How slim margins triggered a strategy rethink
Friday, August 31, 2012/
Expanding overseas is the goal of many Australian business owners, such as Sharon Thurin, founder of Victoria-based business Slim Secrets, which is gradually establishing a global presence.
Slim Secrets is a range of nutritional snacks designed to curb cravings in between meals and is stocked in Australian supermarkets and health outlets.
In addition to Australia, Slim Secrets is available in the United States, the United Kingdom, Canada, Ireland, Bahrain, Japan, Singapore, Malaysia, Fiji and several smaller Asian markets.
Thurin spent the bulk of her early career in her husband’s pharmacy business. As a health and wellness coach, she founded Slim Secrets out of a desire to address unhealthy snacking habits.
Her idea for a healthy snack range quickly evolved into a global business. But as Thurin explains, there are often unseen obstacles entrepreneurs encounter when they expand overseas.
“I launched Slim Secrets at the end of 2005… About two years into the business, we started shipping to Canada and also to the US,” Thurin says.
Thurin says she wasn’t prepared for the complications of doing business in the US and Canada.
“[I wasn’t prepared for] the layers involved in terms of marketing, and everybody takes a cut in the US and Canada. In the end, there were such little margins,” she says.
“For example, we were in a chain of health food stores and they do tastings in-store. With all the products they use for those tastings, they ask for payback.”
“They insist on advertising in certain magazines and, again, we had to pay for it… In the end, I was having to pay back almost as much as I received. It was a very good lesson.”
Rather than pull out of the US and Canada, Thurin simply stopped supplying to those markets, which, according to her, reaffirmed the demand for her products.
“The best thing was we saw there was good demand for our products… I still get emails from people saying, ‘Why aren’t you here? We would love to see your brand here’,” she says.
Having learnt an expensive lesson, Thurin is now approaching the US and Canadian markets from a different angle.
“We’re speaking with a businessman who’s looking at licensing the product in the US. We’re about 98% of the way there,” she says.
“This guy’s American and he saw the products in China, loved them and asked us if he could license the brand over there.”
“We’ll be looking at royalties for that. They oversee everything, so we don’t have to worry about legalities or anything else… It’s really very exciting. [That should happen] in about six months.”
Having changed tack in its most challenging markets, Slim Secrets has been able to focus on ramping up its efforts locally, launching a new range in partnership with Michael Klim.
“We co-branded using the Milk Active brand, which is powered by Slim Secrets. We’re working so well together and people are loving the product,” Thurin says.
Slim Secrets has also signed an exclusive deal with women’s fitness chain Fernwood Fitness.
As a result of these partnerships, Thurin is confident the company could double its revenue to reach around $3 million.
As simple as it sounds, she believes the secret behind the brand’s success is in its subtle points of difference.
“Our brand is more a lifestyle snack. It’s not your typical Weight Watchers brand – it can sit anywhere on the shelf. It sits in the supermarket in the diet section but it could sit in the sports section,” she says.
“Just try to differentiate yourself. Competing with such big companies, we had to find small things to differentiate ourselves.”
“I’ve been in this for nearly six years and I learn something new every single day.”