As my small (micro!) business, Apothaka® celebrates its 8th anniversary this month, I wanted to share the highs and lows of running a small business and give some insight into what small businesses offer compared to bigger corporations (i.e. the big boys!). A staggering 60% of small businesses close within the first 3 years, so I think it's important to think about what they offer to you, as consumers. You may have heard the phrase, "when you buy from a small business, they do a happy dance", but I wanted to explain why shopping small is so much more than this and can really benefit YOU as a consumer!
Doing things differently / trends are overrated
Looking back, I'm proud of how far I've come despite being an industry outsider. As with most things in life, who you know can really help give you a leg up in whatever you do, so I feel a strong sense of achievement having got this far without really knowing anyone in the industry who could give me this! Being an introvert (which is why you don't see me much on social media!), I struggle with networking so my business has largely grown through word of mouth - and Instagram (in its old days) was a key part of that as it allowed me to build a wonderful community of skincare enthusiasts who very generously spread the word!
I've never been one to bow to trends and running Apothaka® has been no exception to this. Rather than being driven by market trends and "viral" ingredients, I wanted to focus on what customers really need and being able to stay true to my values (supporting skin barrier health with effective and enjoyable products). Operating my own business gives me complete autonomy to do that on my own terms without having to follow trends. I have been promoting the idea of supporting skin barrier health for several years (when most of the industry was pushing the exact opposite through over-exfoliation and unnecessarily strong actives), so it's bemusing to now see so many brands throwing the word "barrier" onto their product labels like it's a trend! Are they honestly thinking of your skin health when they're also actively promoting high-strength actives that you don't need?!
The challenge of being a sole business owner is that it's incredibly lonely (even for an introvert!) and you have to wear so many hats. Thankfully, because my career path has meandered quite a lot (accountancy, healthcare research, marketing research / project management / client management / community management), I have built up quite a lot of transferrable skills, but the one I struggle with the most is how draining it is to show up on social media - particularly as an introvert who hates being on camera! Ironically I used to generate hundreds of thousands of pounds for companies I used to work for, but I'm terrible at blowing my own trumpet when it comes to selling Apothaka® despite wholeheartedly believing in my brand - imposter syndrome is real!
A self-funded brand that puts you, the customer first (truly!)
Having previously worked at smaller companies that were founder-owned and then seeing first hand how they changed once they were bought by investors, it was (and still is) vital to me that I had complete control over how Apothaka® runs. I started the business with a small amount of savings while I was still working a "proper" job, so no loans or external investment and it's really important for me to keep it that way because as soon as external investment is involved, business priorities will always change i.e. without a doubt, businesses have to become more profit-motivated once there are shareholders (just look at the state of the utilities sector!). Of course, I'm trying to generate a profit in order to pay myself a fair salary to live off, but when profit becomes the key motivating factor above anything else, it's inevitable that customers suffer. Just look around at all the bigger corporations announcing price hikes, whilst simultaneously generating record profits, all while the customer experience is at best, an after-thought. I would much rather invest more on product development, creating unique formulations and a great customer experience, than be under pressure to prioritise the bottom-line!
There's other ways I'm trying to help:
- no "shrinkflation": have you noticed that some items (e.g. chocolate bars!) have been reduced in size whilst the price goes up. It's sneaky isn't it! In contrast, I increased the product size of my velveteen cloud cleanser, gentle cleansing gel and SOS recovery hand cream - to 125ml (from 100ml for the cleansers, and 90ml for the hand cream) whilst maintaining the same price
- looking after my existing customers as much as the new ones: one of my pet peeves with bigger companies (especially service industries like banks, insurance, telecoms and TV companies) is that they lure new customers in with initial discounts but then offer nothing to reward existing customers - instead you get bigger price hikes! At Apothaka® I offer a loyalty programme with even more generous discounts for repeat customers!
