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Changing from retailer to wholesaler brings challenges

by Nauman Farooqi
The Globe and Mail

Anointment at the Sackville Farmer's Market

THE CHALLENGE

April MacKinnon looked at the 2011 financials for her personal care products business, Sackville, N.B.-based Anointment Natural Skin Care Inc., and realized that the bottom line did not look good.

Ms. MacKinnon had a number of years of experience running a successful and profitable natural personal care products business, as well as experience in online commerce. Both of these experiences were in the retail sphere and, as she looked into the financials, she realized the huge effect that scale has on the profitability of a wholesale operation as compared to a retail business.

Not willing to decrease costs by substituting more economical raw materials, Ms.MacKinnon realized that, if she wanted to succeed in the wholesale market, she had to find the economies of scale that would allow her to erase the red ink. Scaling up meant finding more outlets to carry her product line. The challenge was how to accomplish this.

THE BACKGROUND

Ms. MacKinnon was born and raised in Sackville, and graduated from Mount Allison University in 1998 with a certificate in engineering. She completed a civil engineering degree at Dalhousie University in Halifax in 2001 and, after graduation, worked for six years in the engineering field in Halifax.

She became interested in natural personal care products around the time her first child was born. Later, at the end of her maternity leave and to spend more time with her newborn daughter, she decided to quit work and set up an online retail business selling natural personal care products.

This venture soon led to the opening of a retail outlet called Nurtured in Halifax. Building on her strength of making personal connections with her customers, she was able to grow the retail business. To complement the product lines sold at Nurtured, Ms. MacKinnon acquired Anointment Natural Skin Care in 2009 and continued to supply a small number of wholesale clients.

Although both businesses were doing well, Ms. MacKinnon realized that she was overstretching herself and unable to find the work-life balance she desired. With a third baby on the way, she knew that finding that elusive balance would mean making some tough decisions.

Despite living in Halifax for many years, she still had a strong sense of belonging in Sackville and wanted to move back to raise her family if an opportunity presented itself. That came in the form of a job transfer to Moncton for her husband. In 2011, she sold the retail business and moved to Sackville with a plan to take Anointment from a retail store concept to a wholesale operation.

THE SOLUTION

To get sound advice, Ms. MacKinnon turned to her connections with other wholesale businesses in the region that advised her to scale up the business to allow her to take advantage of economies of scale.

To do that, she ramped up her marketing efforts by sending out brochures and samples to retailers around Canada, as well as boosting her online presence via social media outlets.

She analyzed her extensive product line and focused on volume leaders that could allow for the best scale-up opportunities in the short run. She knew that the new facilities in Sackville would allow her to easily scale up to the next level without any additional infrastructure costs except increased inventory and operating costs. Building on her personal communication strengths, she was able to make strong connections with new wholesale buyers and educate and advise them about her product line.

THE RESULT

As of this month, the business has surpassed last year’s sales and is headed in the right direction. Her marketing efforts and a strong online presence through social media have resulted in several stores approaching her to sell the Anointment line.

Despite the success, there are new challenges that need to be taken care of, including completely revamping product packaging materials to better accommodate long-distance shipping and boutique merchandising.

Ms. MacKinnon is planning to produce short videos on YouTube to train customers as well as attend specialized wholesale trade shows to boost her marketing efforts.

Special to The Globe and Mail

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studies of Mount Allison University.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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Follow Your Heart To Financial Success

Progress Magazine
Progress Magazine
Progress Magazine Volume 19, No. 2

The following is an article written about Anointment Natural Skin Care in the latest issue of Progress Magazine, a regional business magazine.

[small business]

Follow Your Heart To Financial Success

“The best piece of advice I’ve had from another entrepreneur was, ‘if you run your business from your heart, success will follow,’” says April MacKinnon, owner of Anointment Natural Skin Care. That advice is from Jeremy Long, owner of Padraig Cottage Ltd., whose slipper business started in North Vancouver and whose products are now sold in boutiques across Canada, the U.S. and Europe. “I believe authenticity is important, and so is standing behind your principles,” says MacKinnon, “no matter what your financial statements may say.”

It’s her deeply rooted principles about the importance of natural skin care and providing products that don’t comprise her customers’ health or the environment that drives MacKinnon – and it’s paying off. From her base in rural Sackville, NB, MacKinnon, AGE, has expanded her wholesale business across Canada, reaching as far as Edmonton, AB. “We’ve gone from selling in four stores in Nova Scotia to fulfilling orders for 30 stores nationally,” says MacKinnon.

