Jasmina Aganovic wants to give the aging idea of the Avon lady a makeover.
Specifically, the 26-year old founder of Bona Clara is gunning to bring the door-to-door sales model into the digital age with a sweep of scientifically sophisticated anti-aging cream and a disruptive take on marketing and social media.
It's a challenging goal, to be sure. Nearly 16 million direct sales people rang up over $30 billion in retail sales last year, according to the Direct Selling Association, and beauty products make up a quarter to a third of that business, depending on how you classify skincare products. And yet, the idea of direct sales of beauty products is firmly associated with women of a previous generation.
So how exactly does Aganovic, armed with an MIT degree in biochemistry, plan to take on the likes of entrenched brand goliaths like Mary Kay, Nu Skin, and others with a nascent startup?
It starts with laying aside assumptions.
While still a student at MIT, Aganovic was working in a lab doing trials of an antibiotic ear drops. "That’s where my interest in beauty began," she tells Fast Company. Throughout 300-some tests, Aganovic says, "I was just watching how the skin was responding to the formulation, even though it was for the ear."
The testing prompted her to consider a career in the beauty industry after graduation. After stints at Fresh and Living Proof, Aganovic decided to blaze her own trail. "I was really interested in the entire process," she explains. "Taking something from concept to when the customer holds the finished product in their hand." She also was intrigued by building a brand from scratch.
Tapping back into her biochemical engineer's training, Aganovic made good on a commitment to create products without any sodium lauryl sulfate (a common chemical in many cosmetics that's been linked to a host of health concerns), petroleum based ingredients, parabens, or other potentially toxic chemicals.
Aptly named Stages of Beauty, the collection of skincare products is specially formulated to work with skin at different ages. Waxing rhapsodic about the game changers that are Bona Clara’s makeup remover (not greasy and doesn’t pull out eyelashes!) and SPF cream (think: delicate veil instead of oil slick), Aganovic admits that she does miss the lab, but is relieved that she doesn’t have to do hundreds of trials herself any longer. "It is for the patient person," she notes.
Aganovic says that while she's working in partnership with several labs to create the products, she maintains complete control over the active ingredients. That's meant she's had to walk away from partners who told her certain formulations couldn't be made. Undaunted, she simply found someone to work with her to realize her vision. Like Living Proof, another beauty brand based on MIT science, it doesn't come cheap: individual items range from $30 to $90.
Launching the products online first, Aganovic admits she set her sights on traditional retail channels to scale her business. "Retail and QVC were, in my mind, the paramount of success," she says.
In the meantime, Aganovic’s products were steadily gaining a loyal following, quickly reaching 200,000 customers in its first year. Customers were talking to their friends about how skin changes during different stages of their lives and how these products helped with the process. "After these conversations, other women would come to our retail site and buy our product," says Aganovic, "They were putting themselves on the line for us."
She started offering these referring customers a commission, "more as a show of gratitude," Aganovic maintains. That is, until one customer proposed that she get into direct sales. "'What’s that?' I asked her, I didn’t even know," Aganovic said. When she heard it was the Avon model, Aganovic admits she balked. "Then I felt bad for pre-judging."
After doing some research, Aganovic says she began to understand that the direct selling industry existed to serve a very important purpose. "Men are content to kick butt in one area of their lives, but we women want to have it all," she observes. Direct sales historically offered an opportunity for younger women or new moms a way to contribute to the household on a flexible schedule.
"What this solution failed to do is update with the times," Aganovic contends.
The average age of an Avon sales rep is 45, Aganovic explains. "That’s not the actual age of the group dealing with the big challenges this industry was supposed to solve."
While she was deciding how to proceed, Aganovic started talks with Sephora and QVC for distribution. "I felt cold about that process," she confesses, "These are the people who are going to be taking 53% of margin. I could give that to a woman who wants to redo her kitchen or take that vacation with her family." And so Bona Clara—the direct selling entity—became official early in 2013.
Unlike Avon, which has its reps sell around two-week catalog promotional cycles, sometimes requiring the wheedling of friends and relatives to buy more of what's being pushed during that sales period, Aganovic says Bona Clara reps use a hybrid approach to sales.
They can toggle between hosting parties and offering one-to-one demonstrations. Each rep has her own website for those customers who prefer to shop online. Parties have their own dedicated sites as well. Reps get a quantity of sample product for free and Bona Clara handles all the shipping direct to the customer.
Why buy direct from a rep when you can scour Ulta or Sephora online or in the stores? Aganovic believes that direct selling means the rep is very well versed in the product and can make personal recommendations that go beyond algorithmically generated, "you may also like this" on e-commerce sites. For example, 10,000 Blinks could be just another eye cream...until a radiant-faced salesperson extols the virtues of jambu, an active ingredient that's supposed to rearrange collagen to make it better at supporting skin. "It’s the best possible customer service," she adds.
For their work, each rep receives between 30% and 40% commission and Aganovic says a few are earning "a full-time income" selling Bona Clara. She believes the model is working because "we don’t push in either [sales] direction, we teach them the options that are available."
Aganovic says there are about 150 brand representatives who are actively selling on a monthly basis. Encouraged by the early growth, she is forging ahead using social media to recruit new reps and develop new products. Bona Clara has used targeted ads on Facebook to great effect and low cost, she says. Likewise, the company uses Twitter to get the word out among women who follow their feed and share the call for reps with their friends.
Aganovic anticipates expanding into hair care and makeup. The beauty industry is becoming more competitive, she admits, but it’s also in growth mode. Forecast to grow at an average annual rate of 4.2% in the 10 years to 2018, that’s faster than the anticipated growth in U.S. GDP. Aganovic’s already knocking on doors.