massive blow to brick-and-mortar beauty and personal care stores across the world. Store closures and manufacturing halts significantly decreased sales as many companies’ operations were halted due to the lack of inventory and/or access to the market. Supermarket chains and convenience stores were also affected by this major disruption. With this, companies had to pivot and sell through online retails channels, which saw significant increase as of late.
The increasing awareness of customers about their appearance is one of the major reasons driving market expansion. Millennials are increasingly using beauty and personal care items such as skin care, color cosmetics, and hair care as part of their regular grooming routine. The emergence of cosmetics with natural, non-toxic, and organic components has also aided market expansion. Also, improving quality of life, the positive effects of beauty and personal care on self-esteem and social interaction, and the gradual consumer shift toward premium and luxury cosmetic brands are a few factors that are likely to propel the market growth during the forecast period.
The changing and busy lifestyles of the consumers in the region have led to a rise in demand for multifunctional beauty and personal care products as the consumers are following holistic approaches to beauty and health care rather than treating each as a separate segment. Consumers are looking for products requiring minimal application time and prioritizing quality over quantity, leading to increased demand for premium beauty products. Companies have turned to production facilities locally due to a growing demand for “Made in the USA” products.
With the growing demand for organic ingredients, consumers across the world are inclined toward organic personal care products, which is expected to drive market growth. Furthermore, the rising awareness about the harmful effects of chemicals and synthetic products is another factor augmenting the growth of the market. Most of the consumers tend to buy products with natural or organic labeling, which is driving the market growth.
The region provides many brands with opportunities for innovation and expansion regarding color cosmetics. Skincare and haircare are the major growing segments in this region. Brands are building their equity by focusing on ambassador marketing and improving relations with macro and micro-influencers. Celebrities and successful individuals within the entertainment industry are banking on their large fan bases and social media followers by launching their product lines in the market.
African American Shoppers of Personal Care Products
African American women are traditionally known to rely on salon visits and professional styling products to maintain their hair and had to make some drastic adjustments during lockdown. The widespread disruption brought on was evidenced by the 41% of African American women who indicated that the COVID-19 crisis prompted changes to their hair styling and maintenance regimens.
The swift transition from salons to consumers’ homes caused African Americans to dramatically increase purchasing for hair care products, and they’re now 2.4x more likely to buy hair treatments compared to the average beauty shopper. Similar to the Hispanic segment, low-income shoppers account for a much larger share of African American beauty buying households (43.3%) and dollars (39.1%) than middle and high-income shoppers, meaning retailers need to hone in on value-based products and execute promotions when targeting multicultural consumers.
The sharp rise in Black-owned beauty brands has allowed African Americans to discover an entirely new world of products that are specifically geared towards them and their at-home needs, further fueling consumers’ newfound preference for natural beauty and DIY self care. Black-owned brands and brands who have spoken out about social justice causes have been heavily resonating with this segment, and 39% of African Americans expect to purchase more products from Black-owned brands while another 29% plan to purchase from brands that have spoken about the Black Lives Matter movement.
The Black Lives Matter movement caused multicultural consumers to demand more representation and options from beauty brands and retailers, says NielsenIQ. These shoppers will gravitate toward brands which align with their social values and products that are specifically tailored to their skin and hair care needs.
Health and wellness will remain a priority for most, meaning multicultural consumers will continue to seek out products with organic, natural and cruelty-free claims. As we prepare for a shift toward normalcy and more consumers feel comfortable venturing out of their homes and attending social gatherings, the demand for beauty and personal care will further accelerate. Categories that experienced steep declines will regain their relevance, but will need to consider newfound consumer preferences.
African American consumers, alongside Hispanics, have a track record of far out-spending other ethnic groups when it comes to beauty and personal care, and we can expect multicultural consumers to fuel cosmetics growth into 2022 as they look for products that enhance their natural beauty rather than mask it, concludes NielsenIQ.
The Beauty Industry for the Hispanic and Latinx Communities
According to the U.S. Census Bureau’s 2020 data, the Hispanic community accounted for almost half of overall U.S. population growth, which was the slowest growth rate since the Great Depression. By comparison, the non-Hispanic growth rate over the last decade was 4.3%. The Hispanic share of the U.S. population grew to 18.7% of the U.S. population, up from 16.3% in 2010. Furthermore, the share of the white population fell from 63.7% in 2010 to 57.8% in 2020, the lowest on record, driven by falling birth rates among white women compared with Hispanic and Asian women. The non-Hispanic white population shrank from 196 million in 2010 to 191 million.
“The U.S. population is much more multiracial and much more racially and ethnically diverse than what we have measured in the past,” said Nicholas Jones, director and senior advisor of Race and Ethnic Research and Outreach, The U.S. Census Bureau.
According to Mintel, Latinx women spent over $2 billion on cosmetics in 2019. Research from Nielsen shows that these consumers spend 30% more than other ethnicities on beauty products as Latinx women spend $167 annually on beauty versus $135 spent annually by general population consumers. Overall for the Latinx community, the mindset on beauty is similar across all life-stages, creating a significant opportunity for brand loyalty. However, marketers must still communicate in relevant and authentic ways across each generation. For example, brands have created Telenovelas to draw consumers into their brand, and tell the story of how natural ingredients were used to formulate the product. Beauty is a significant part of every Latina’s upbringing. Women are taught that Vanidad (translates to vanity in English) is a positive attribute. From a young age, mothers and grandmothers instill that beauty is part of their lives and pass on their secrets to them.
