The way people shop has changed significantly over the years and our sales and distribution plan reflects this, offering consumers multiple channel options to connect with and buy KELA products. Since launching in May 2017, KELA has focused on establishing three distinct sales channels across online, retail and distributors in Australia, with KELA branded kiosks set to launch in the Australian market later in 2019 after a successful pilot.
Our website, www.kelacharms.com enables customers to browse and shop the full range of KELA charms, chains, crowns and pendants wherever and whenever. To date, sales through our website have been 85% Australian-based and transacted from Australia. Recent plans will see a United Kingdom specific landing page developed for UK online sales. Our UK-based customers will be directed to this page with the sales attributed to our UK distributor and transacted by them. The distributor will fulfil the orders from the stock they have purchased from KELA and we will charge a 20% licensing fee on the value of products sold. This is a model that we’ll be looking to roll out across our international distributor connections.
Online sales to date have accounted for approximately 19% of overall sales, with a profit margin of 85%. This channel offers the highest margin and is an area of focus.
The current retail business in Australia is predominantly servicing the salon industry with some multi-brand fashion and jewellery stores. To date we have 155 retail representatives across Australia, including 91 fashion, specialty gift and jewellery stores like City Beach Australia who are a fashion store with 66 stores nationally with sophisticated e-commerce reaching in excess of 950,000 followers through social media and EDM campaigns to over 500,000 members.
54 hair salons and beauty retailers stock and sell KELA products, including Brodie-Lee Stubbins from Rockstar Salon in Queensland who is the 2018 Queensland Hairdresser of the Year, and Caterina Di Biase from Heading Out Hair and Beauty who has been the AHFA Australian Hairdresser of the Year four times. We are also working with selected salons who have signed up as partner or destination salons where we can send celebrities and influencers to be styled with KELA products, partner with for events and activations and create social media content. In December 2017 Renya Xydis and VALONZ signed on as the first partner salon. Renya is an AHFA Hairstylist of the Year winner, Australian Hall of Fame inductee and international celebrity stylist.
In addition, we have 10 retailers who sell through e-commerce platforms, like Ice Jewellery, an online jewellery boutique specialising in international and Australian high fashion labels and Salon Vogue in Victoria, an influential social media salon delivering online and in-salon education.
Retail sales account for approximately 23% of overall sales with a profit margin of 72%.
At the end of 2018 we developed a turn-key retail solution for a merchandising display unit and marketing support collator which we have been selling to international distributor networks. We currently have distributors in the United Kingdom, Italy, Sweden, Dubai, United States of America and Russia. And we’re in negotiations with distributors in Germany, Spain, Denmark, France and Qatar with interested parties in other countries.
Our distributor sales account for approximately 58% of sales with a profit margin of 65%.
KELA branded kiosks
We have successfully trialled the kiosk model and will be rolling these out across Australia towards the end of 2019. The kiosk gives us the ability to control the brand message and educate, as well as establish brand presence. We believe there is potential for us to develop this model for the global market.
“For the past two years we have successfully tested the local markets for retail, online and distributor sales and we’re now ready to expand globally with a proven turn key model providing impressive profit margins. We are seeking investor funding of $3 million to go towards growing our global sales channels,” says Aldo Miccio, CEO. “We are ready and capable to deliver.”
Investment will enable us to expand KELA’s online store to the global market, bring on board distributors in new countries and markets, grow retail sales with trade shows and direct relationships with salons and retail chains, and roll out our KELA branded retail kiosks globally. “Our financial forecasts show that with this investment year-on-year we will see a significant increase in sales, growing from AUD $3.55 million in year one to AUD $40 million in year four,” says Aldo.