Deciding to launch a business in the industry you know best is a no-brainer, but what if your idea is more aligned to a sector you know little about? Shelley Barrett found herself in this situation.
Barrett is the founder of Sydney-based beauty brand ModelCo, which has attracted international attention for its range of quick-fix, multipurpose products.
In addition to Australia, ModelCo has a presence in the United States, the United Kingdom, New Zealand, South Africa and throughout Asia.
ModelCo’s first product was a heated eyelash curler, which grabbed the attention of celebrities and beauty experts. Soon after came Tan in a Can, which, according to Barrett, “changed the way women tan forever”.
A former model agent, Barrett set up the business in 2002. While she felt completely at home in the world of beauty, she found herself in foreign territory when it came to the retail sector.
“When I started ModelCo, I just thought I was in the world of beauty,” Barrett says.
“I might be in the world of beauty but… I was really going into retail and wholesale, so it’s about understanding the industry you’re going into and all the facets of it.”
“I had no idea of the importance of understanding the world of retail – the way it worked and all the retail speak. I needed to be well versed in wholesale, retail, consumers, marketing, finance.”
“The products are must-haves for women but it’s about bringing them from concept to shelf – that’s the challenge… I underestimated the business acumen [required to launch products].”
With ModelCo’s first product, Barrett thought it would be as easy as ringing up a manufacturer and putting in a request.
“The actual process is a hell of a lot longer… We had to buy the machine tools to make the product, and there are regulatory requirements when you sell beauty products,” she says.
“Then it was the pricing. Selling it on, what were the margins? Then it was about going through the retail hoops.”
“I learnt from the ground up how to launch a product. The benefit was I only had one product to launch. The learning is: do something, do it small and do it well.”
Ten years on, having launched in multiple overseas markets, ModelCo employs 20 staff and aims to increase its turnover by 20% every year.
While Barrett is the first to admit she underestimated the knowledge required to launch a product, she believes her entry into the market was perfectly timed.
“When we launched 10 years ago, there were not any other niche brands trying to take on the big guys,” she says.
“With Tan in a Can, we changed the way women tan forever. Now you walk into any Priceline and there are 10 shelves of tanning.”
“The way women shop [has changed]. Women are a lot savvier now. There are so many brands out there, which means women are less brand-loyal.”
“Lots of brands have quality products. We accept the fact our girl shops across different brands, but we produce quick-fix solutions for time-poor women.”
“We are experts in tanning and we’re trying to reinforce that. We don’t try and be experts in what we’re not.”
Barrett says 2013 will see ModelCo launch a new online flagship store in addition to an app.
“We’re really focusing on the digital market and online shopping,” she says.