The Beauty Industry for the Middle Eastern Community
The Middle East is known to spend quite a bit on beauty products. Grooming and pampering are part of the culture with one of the highest spending on beauty globally. The region is playing catch up on conscious beauty, and it is changing the way Arab women look at various beauty rituals. The beauty and personal care marketing in the Middle East and Africa region is worth $33 billion as of 2021 and is expected to reach $39 billion by 2025, according to Euromonitor.
One of the key areas of growth in the Middle East will be clean or green beauty. While there is no regulated definition, industry insiders use the term for products made with natural ingredients, chemical-free and nontoxic. One of the largest luxury brands in the Middle East, the Chalhoub Group, is known for successfully launching its concepts in beauty (such as beauty chain Faces) and fashion (Level Shoes). Additionally, this company is the local partner for Sephora and many other leading international brands.
Dr. Lamees Hamdan, an Emirati, launched Shiffa Beauty in 2004, whose brand “Shiffa” means “healing” in Arabic. She found her inspiration in Middle Eastern traditions. It is one of Sephora store’s best-selling brands across the Gulf region and retails in Nordstrom in the US. She says, “I believe that within the next decade, all doctors will be schooled in herbs as a first-line treatment for disorders.” Hamdan started the brand when she was pregnant with her first child, and her first product was a healing balm designed to help pregnant women with stretch marks. She even received a shout-out from Kim Kardashian.
This region’s young population is more aware of the need to be more conscious about their consumerism which is why the global skincare industry is looking to fill this gap. Generation Z and millennials are demanding greater transparency as they move towards clean beauty products. There is a definite gap in the market for more homegrown beauty brands. Clean beauty will rise in the region over time. It is known that global trends continuously trickle into the Middle Eastern market with time. There is an interest, of course, as natural ingredients have long been part of beauty rituals in the Gulf. However, conventional beauty products likely will not lose their hold on their market. Arab women have an appreciation for beauty and will add conscious or green products to their beauty regimes, but may not let go of the products they already buy.
Beauty Products in the European Melanated Community
Within the European cosmetics market, Germany consumed the largest amount of cosmetics in 2021, valued at approximately 13.6 billion euros. The major ethnic groups within the country part of the melanated community are the German Roma and Sinti. There are 300,000 individuals within the Romani community in Germany and 10 to 12 million in all of Europe. This figure for cosmetics was followed by France and Italy, at approximately 12 billion euros and 10.6 billion euros, respectively. Type IV pigmentation is frequent among populations from the Mediterranean and Romani people. It ranges from brownish or darker olive to moderate brown, typical Mediterranean skin tones. This skin type rarely burns and tans easily. Additionally, within France alone there are 3 to 5 million people of black African descent and the UK, Spain, and Italy follow with approximately 1 million each. It is difficult to collect such data, however, as certain countries such as France prohibit the collection of racial and ethnic data. Certain estimates as a result have to be created. For melanated brands to market effectively it is important to understand the diverse makeup of each European country.
The cosmetics and personal industry has been thriving in Europe as more consumers become increasingly aware of the importance of health, wellness and personal care products. Skin care continues to be the dominant force in the cosmetics industry in Europe, having more than 27 percent of the European cosmetics market in 2019. In the following year, France had the highest number of small and medium-sized enterprises (SMEs) specialized in the manufacturing of cosmetic products in Europe. Compared to Italy’s 735 cosmetics SMEs, France had around 840.
L’Oréal, Nivea and Guerlain are currently the top three leading cosmetic brands in Europe in terms of brand value. The skin and body care brand Nivea, manufactured by Hamburg-based German company Beiersdorf had a worldwide brand value exceeding six billion U.S. dollars in 2021. With the rise of social media and its significant influence on consumer groups, particularly in the areas of body image and personal care, cosmetics brands that enjoy powerful social media presence and appeal will be those that succeed in the long-term. As of March 2022, the beauty brand with the highest number of Instagram followers is Kylie Cosmetics, garnering approximately 25 million followers.
Dropshipping Market
Because of the growing popularity of online shopping and the growing tendency of cross-border e-commerce trade, the global dropshipping market is expected to develop significantly. As a result, the surge in demand for dropshipping services is mostly affected by the e-commerce industry’s expansion. Dropshipping is the practice of selling things through online storefronts where the retailer does not maintain a stock of goods. Instead, the retailer sends the customer’s purchase and shipping information to a wholesaler or manufacturer, who then sends the goods straight to the consumer.
Smartphones have transformed online shopping by providing a plethora of mobile applications that make the process simple and comfortable for customers. Rapidly increasing penetration of smartphones, combined with rising consumer disposable income, is likely to boost the e-commerce market and, as a result, the demand for dropshipping services is anticipated to rise. The number of customers who choose to buy online has resulted in a significant rise in investments by the major companies in the e-commerce sector.
Government Regulations
The FD&C Act defines cosmetics by their intended use, as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body…for cleansing, beautifying, promoting attractiveness, or altering the appearance” (FD&C Act, sec. 201(i)). Among the products included in this definition are cleansers, moisturizers, perfumes, lipsticks, fingernail polishes, eye and facial makeup, cleansing shampoos, permanent waves, hair colors, and deodorants, as well as any substance intended for use as a component of a cosmetic product. It does not include soap.
FDA’s legal authority over cosmetics is different from our authority over other products we regulate, such as drugs, biologics, and medical devices. Under the law, cosmetic products and ingredients do not need FDA premarket approval, with the exception of color additives. However, FDA can pursue enforcement action against products on the market that are not in compliance with the law, or against firms or individuals who violate the law. In general, except for color additives and those ingredients that are prohibited or restricted by regulation, a manufacturer may use any ingredient in the formulation of a cosmetic, provided that:
- the ingredient and the finished cosmetic are safe under labeled or customary conditions of use,
- the product is properly labeled, and
- the use of the ingredient does not otherwise cause the cosmetic to be adulterated or misbranded under the laws that FDA enforces.
