Vegamour Is A Multimillion-Dollar Hair-Restoration Brand No One’s Heard Of, But It’s Working To Change That
Vegamour has accumulated a hair-raising amount of sales in a short span of time without much notice.
The direct-to-consumer lash, brow and hair growth brand is on track to hit $10 million in revenues this year after generating $8 million in 2017, its inaugural year in business. Vegamour has reached hundreds of thousands of customers through a heavy push on social media, compelling subscription offer and embrace of Amazon distribution.
“We’re the fastest-growing hair growth company that nobody has heard of,” says Dan Hodgdon, co-founder and CEO of Vegamour, noting, “Having direct communication with our customers allows us to receive primary or first-hand feedback, which allows us to develop new products and/or modify existing lines. Retail distribution is great, but it has its limitations and restrictions as well. Plus, when distributing through traditional brick and mortar retailers, it’s the retailers who own the relationships with your customers.”
For its initial six months, Vegamour, known principally as Vegalash at the outset, concentrated aggressively on Facebook marketing and promptly amassed $6 million in sales. Not all the sales were domestic. At its four-month mark, the brand, formulated at its inception to adhere to European Union ingredient standards, expanded to countries such as U.K., Australia, Mexico, Canada, Germany, Spain, Sweden, Brazil and Japan. The expansion added 20% to its daily sales.
At just six-months-old, Vegamour took a step back to evaluate its course. Hodgdon details a thorough assessment led to a focus on nurturing long-term relationships with customers via subscriptions rather than pumping up one-off purchases. Vegamour’s trial kit is priced at $19.95 for a 1-ml. Vegalash Volumizing Serum, 2-ml. Volumizing Mascara, 2-ml. Multitasking Primer and 1-oz. Oil-Free Makeup Remover.
The brand promotes a no-questions-asked, money-back guarantee and reports a less than 1% return rate on that guarantee. Some 63% of Vegamour’s customers participate in its subscription service, and it’s subscriber base is forecast to at least double this year. The brand’s customers are largely 35- to 65-year-old married and highly-educated mothers with six-digit salaries from management jobs.
“When people are free to try a product without obligation or financial risk, it provides the framework for building a relationship built on mutual trust,” says Hodgdon. “Once they’re able to try the product and experience the results they hoped for, without eye-irritation or having their eyelids or irises discolored, you have a committed customer.”
“When people are free to try a product without obligation or financial risk, it provides the framework for building a relationship built on mutual trust. Once they’re able to try the product and experience the results they hoped for, without eye-irritation or having their eyelids or irises discolored, you have a committed customer.”
Vegamour’s debut items, Vegalash Volumizing Serum and Vegabrow Volumizing Serum, are its bestsellers, but Volumizing Hair Serum, a product released 18 months into the brand’s life, is poised to be the top stockkeeping unit by the end of 2018. “Lashes and brows, you can fake them if you have to. Hair is a lot harder to fake, and there is an extreme amount of vanity and shame on the table. So, needless to say, this product is very hard to keep in stock,” says Hodgdon. “We are dramatically outpacing our projections more than we ever could have imagined.”
Hodgdon, co-founder of Southern Botanica, a German company that produces fair-trade marula, manketti and kalahari melon seed oils in partnership with nearly 5,000 women in Namibia and supplies many ingredients to Vegamour, and former CEO of Marula by John Paul Selects, couldn’t have imagined Vegamour’s trajectory upon approaching Christina Zeigler, a former vice president of finance at Harry’s, interim controller at Bonobos and controller at Gilt Groupe, in 2016 to create a clean beauty company. With $300,000, the pair perfected Vegamour’s original packaging and formula, put up a website and kicked off on Facebook. Now, Hodgdon and Zeigler are in the midst of securing a seed round of funding to help further Vegamour’s climb.
Vegamour is no longer as dependent on Facebook as it was early on. Today, Amazon accounts for 10% of its sales. “A lot of brands are afraid of Amazon. There can be a lot of competition on Amazon from resellers of your own brand and a lot of product diversion that can sometimes occur when you sell wholesale or to distributors,” says Hodgdon. “However, as 45% of all retail transactions in the U.S. take place on the Amazon platform, we decided that we had to embrace it, and I’m glad we did.”
The brand continues to diversify its sources of sales. Brick-and-mortar retail isn’t off the table, and Vegamour is open to choosing a strategic brick-and-mortar partner. On the product front, it plans to build upon its young heritage in hair restoration over the next several years before possibly branching into other categories.
“When we first launched, we could spend $1 today and get back $3 on ad spend the same day. That world doesn’t exist today, but we definitely took advantage of it when we launched so that we, a small, self-financed little startup without major beauty connections, name recognition or celebrity endorsements, could do the millions of dollars of market research that we couldn’t afford to do before we launched,” says Hodgdon “We did it on the fly. The result is that we know who we are as a brand [and] we understand who our customers are.”