A civil engineer by trade, MacKinnon left the profession in 2006 to pursue the natural health products market full time. She bought Anointment in the spring of 2009. She and her husband, Jeff, moved their growing family from Dartmouth, NS back to her home town of Sackville, NB in YEAR. They are now parents to Anna, 6, Cameron, 5, and Andrew, 1. MacKinnon is a stay-at-home mom who runs Anointment from their 150-year-old farm house.

To grow her business, MacKinnon focuses on the baby and children market. “I find boutiques and online websites that cater to moms like me – women who care about what we’re putting on our family’s skin.” MacKinnon gets weekly requests from stores wanting to carry Anointment products.

“I think the most important thing when supplying to retailers across the county is to commit to supporting them,” says MacKinnon. “You have to treat your retailers well – get your orders out on time, help with merchandizing, be accessible. Basically, empower them to sell your product as well as you would if you were in their stores. And never underestimate the power of professional branding. It gives retailers more confidence in your product.”

Her future plans include opening an Anointment retail store in Sackville, NB, and joining the Atlantic economusee network. “Soap making is physically demanding, but really rewarding. I want to contribute to the local economic development here and job creation – I want to employ women like me who have a strong business sense and young children.” – Heather MacLean

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{details}

Adapted from Soulemama‘s “…Friday ritual. A single photo – no words – capturing a moment from the week. A simple, special, extraordinary moment. A moment I want to pause, savor and remember.”

Rather than capture a “moment”, I feel inspired to capture the small details around me, to remind me to stop and smell the roses in this new iteration of our lives.

Herbal Clay Cleanser

This is a photo from the ACTS booth display. I love how the blue label of the Herbal Clay Cleanser contrasts the calendula flowers (in lovely apothecary jars loaned to me by Aunt Pam).

If you’ve noticed interesting {details} around you, please share or leave a link in the comments.

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Whoa, it’s been a while

I’ve been kicked in the pants by a few folks, most recently the lovely Sarah to start blogging again. I promise, I will.

I have been up to my eyeballs in alligators, so my old boss, Tom Austin, used to say. Since January I have been producing like mad in preparation for the Atlantic Craft Trade Show, which took place in Halifax the first weekend in February. This was my first trip back to Halifax and left me with a lot of emotional loose ends to tie up. All five (!) of us went and while my friend Tory was very gracious in hosting us all, suffice to say that next year, I’m going alone.

The exhaustion of working the booth and nursing all night long with a baby who hadn’t seen me all day left me drained, and all five of us came down with various incarnations of the flu, which put me behind another ten days or so.

I’m almost caught up.

I find my hands are always so full of children/babies/work/home that I don’t think to take photos of my day, and when I do, weeks pass before I have a minute to take them off the camera and upload them. I’m making an effort to change that.

Many things are happening in the workshop these days. I made some hefty goals for Anointment this year and I’m working as hard as I can on about five different projects while simultaneously keeping my eyes on the fries, as it were. I’ve got a lot of building to do.

For now, I’ll leave you with this, a link to the article I have written this month for Oh My! Handmade Goodness. I have been thinking a lot about the changing retail landscape recently and thought you might enjoy this little taste of my experience with consignment.

Be back soon!

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oh my! handmade goodness ultimate entrepreneur giveaway!

Holy cow! Oh my! Handmade Goodness is holding an amazing Ultimate Entrepreneur Giveaway. They’re offering business and design services to businesses “on the cusp”. We worked hard and pushed outside of our technological comfort zones to make this video entry. This is the first time I’ve ever worked on a video – it is a family effort – from my brother manning the camera and editing, to my six-year-old daughter drawing the pictures, and my husband selecting the music. Even the dog got involved!

I normally write an article for Oh My! Handmade Goodness on a monthly basis, and it’s a project I enjoy contributing to. Jessika Hepburn, the Editor and I have worked together in the past and I can tell you first hand she is full of ideas, creativity and the drive to make them happen.

Anointment is on the verge of gaining some good momentum, but our budget is very small. In a world where design services are expensive and sought after, we could really get the ball rolling with the help of these fantastic design and business professionals!

Watch our submission here.

Here’s crossing our fingers for luck!