Market Trends
Growing Inclination towards Natural/Organic Formulations
Growing concerns regarding the side effects of chemicals in personal care products, which lead to ailments such as skin irritation, allergies, and skin dullness, have been fueling the demand for natural and organic skincare products. Prolonged use of synthetic cosmetics may cause various health issues, such as irritation, hormonal imbalance, and toxicity. However, cosmetic products made of organic ingredients, such as plant extracts and natural oils, do not leave any harmful impact on the skin. Natural skincare and cosmetic products that are free from chemicals and transparent about the content have been preferred by consumers, which is likely to drive demand for natural skin care products. This factor has resulted in a shift in preference from synthetic skincare products to organic products among consumers.
To capitalize on this growing interest, the manufacturers in the market have been revamping and expanding their product offerings by introducing a wide range of organic skincare products containing plant-based, clean-label ingredients, with claims such as ‘organic’, ‘vegan’, ‘natural’, ‘chemical-free’ and ‘cruelty-free’, among others. For instance, in April 2022, Shiseido revealed a new skincare brand Ulé, which sources pesticide-free botanicals from local vertical farms. Thereby, dissemination of knowledge related to the benefits of natural skincare has led consumers to seek eco-friendly, sustainable, natural skincare/personal care products that offer greater product ingredient transparency.
Clean Beauty Products Highlight Equity Gap
Women of color have higher levels of beauty-product related chemicals in their bodies compared to white women, according to a commentary published by a Milken Institute School of Public Health researcher. Ami Zota, a GW assistant professor of environmental and occupational health, said reproductive health professionals must be prepared to counsel patients who have questions about chemical exposure. Health professionals can also promote policies that protect women from harmful chemicals in cosmetics and personal care products.
Previous studies have documented that Black, Latina and Asian-American women spend more on beauty products than the national average, often because of marketing practices that emphasize a European standard of beauty, said Dr. Zota and co-author Bhavna Shamasunder at the Occidental College in Los Angeles. “Pressure to meet Western standards of beauty means Black, Latina and Asian American women are using more beauty products and thus are exposed to higher levels of chemicals known to be harmful to health,” Dr. Zota said. “Beauty product use is a critical but underappreciated source of reproductive harm and environmental injustice.” Women of color are more likely to buy products like skin lightening face cream, which often contain hidden ingredients such as topical steroids or the toxic metal mercury, Dr. Zota said.
Black women are known to suffer more anxiety about having bad hair and are twice as likely to experience social pressure to straighten their hair. Hair products like straighteners, or relaxers, are likely to contain estrogen and can trigger premature reproductive development in young girls and possibly uterine tumors, as the commentary reports. Studies also show beauty and personal care products contain multiple, hidden chemicals that are linked to endocrine, reproductive or developmental toxicity.
These chemicals can be particularly dangerous for women between ages 18 and 34, the authors said. Women in this age group are identified as heavy buyers and purchase more than 10 types of beauty products per year. These buyers and their children may experience heightened vulnerability to such chemicals, especially if exposure occurs during pregnancy.
Asia-Pacific Emerges as the Fastest Growing Region
In the Asia-Pacific region, countries like China, India, Japan, Indonesia, and Vietnam present considerable growth opportunities for the market players, primarily due to the growing millennial population. Amid the growing prevalence of hair thinning, loss of volume, dryness, and several other hair-related concerns among consumers, hair care products are emerging as the most affluent and cost-effective way.
Hence, the major players are intensely embarking on product innovation and mergers and acquisitions as their prime strategy to consolidate the market studied. For instance, in 2021, Kao Corporation, through its subsidiary Kao Salon Japan, launched its prestige hair salon brand namely, Oribe in Japan. The brand consists of 23 product line-ups that were made widely available in Japan.
Furthermore, growing awareness regarding cosmetics products, such as facial makeup, hairstyling and coloring products, is expected to drive the market’s growth in the near future. The demand for multifunctional products drives innovation, as price-conscious consumers opt for products that provide hydration and skin protection. Companies are constantly advertising cosmetics that provide medicinal benefits, especially on social networking sites, such as Facebook, Twitter, YouTube, and Instagram, where beauty bloggers are very popular. Some of the major key players in the beauty and personal care products market in Asia- Pacific are Beiersdorf AG, L’Oreal Group, Procter & Gamble, The Estée Lauder Companies Inc., and Unilever, among others.
Competitive Landscape
The global beauty and personal care market is highly competitive, with a strong presence of regional and global players in the market, where demand is mostly driven by more adaptation toward skincare routines and consumer awareness about brand know-how. The most active companies in the market include key players, like Procter & Gamble, Unilever, L’Oréal SA, Colgate-Palmolive Company, and The Estée Lauder Inc. L’Oréal SA is one of the most active companies, with numerous brand offerings and a broad range of beauty and skincare products across the region.
The companies have spent considerably on improving quality and product innovation in terms of ingredients, functionality, and packaging. The key players are embarking on merger and acquisition and product innovation as their key strategies to achieve consolidation and optimize offerings. Moreover, these players merge with local players to gain dominance in the local markets.
Major Players
- The Estée Lauder Companies Inc.
- The Procter & Gamble Company
- L’Oreal SA
- Colgate-Palmolive Company
- Unilever PLC
Recent Developments
- In May 2022, Estée Lauder with Shoppers Stop opened an exclusive SS Beauty store in Mumbai. With this establishment, the two companies have strengthened their partnership in India. The SS beauty store will offer only Estée Lauder brands like MAC Cosmetics, Clinique, Bobbi Brown, Jo Malone, Estee Lauder, Smashboxand Tom Ford.