- giving back: I know this time of year comes with a lot of heavy promotion / sales. I've always run an anniversary sale during this month and resisted "Black Friday"-specific sales as I feel it promotes over-consumption. Instead I have always donated a proportion of sales to a different grassroots charity each year. It might mean a slightly smaller discount to you, but I'd rather give that to a great cause in need whilst also offering you some savings!
- no price rises before sales / surge pricing: this has become more prevalent amongst bigger retailers who start to adjust prices ahead of sales to give the illusion of better discounts, or regularly adjust (increase!) prices based on demand. I try to avoid price rises as much as I can but I do a pricing review once a year at most, which is never just before a sale - and I always give customers advanced warning of this so they have time to stock up ahead of price rises
Being fully-self funded is great for autonomy, but the reality of being a boot-strapped brand is that it's harder to weather lower sales and ever-increasing costs - especially over the last couple of years due to Brexit, the pandemic, climate change and wars - all of which have put pressure on raw materials prices and packaging. You just have to look at the price of olive oil in supermarkets to see how much prices have increased. In fact most plant oils have risen drastically in price which is putting huge pressure on margins especially for small businesses who already deal with much higher cost prices for their products in the first place. I want to also mention mark ups as I know not all consumers will be aware of how these work. When a brand sells their products through large retail stores (e.g. Boots, Selfridges etc), these stores take a large amount of the brand's retail price. Sometimes this is as much as 60% of the retail price! Brands that sell through these larger stores will ensure they have priced to account for this, so that they're also making some profit themselves. This results in some pretty hefty retail mark ups. Very early on I made the decision to not sell through these large stores because I didn't want to inflate my product prices any more than I had to (and keep in mind that I'm starting with a much higher cost price of a product as a small brand so I have less "wiggle room" with pricing!). When brands have those hefty retail mark ups built in, they can offer much bigger discounts if customers buy direct from them. Smaller brands like mine can't offer this amount of discount as we don't typically have it built into our pricing. It's pretty easy to spot brands with hefty mark ups - if they're offering 30%+ discounts, it's because they've built in a big mark up to cover this. So while you may feel like you're grabbing a "bargain", it's a bit of an illusion!
It's also worth mentioning the marketing spend element in the beauty industry because it's one of the biggest areas of spend for beauty brands. In fact, in many cases, bigger brands probably spend more on marketing than on product development! In contrast, I would rather re-invest profits into product development and quality ingredients than big PR pushes and spendy marketing campaigns and influencer events. Whilst I can't ever rule out paid social media ads (I need to get my name out there somehow!), so far I've resisted spending on paid ads.
Motivation to give you all the good things!
I genuinely love creating products that bring joy to people's skincare routines and I can't tell you how happy it makes me to see people sharing their experience on social media, through product reviews on my website and from the wonderful messages I get from customers in my inbox. It's this that keeps me going, even when things feel hard (and they've felt particularly hard this year!)
The challenge with working in the beauty industry is that my brand values don't always align with what "the market" wants which makes it hard for Apothaka® to grow. People are increasingly wanting quick fixes, miracle transformations, to reverse ageing and unrealistic goals of perfect, flawless skin - and a lot of this is driven by brands marketing these ideas. But it's not what I'm selling!
Responsible marketing means more honesty & transparency for you (substance AND style)
The beauty industry is obsessed with the idea of "perfect" or "flawless" skin but I think it's more important to focus on healthy, real, unfiltered skin at any age alongside realistic product claims (which aren't fear-driven). This has led to a lot of loyal customers who love and trust my brand. And I would add, my customers are more discerning - they're not interested in trends or constant launches either, they just want effective, enjoyable products that work and they look for consistency in their routines rather than buying every new launch from different brands!
The challenge is that marketing with integrity (i.e. with no BS or over-exaggerated claims) is really tough against an industry full of marketing noise where fear, gimmicks, controversy and misinformation win. People ultimately hear what they want to hear. And a lot don't want to hear that there is no magic potion that gives you perfect skin! I'm quite literally a small voice, fighting to be heard amongst all the over-promises and false information!
