09.18.23
Increasing pricing from middle market providers has prompted the Naples Soap Company to expand its wholesale product line beyond to include complementary, high-quality ancillary bath and home items.
In a strategic move to reverse the trend of the decrease of profit margins and increase of lead times, Naples Soap Company began using its buying power with 14 stores and a robust e-commerce division. This sidesteps the middle market broker and buy direct from the manufacturer.
The company – founded in 2009 and best known for its doctor-recommend sensitive skin care line, natural soaps, body butters, sea salt scrubs and luxury bath bombs and sells – has added over 100 new skus that complement its legacy product lines including soap dishes, body scrubbers, facial scrubbers, pedicure products and more.
“These are products that our customers have been buying elsewhere, but now we’ve made it more convenient for customers to find them in our stores all under one roof,” said Deanna Wallin, founder and CEO of Naples Soap Company. “We’ve seen a 4% increase in our profit margin since the start of this direct-buy effort. We’ve moved the needle during our slowest time of year and are gearing up with even more product offerings for the busy holiday shopping season.”
A ’Win-Win’ for Wholesale Clients
In addition to improving Naples Soap Company’s retail store profit margins by adding these new product lines, the company is extending these same product offerings to its wholesale clients.
“We work with boutiques, retail shops and spas all over the country. By passing along similar savings to our wholesale partners, we are helping them move from traditional keystone pricing to 70% plus margins. For a small mom-and-pop retail shop, that’s huge,” said Wallin. “We vet the products, ensure the quality control, deliver in a timely fashion, and help them increase their margins. It’s a win-win.”
Naples Soap Company timed the launch of this new strategy to align with the peak buying cycle of its wholesale client base. Retailers are finalizing their holiday merchandise buys and bringing in fresh and new merchandise.