- In March 2022, Colgate-Palmolive Company launched a new toothpaste, which is Visible White O2, this is an innovative whitening toothpaste that works from the inside out to lighten the stains. Its advanced formula releases millions of warm oxygen bubbles into the mouth.
- In January 2022, Procter & Gamble acquired luxury skincare brand Tula, which would bolster the company’s prestige brand portfolio. Tula is a clean skincare brand powered by probiotic extracts and superfoods. As part of the acquisition agreement, P&G Beauty will support the Tula team to drive brand growth and support expansion and innovation.
- In December 2021, L’Oréal signed an agreement to acquire an American skincare company, Youth to the People. This company is a California based skincare company.
Selling customizable beauty products
The global personalized beauty devices market is expected to expand at a healthy CAGR of close to 25.3% over the next decade, and cross a valuation of US$ 80.7 Mn in 2031 as customers are increasingly seeking personalization in their daily activities shifting from “one size fits for all” products.
Further, consumers are more inclined towards the trend of using personalized beauty devices and other connected beauty devices. As a result, top manufacturers are aiming to provide artificial intelligence (AI) based personalized beauty devices in the market which is highly adopted among the end users. Growing development and technological advancement are the major drivers which have propelled the demand for such devices in the market.
Moreover, advances in human life structures and genomic science have empowered beauty solutions to be customized to a person’s attributes or genotype, making them more compelling with rise in millennial population along with the geriatric population, ascend in prevalence of skin problems are some of the major reasons which is expected to drive the sales for personalized beauty devices in the coming foreseeable future.
Partnering with influencers/influencer marketing
Influencer marketing is a hybrid between traditional and conventional marketing strategies, combining elements of celebrity endorsements, digital marketing, and viral marketing. It is set to grow to over $16 Billion in 2022 as an industry, with platforms raising more than $800 Million in funding. The industry has grown to the point that nearly 20,000 firms now offer Influencing Marketing Services. In a recent industry benchmark report, more than 75% of brand marketers intend to dedicate a budget to influencer marketing in the coming years.
These “influencers” are paid either in monetary terms, free products, or a combination of both. They post product reviews on popular social media websites such as Instagram, Facebook, TikTok and YouTube. Mainstream brands are also taking advantage of these platforms. Zara, the global clothing retail brand, has an estimated reach of over 2 Billion. This contributes to their global sales and profitability.
Melanated beauty products sub-industry (black beauty products) growth
This industry is emerging, but there are still plenty of gaps wherein companies can focus on. Black brands make up only 2.5% of revenue in the U.S. beauty industry, however black consumers are responsible for 11.1% of total beauty spending. With limited options, they tend to be dissatisfied with available suitable products in major online and physical retailers. There is, however, an upside to this as only 4-7% of brands carried by specialty beauty stores, drugstores, grocery stores and department stores are black brands. This means that there is significant demand that has not yet been met by existing retailers.
Black brands in the beauty industry raise a median of $13 million in venture capital, substantially less than the $20 million that non-Black brands raise. Yet today, the median revenue of those Black brands is 89 times higher than what non-Black beauty brands return over the same period. Addressing racial inequity in the beauty industry is a $2.6 billion opportunity. Better serving Black consumers and supporting Black beauty brands could lead to greater equity across the entire beauty industry—for shoppers, entrepreneurs, large beauty houses, retailers, and investors.
Increase in Black Beauty Products (Melanated skincare, haircare, fragrance)
Despite the growing power of the Black consumer, brands have yet to cater to them properly, new data shows. A report from NielsenIQ shows the growing size and momentum of the Black beauty shopper, with buying power expected to reach $1.8 trillion in 2024. It is also younger and seeing higher gains in high-income households, the report added. “This is the way that America looks,” said Anna Mayo, beauty vertical client director, NielsenIQ. “We’re seeing a lot of growth across all levels of this consumer, and they are becoming a very dynamic force and driving the conversation forward.” Although hair care and fragrance performed well, Mayo said the results in skin care and makeup show considerable room to reach Black consumers more effectively.
Key Competitors
Thirteen Lune is an e-commerce platform that provides marketing and business support to Black and Brown founders. The goal is to reframe how Black and Brown beauty brands are perceived not only from an industry perspective, but also for the consumer, giving each brand a platform to educate and engage a wider audience. They promote skincare, makeup, hair care, and body and bath products of over 150 brands, primarily of ethnic ownership. They created and own two of the brands on their platform. Their motto is to be inclusive, and one of their key marketing channels is their “Shop Talk” brand.
BLK + GRN is an all-natural e-commerce marketplace powered by Black women artisans. With a focus on beauty and personal care products that do not contain toxic ingredients, the company features over 136 Black Artisan brands since 2018. They have Black health experts who carefully choose which products to feature on the website. Their product categories are: bath and body, skincare, beauty, grocery, hair, home, menstrual care, and mom + baby. They also have their own GRN branded products. For their marketing activities, they use blogs, social media, and podcasts as their key marketing channels.
Marjani is also an e-commerce platform that features nearly 100 carefully curated “Brown Girl Beauty” products ranging from skincare, facial products, lipsticks and tints, eye creams and makeup, hair products, body oils, salts and washes, and a limited product line for men. They curate brands that are authentic and independently-owned. For their marketing strategy, Marjani has a “Buy It, Try It” Foundation matching – a unique strategy wherein customers can buy full size foundation products with matching samples. The customers may keep it if it matches their skin tone. If it does not match, they may return the full size items as long as they are unopened. They also provide makeup sessions, free product consultations, an online skincare quiz, and a foundation finder online.