Skincare education improves the customer experience
For me, it's not just about selling products. I'm genuinely passionate about skincare education, advising customers on their routines and tackling misinformation. This is the main reason I undertook additional qualifications (Level 4 CIBTAC) in order to be able to properly advise on skincare. Hopefully those of you who have interacted directly with me (and yes, it's always me answering your questions!) will have had first-hand experience of this. I love sharing information because I want you to have a great experience with my products and I want them to be right for you! On some occasions when customers have asked for product recommendations, I have suggested alternative brands if I don't feel my products are suitable for you. This personalised experience and honesty is important for building trust and I can confidently say it's not something bigger brands would offer you!
A lot of my skincare education is shared through social media, where people are increasingly looking to in order to learn. The issue with social media is that there is often a lack of nuance which makes education quite difficult. It's really hard to distill accurate, detailed information into short, trending videos or even static posts, especially when your social media following is relatively small. Unfortunately this will only get worse with social media apps continuing to prioritise short-form, "viral" content on their platforms - it's no surprise that the content that usually goes viral is often full of misinformation as these posts are designed to entertain and get likes / clicks rather than to educate. This is why I try to keep my blog up to date with skincare information for those who want deeper dives into different skincare topics - plus I really enjoy researching and writing them (when I have time!).
Size - small but mighty!
I often think of the David vs Goliath analogy here as I think it's so reflective of the battle between small vs big business (except in this case, small businesses rarely win because bigger brands are so dominant in this sector!). And though there are numerous brands, the cosmetics sector is dominated by major multi-national players like L'Oreal, Unilever, Estee Lauder and Unilever to name a few. Each of these own multiple brands across different price points (drugstore, "masstige", "dermatological" and professional so they have all their bases covered). What's interesting is they're increasing their domination by also buying smaller, "natural" brands to bolster their green credentials but many consumers are unaware that they're owned by these big corporations. Brands like Aesop and REN are now owned by big players. In fact, the top 10 most searched skincare brands in the UK are all owned by bigger parent companies, so you can see that small, independent brands really have their work cut out to get noticed!
As a small business owner, I'm much closer to the customer than bigger companies who are much more removed from direct customer interaction. I can think like a consumer (because I am one too, and I have expectations of good customer service as a consumer myself!) - and I feed this into my products and the customer experience. This is something that I feel big corporations struggle with as they just can't be close to the customer due to their size. Putting the customer first is easier for me, as I do everything myself! I'm the one making (some of) the products, packing orders, answering emails, dealing with suppliers etc.
Whilst this is amazing in terms of ensuring all of these elements stay aligned with my brand values, it's a lot to manage for one person! Thankfully I do have freelance support for all the elements I'm not as good at (we all need to recognise our weaknesses after all!). But it's still a lot of responsibility to carry as a sole owner. The other downside of being a small business (as I've sadly experienced first-hand) is that it's easier to get taken advantage of by bigger brands who think nothing of copying ideas, product names etc, and worse still, they usually get away with it. The beauty market is flooded with "dupes" and counterfeit products. Whilst dupes are often positioned as an "affordable" alternative to the originals, I strongly believe there is no excuse for a brand to copy another's product - whether that's in name, packaging design or formulation. The beauty market is saturated with products and there is something similar for everyone at all price points without having to buy products that have ripped off other brands so blatantly!
Hopefully this gives you a bit of insight into what you get when you shop with a small business like mine, which will appreciate every order vs. a bigger corporation where you're just a number (and they're unlikely to miss your business if you don't buy from them!). Plus we pay all our taxes here which further support the economy - can't say the same for the big boys! Thank you to all of you who continue to support Apothaka®, this year has been really tough so I appreciate those of you who are still cheering me on!
You can shop my 8th anniversary sale here until 30th November, while stocks last! xo