Products and Services
Plom will feature over 500 melanated brands on the website. A dropshipping arrangement is set with the brands, which are categorized into the following:
- Skincare: facial and body care products with an average unit price of $65; includes cleansers, toners, serums, moisturizers, masks, bodycare, and men’s skincare products.
- Haircare: for washing, styling and treatment; average unit price of $55; includes shampoos, conditioners, hair styling, hair treatment, and men’s hair grooming products.
- Makeup: foundations, nail colors, eye shadows and the like at $60; products categorized into eye makeup, lipsticks, foundations, nail products, blush and bronzers.
- Wellness: teas and supplements at $50; includes herbal teas, slimming teas, vitamins, and other supplements.
These beauty and wellness products are primarily owned by a global majority, small to medium sized businesses in the U.S., with a focus on customers with melanated skin tones.
Brand Partners: Plom’s website will feature some of the world’s most popular melanated beauty and personal care products. Below is a preliminary list of over 100 companies in the melanated products industry that will be featured:
Pricing Model
| Product | Average Price in USD |
| Skincare | |
| Cleansers | $25 |
| Toners | $25 |
| Serums | $75 |
| Moisturizers | $75 |
| Masks | $45 |
| Bodycare | $40 |
| Men’s | $45 |
| Haircare | |
| Wash | $20 |
| Treatment | $35 |
| Style | $45 |
| Men’s | $30 |
| Makeup | |
| Eyes | $25 |
| Lips | $20 |
| Foundation | $30 |
| Nail Color | $20 |
| Blush/Bronzers | $25 |
| Wellness | |
| Supplements | $50 |
| Tea | $25 |
Competitive Advantages
Wide selection of products: Plom will offer a wider range of products, and it will serve as the ideal place to shop for beauty products that will cater to the needs of those with melanin-rich skin. By identifying our niche, we will be able to solidify our market position and then target other sub-segments and other locations.
Brand engagement strategies: The company’s engagement in product selection, sampling program and early access promotions exclusive to members will benefit the brand two-fold. First, it will increase the overall quality and exclusivity of brands featured on the platform. Second, by engaging stakeholders such as business owners and customers, the company will be able to build a community which then leads to more loyal customers, referrals, and features.
Promotional events: Several promotions available in the Plom website may not be available in physical stores and in other competing platforms. Special discounts, early access to product launches, free shipping, and sampling programs are just some of the promotional strategies that will help increase brand awareness for the company.
Sustainability-driven business: Sustainability is a key part of Plom’s set of values. Aside from providing opportunities to minority-owned beauty and personal care businesses, it also has strong linkages with a wide network of small business owners. With the increasing importance of non-toxic and all-natural beauty products worldwide, focusing on sustainability will not just be a values-driven strategy, but also a good business move for the company.
Strong brand recognition: Plom is already widely recognized for quality, sustainability, convenience and support to melanated communities and business leaders. The overall brand image will also be boosted through continuous linkages with more brands and good customer service to the black and brown consumer segments.
Strong e-commerce presence: Plom has a strong e-commerce platform, having a responsive and secure website. Its content is also interlinked with social media platforms such as YouTube and Instagram, and the website will offer a live chat function to address immediate and urgent customer queries.
Building a Community: Ingrained in Plom’s core values is its support to black and brown communities across the US. The company intends to build a community of customers who have abundant choices and retailers who have access to a wide range of in-demand and high quality products. These form communities that are empowered and sustainable.
Sales and Marketing Plan
As a new, up-and-coming business, Plom will accelerate the company’s growth through high-value marketing activities. These aim to drive sales and increase the brand’s overall value. This section will serve as a roadmap to success for Ms. Olive and her future team members.
The primary sales strategy of the company will be the dropshipping model. This is an emerging supply chain strategy given that it does not entail Cost of Goods Sold, and that all operating profit can be reinvested to sales and marketing activities. Plom will sell through two primary channels: direct business-to-consumer and business-to-business.
B2C Sales: B2C Sales make up the majority of the projected revenue of the company, as reflected in the financial statements. This is a direct to consumer approach. Sales are generated through the website, Shopify, and eventually other e-commerce platforms. In order to attract B2C Sales, Plom will engage in various marketing and advertising activities, primarily on social media. The overall goal here is to build a community, through social media posts, monthly emails, events, giveaway contests, YouTube channel, and Facebook group.
B2B Sales: B2B Sales will be generated through partnerships and supply agreements with retailers, as well as venues like hotels, and one-off events such as beauty pageants and conferences. Plom will sell brand partner’s products at an agreed upon price (approximately 50% of the direct to consumer price) and the company will receive an approximate 2% fee on transactions with retailers. B2B Sales will be secured through forging institutional relationships, client meetings, and contract negotiations. Ms. Olive will take the lead in B2B Sales in the meantime, given her vast experience negotiating and overseeing supply chain management.
Seasonal Trends: The holiday season (November to December) is when sales of beauty and personal care products are projected to peak. During this time, customers purchase to prepare for Christmas and family gatherings. This is also the time for them to purchase such products to give as gifts to family members, friends, and colleagues. The holiday season generates the most revenues both on B2B and B2C channels.
This is followed by Spring (April to May), and Summer (June to July). The low season is during August to October, and this is a good time to prepare for new product launches, and conduct sales promos for “end of season” products.
Target Customers and Channels
There are two types of target customers: one for Business direct to consumers (B2C), and the other being retailers (B2B). Below is a table describing the two customer groups:
| Sales Channel | Demographic | Pain Point | Marketing Channel |
| Business to Consumer (B2C Individual Customers) | Females between the ages of teenage to the mature adult, middle-class income
($48,500-$145,000) Located mainly in urban areas Can purchase products through parents for teens, and through paying jobs for adults A small percentage of males with middle-class income |
Limited product choices for melanated customers
Very few dedicated stores for the ethnic market across the U.S. Having to buy traditional beauty products that may not be suitable for melanated skin tones, causing dissatisfaction and wastage |
TikTok, Facebook (B2C)
Instagram stories, posts, engagements YouTube short videos, walkthroughs, before and after, unboxing SEO and PPC marketing Brand ambassadors who will promote Plom – can be celebrities or community campaign |
| Business to Business
(B2B Retailers) |
Small business owners, as well as established/larger companies, beauty brands and manufacturers.
Can be physical, e-commerce or hybrid store setting Caters to a wide ethnic, global majority market Minority-owned businesses |
Difficulty finding steady supply of ethnic, melanated beauty and personal care products due to fewer choices in the existing marketplace
Missing out on key market segment of Black and Brown customers who end up buying their personal care products elsewhere Cannot take advantage of growing trend of ethnic, sustainable products |
Institutional partnerships and affiliations
LinkedIn (B2B) Supply agreements, memorandum of agreement Collaborations with Spas, Retailers, Brand Partners, Hotels, Conferences, Pageants through formal agreements and/or sponsorships Partnerships with charities and causes to boost the brand’s reputation through meaningful corporate social responsibility (CSR) initiatives |
Key Channels for the B2C Market
Plom Website: The company will launch the Plom website, wherein site visitors can access information about the company and its products in various forms such as blogs and videos. It also has an e-commerce component and customers can purchase beauty and personal care products at the convenience of their homes, via their laptops or mobile devices. The product categories are: Skin, Hair, Beauty, Men, and Wellness. The website also has a Shop All function, as well as links to marketing content and an email signup box at the bottom. Ms. Olive is working with a web developer on this.
Social Media Marketing: In 2022 there will be approximately 302 million social media users in the US, across popular applications such as Facebook, Instagram, Twitter, and TikTok. These channels are used to build the brand, grow the following, establish relationships and generate sales. Plom’s Facebook and Instagram pages will also be used to respond to inquiries and establish relationships with clients. Instagram will be the focus platform of Plom. The company will also use YouTube and TikTok to post and share video content.
Video Content: Short form videos such as the ones posted on TikTok, YouTube Shorts, and Facebook and Instagram stories and reels are currently viewed as one of the most effective and engaging marketing tools. In the HubSpot Blog’s 2022 Marketing Industry Trends Survey, they found that more than half of marketers (51%) who use short-form video plan to increase their investment in 2022. Meanwhile, 38% plan to continue investing the same amount. Also, short-form video has the highest ROI of any social media marketing strategy as 30% of social media marketers plan to invest in it more than any other trend in 2022. Plom will take advantage of this trend by creating short form videos demonstrating how to apply their beauty products, as well as “behind the scenes” and “before-after” video themes.
Pay-Per-Click (PPC) Ads: An online advertising model in which an advertiser pays a publisher every time an advertisement link is “clicked” on. Alternatively, PPC is known as the cost-per-click (CPC) model. The pay-per-click model is offered primarily by search engines (e.g., Google) and social networks (e.g., Facebook). The business will link PPC ads to Plom’s website. This includes the set up on Google, Facebook, Instagram and relevant social media sites. Sponsored ads are placed on these sites for prospects to view (as impressions) and click (as click throughs).
Search Engine Optimization (SEO): The process of making a website rank high in the search engine results pages (SERPs) for a certain keyword. This allows content to be visible and accessible to those searching for the term, or something similar to it. Plom may rely on this marketing channel, optimizing keywords such as “black beauty products”, “eco friendly personal care”, “sustainable makeup US”, and the like. Pay-per-click advertising can also be integrated in the overall marketing strategy of the company.
Email Marketing: Email marketing is a highly effective channel for Plom to increase the lifetime value of customers. When customers first buy, the company will put them into an email cadence which will ensure they are contacted about future promotions, events, and other key information from Plom. This will increase the person’s affinity and identification with the brand through content. This can also be repurposed in other marketing channels. The email list will be a critical aspect of the company communication, and not only customers, but prospects will have the option to subscribe for product updates and educational content.
Brand Ambassadors: Credible brand ambassadors offer various benefits to Plom. The most important one is giving the brand a boost on social media, spreading messages of positivity and community, and influencing consumer sales. The most effective are those who can provide customer service and act as spokespeople for the brand. Ms. Olive will also serve as a brand ambassador for Plom, given her content creation background. The company will also tap other consumers and influencers to help boost the brand in communities.
In Person Conferences: Conferences are an opportunity to highlight the Plom brand and work with partners to showcase their products. The company can host and brand their own conferences, or find others who would already put these on. Plom can solidify the company’s brand positioning even further with an in-person channel. There can be in-person demonstrations, how-to’s, beauty tips and tricks, and try-ons. Customers can also receive free samples while brands as well as retailers attend.
Key Channels for the B2B Market
Institutional Partnerships and Affiliations: The team will visit and pitch the products to the top retailers and events across the US, starting with California. This will be an opportunity to reconnect and strengthen relationships with existing buyers and registered brands under Plom. Partnerships with industry experts such as makeup artists and melanated entrepreneurs will also be established, and they will help promote the brand to their clients. The company will also seek the endorsement of the Professional Association for the Beauty Industry.
Collaborations with Spas and Venues: Spas, resorts, and other venues such as hotels and conferences usually buy personal care products in bulk, and they require huge quantities with quick turnaround times. The advantage of the dropshipping business model is that Plom will be able to tap into numerous suppliers at the same time. Ms. Olive will then be able to focus on supply chain management with brand wholesalers instead of producing the actual products, which is more efficient and of higher value to the company. Some events such as beauty pageants that need products for melanated skin can also be beneficial in terms of bulk orders and with public relations and event advertising.
Collaborations with Organizations with Good Cause: Trade certifications such as Fairtrade and FSC increase the brand value of Plom’s products, and also allows it to penetrate the growing sustainable beauty market. By creating categories for certified beauty and personal care products, Plom will be able to market to customers who support good causes such as equality, sustainability, and support to small to medium enterprises. One such cause is Amara Leaders, an organization dedicated to advancing the exceptional leadership of Black Women across industries.
Key Performance Indicators
Here are several key performance indicators that will be well communicated across the company, ensuring that Plom’s overarching goals are prioritized and achieved.
| Key to Success | Indicators |
| Service and Customers |
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| Financial Performance |
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| Human Resources |
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| Marketing and Advertising |
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| Regulatory, Health and Safety |
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| Website |
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SWOT Analysis
Plom formulated a SWOT Analysis to identify and analyze the organization’s strengths and weaknesses (internal factors), and opportunities and threats (external factors). This tool will help Ms. Olive and the management team in establishing business strategies, as well as prioritizing business activities.
| Strengths | Weaknesses |
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| Opportunities | Threats |
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Operational Plan
Plom was created to provide a venue where the melanted community can efficiently and effectively source and purchase a diverse collection of beauty products specifically for their needs. Black women spend nearly nine times more than their caucasian women on hair and beauty. The Hispanic community is a growing source for beauty sales and more likely to spend on hair care and cosmetic products than the general market. Furthermore, Asian-Americans spend 70% more than the average share of the U.S. population on skincare products, and are more likely to spend on premium brand name products and drive beauty sales through mobile and social media usage.
The company can capitalize on this market need by starting with a lean and tech-savvy employee base to focus on developing an attractive and user-friendly website. Plom will also need experts who can verify the compliance of partner-sellers to basic permits and licenses and the legitimacy of their products and its components to ensure its compliance to government regulatory bodies.
Operational Process
The company is primarily geared towards sourcing out and making products easily available to the melanated community. Plom will be a one-stop shop for beauty products from a wide-range of brand partners that are of high quality and appealing to its niche market. The company’s expertise is scouting small to medium-sized brands who provide products that are proven and tested to be marketable to its melanated community. The operational process for maintaining a B2C online marketplace, peer-to-peer stores, or a B2B wholesale markets involves the following:
- The e-commerce business must be built on e-commerce technology. Technology support for maintaining the website is a 24/7 activity and delivers products to customers. This will include providing the following:
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- Order management systems or a shopping cart
- Inventory Management
- Infrastructure Maintenance
- To survive the business, the company builds an attractive online store to present its products. Graphic designers and website content writers must always be on the lookout for various improvements and updates to the website on a regular basis.
- The backroom support performs the following:
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- Continually source new products to feature or promote
- Creation and update of the sign-up options, which is effective when shown side-by-side with the shopping cart
- Maintain and update customer personal and payment information
- Maintain or create an active response to customer queries or complaints
- Verify brand partner’s inventory against website inventory
- Ensure compliance to the Data Privacy Laws
- Develop marketing campaigns such as promos and offers to help increase sales and revenues on the website and social media platforms
- Work on tie-ups for the payment options
- Management of reviews and comments on social media sites
- Logistic platforms must be established. Shipping service integrations are essential for order fulfillment at the shortest time possible.
- Online payment transactions need to be guaranteed by providing customers with a guarantee that their payments are safe. This involves engaging with Accreditation certificates like Network Solutions, McAfee and other trusted companies to add a sense of security to customers.
- Sales are made to direct consumers and other businesses such as hotels and other B2B services.
Health & Safety
Plom is an online platform and has limited direct contacts to its customers. Most coordinations are done online using various communication technologies. Standards for health and safety will be applied for face-to-face activities with its business partners.
The company will ensure that its supplier-partners adhere to the Safe Cosmetics and Personal Care Products Act of 2019, a federal bill holding cosmetics companies accountable for safety of its products. At the same time, it will also keep itself compliant to FDA-regulations on the beauty industry.
Equipment & Inventory
Plom does not keep an inventory of the products sold on the website. Instead, most of its inventory will be coming from its partner-suppliers. Additionally, the investment will focus on the equipment and inventory below.
Equipment and Inventory List
- E-commerce platform
- Digital Payment System Contracts and Systems
- Business and Software License
- ISP Connection
- Servers and Backup System Development
- Domain Registry
- Office Supplies
- Computers/Monitors
Location
The company is located at 1111 Gold Ave Las Vegas, Nevada, United States. It is the 1st largest city of Nevada and is growing rapidly at the rate of 3% annually. Las Vegas is one of the largest planned urban communities stretching to more than 66 square miles with multiple modes of transportation. Las Vegas has a population of 526,750 and its population increases at the rate of 6.19%. Recently, American Community Survey (ACS) reported that only 1.46% of the population is Black or African American, 43.64% are Asians, 44.93% are White Americans and the rest are from Native Hawaiians or Pacific Islanders.
Risk Analysis
E-commerce is a rapidly growing industry ever since the COVID-19 pandemic. It has become an essential service and a viable alternative to most businesses. However, along with this growth, certain risks evolved as well. In addition, the beauty industry has its own challenges. Plom has developed a risk management program to identify the key risks and respective mitigation strategies.
| Risk | Description | Mitigation Plan |
| Economic Downturn | A slowdown in economic activity over a sustained period of time may decrease sales on the website. Customers may prioritize basic needs before their personal needs. | Based on the “Lipstick Effect” (a theory stating that during periods of recession or economic downturn, consumers will eschew purchases of big-ticket luxury items and seek material solace in smaller indulgences, such as premium lipstick), consumers still buy beauty products for self-care despite economic downturns. The company plans to ensure availability of high quality, yet affordable product inventory on the website to ensure uninterrupted sales. |
| Supply Chain Disruptions | Dropshipping requires lean and agile supply chain management. While this strategy is cost-effective, there is also a risk of delays in deliveries of products. | Since Plom will not hold inventory of the products they feature on the website, it will continue to monitor statistics of successful and unsuccessful deliveries to forecast the need to improve or change supply chain partners. As a countermeasure, it will build a database of delivery service companies and forge agreements with delivery companies in various areas to ensure backup delivery is in place. |
| COVID-19 | COVID-19 resurgence may weaken overall sales of the company. People may prioritize livelihood over beauty products. | In the next few years, the company will extend its business to respond positively to the crises. It will source out additional health essential products that not only protect the skin from the harmful effects of the virus but also have moisturizing and beauty preservation qualities. |
| Cheaper Alternatives From Abroad | Cheaper alternative beauty products will always be available in the market. These are from hawker companies. | Plom, having a niche market, will continue to ensure the high quality of their products to differentiate it from the cheaper versions. It will develop marketing campaigns to highlight the value and uniqueness of its products through investing in research and informing the market of its benefits. |
Management Team
Emma Olive
Founder and CEO
Ms. Emma Olive is the Founder and Chief Executive Officer (CEO) of Plom. Ms. Olive has over 15 years of professional experience across various business sectors, including manufacturing, financial planning, e-commerce, supply chain management, procurement, contractual negotiations, and global sourcing for various industries.
With a comprehensive retail background, Ms. Olive will lead Plom as its CEO, where she will lead in setting the overall organizational strategy, recruiting key personnel, making financial decisions such as investments, and coordinating with various stakeholders including business partners, retailers, brand partners, and suppliers. She is currently the Director for Brand Management and Operations at Gliss in Orange County, California, and has worked with several other companies including Bright Skincare, TriloG, and Dove + Pearl.
Ms. Olive is passionate about providing business and market opportunities to small and medium business owners in the melanated beauty and personal care industry. She also envisions a multicultural marketplace where customers have access to a wide range of choices which will allow them to find the perfect products for their skin tone. Her motivation for starting Plom was her previous experience of having limited haircare and makeup choices suitable to her needs.
According to Ms. Olive, there are many companies who have found the support of the consumer, but there are quite a few more who are struggling to find their place in the beauty industry, and her desire is to help them build brand awareness and accomplish their goals. Ms. Olive intends to scale up the business by achieving $1 million in revenues by the end of Year 3, as she continues to build a community of melanated customers who are empowered by having access to more suitable beauty and personal care products.
The overall vision for Ms. Olive is a 100% online e-commerce marketing place utilizing a dropshipping model to get customers the products they want. This creates a profitable venture which has minimal cost of goods sold and inventory to contend with, if any. Additionally, most of the operating profit can be reinvested to sales and marketing. In short, Plom is positioned to be both a leader in the melanated beauty market and a profitable business that has the potential to either continue growing, or explore acquisition in Years 4 or 5. As the melanated community continues to increase its purchasing power thanks to parity in the economic system, Ms. Olive is putting Plom at the forefront.
Key Personnel
To scale up Plom, Ms. Olive will prioritize the recruitment of the following key personnel:
Sales Coordinator: The sales coordinator will be responsible for managing brand requirements and communication, as well as analyzing sales data and providing insights to the team on how to drive sales and increase profitability. The Sales Coordinator will also work on achieving and exceeding sales targets of the company through B2B and B2C sales channels.
Marketing Coordinator: The marketing coordinator will implement marketing and advertising strategies by assembling and analyzing sales forecasts, preparing marketing and advertising strategies according to consumer behavior and trends, and planning and organizing promotional activities. The marketing coordinator will work closely with the Sales Coordinator in measuring sales generated from all marketing activities.
Digital Coordinator: The digital coordinator will support the marketing and sales coordinators by leading in digital marketing activities. He/she will be responsible for tracking marketing campaign progress, developing various digital marketing materials, sourcing images and artwork, collating content, updating online assets, and performing other digital marketing activities to boost Plom’s brand awareness and sales.
Ms. Olive, as Founder and Chief Executive Officer will be responsible for hiring for these three key positions. The goal is to identify talented, skilled and passionate professionals who share the same values of building communities through products made by local artisans.
Recruitment Plan
To recruit coordinators for marketing, sales, and digital, Ms. Olive will adopt the following recruitment strategies:
Hiring from professional networks: Ms. Olive will start expanding Plom by identifying top talent from her previous and current work. Having worked with several companies, she will consider previous colleagues with whom she has familiarity working with. With the business scaling up fast, Ms. Olive will rely on her networks in finding talent, whether active or passive candidates, who will fit in the operations and culture of the company.
LinkedIn: Recent data suggests that there are approximately 190 million LinkedIn users in the US. As the top social media platform for business professionals, Ms. Olive will post the three job vacancies on the website and screen the top applicants. This is a cost effective method of recruiting talent. LinkedIn can also be used to establish business relationships with suppliers, affiliates, and endorsers.
College recruiting: Once the core positions are filled up, Plom will discover up and coming local talent by opening the company to internships and placements. The company will post on campus online job boards, as well as attend career fairs for those interested in working in the beauty products industry, whether in marketing or logistics.
Financial Plan
Pro Forma Income Statement
Pro Forma Cash Flow Statement
Pro Forma Balance Sheet
