Makeup Incorporated (OTCBB: MAKU)
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Symbol: OTCBB: MAKU
Address:
Makeup Incorporated
3388 Via Lido
Newport Beach, CA 92663
(866) 347-5056
www.makeup.com
Top Investment Highlights
- Makeup.com has a simple, generic domain name that ensures online attention.
- Analysts at Goldman Sachs estimate that the U.S. beauty industry, consisting of skin care ($24 billion), makeup ($18 billion), hair care ($38 billion), and perfumes ($15 billion) is growing at an annual rate of 7 percent, more than twice the rate of the developed world's GDP.
- The cosmetics industry has a future growth forecast of 3.7% annually, with global sales expected to reach $300 billion by the year 2010.
- Makeup.com is well-positioned to take advantage of an emerging baby boom generation, offering a wide range of exclusive products for the more mature, affluent consumer.
- The company has targeted rapidly expanding retail markets such as organic lines, men's products and the twelve to twenty year old new consumers.
Company Overview
Makeup Incorporated, a public symbol of Makeup Incorporated (MAKU), has been a leader in the e-commerce of beauty products since its inception. The company markets and sells cosmetics, perfumes, and skin care via Makeup.com, a retail website offering a broad range of brands and products. Makeup.com will generate revenue by using its intuitive name to develop a worldwide brand, and 20% of the company's gross revenue will be used towards reaching significant consumer markets. The company plans to absorb the constant evolutions of the cosmetics industry by adapting to trends and using market research, competitive analysis, and customer input to further develop its products and services.
Technology
The company uses significant
resources and state-of-the-art systems to create reliable commerce architectures. With an advanced data center fostering the most ideal server environment, Makeup.com is well-positioned to provide consumers with a reliable website. The center features a state of the art environment with consistent humidity and temperature control, an airflow system, significant network connectivity, and a knowledgeable technical staff. The company has outsourced all of its technical requirements, including programming, internet marketing and technical support. Outsourcing allows the business to operate optimally and manage its costs as well. GeoTrust, a leading online transaction security company, processes every order placed on Makeup.com and ensures that each transaction is handled efficiently and securely.
Market Opportunity
The cosmetics industry is booming, with global sales reaching $253 billion in 2005, according to Euromonitor International. By all indications, the industry will continue to expand. The future growth forecast currently stands at 3.7% annually, and global sales are expected to exceed $300 billion by 2010. Beauty products are being embraced on a global scale, as their use becomes increasingly accepted and encouraged among a wide range of cultures. Western Europe represents the most significant market, accounting for 30 percent of global sales, and Asia-Pacific and North America rank a close second and third. In developing China, the beauty industry has become a major consumption zone as the country seeks a higher standard of living. Makeup Incorporated has the potential for tapping into these international markets, as much of the world looks to Western Europe and U.S. based companies and brands for quality, trendsetting beauty products.
Nearly all U.S. domestic beauty segments reported growth in 2005, with the top three (face, eye and lip) growing five, ten, and one percent, respectively. It was the year of the "mega-brands," established names in the beauty industry with a highly marketable brand and a loyal following. Last year, Clinique alone grabbed 21% of the total U.S. market share for cosmetics. Makeup.com carries a significant offering of mega-brands, including Clinique, MAC, Chanel, and Calvin Klein. Another consumer market on the rise is that of natural products, and Makeup.com offers many lines of organic skin care to satisfy the demand in this growing segment. In the U.S., the organic cosmetics market has experienced massive growth for four consecutive years, reaching $5 billion in 2004 (an increase of over 50 percent from 2000). Euromonitor predicts a continued rise in demand for non-synthetic, botanically based cosmetics as wellness and environmental awareness has gained popularity in mainstream society. The men's sector has also witnessed substantial growth, with internet retail sites like Makeup.com offering larger selections of cologne and grooming products. The retail sale of men's products has grown steadily at a rate much higher than the overall sector over the past 6 years. Euromonitor projects that the men's segment will continue to grow at an annual rate of 4.8% over the next four years.
Online Retail
Makeup Incorporated has merged two modern giants, the beauty industry and online retail, to target substantial markets. The internet is becoming a shopping destination for millions of consumers; there has been a fundamental shift towards consumers purchasing makeup, skin care, fragrances, and other beauty products online. With the development of increased internet security spurred by websites such as eBay, consumers are becoming more comfortable making purchases online. As of 2005, online shopping grossed approximately $65 billion, showing a growth of 26% from the previous year. The use of search engines to find products is showing remarkable growth, jumping 45% between 2004 and 2005. The availability and affordability of broadband internet access has fueled these sharp increases. As the internet continues to expand and broadband becomes more readily available, the trend of online beauty shopping is only expected to increase.
Advantages of Makeup.com
Makeup.com has taken an already strong retail concept and built upon it to generate loyalty and profitability. Its services include a newsletter, expanded product and brand information, and a membership program offering online order tracking, order history, and stored payment and shipping information. The website also offers loyalty discounts, innovative programs in which consumers can participate to receive discounted prices and exclusive offers. According to a recent study by Forrester Research, 90% of cosmetics buyers are interested in joining a loyalty program, which have been determined to be more appealing than pricing. Research shows that 50% of buyers are more likely to switch purchase sites or brands for an equivalent site or brand offering a loyalty program. Free delivery, discounts for second purchases, and personalized promotion are among the policies investigated by buyers on internet retail sites. The company also utilizes directory marketing to provide consumers with an index of services in the beauty industry. Makeup Incorporated has begun to apply the most advanced search engine technology, so that in 2007 the makeup.com online user will be able to conduct both a local and international directory search of hair salons, spas, and local retail outlets featuring makeup products and services. This multi-faceted offering of quality products at a discounted price, high visibility to Internet browsers, and a broad range of increasingly popular products from the organic and men's sector gives Makeup.com a position of prominence in the world of internet retail.
Makeup.com Revenue Streams
- Direct Sales. With domain prominence in a billion dollar global make-up retail industry, the company will be using direct sales as the core of its revenue growth. But additional revenues from advertising will be significant.
- Placement Advertising. This is determined by a) number of viewers, b) time spent on site per viewer, and c) number of pages viewed per visit. One million page views per month generate ad revenues of $20,000 to $60,000. The company expects to receive 10 to 15 million page impressions by the end of 2007, which would average annual revenue for placement advertising of over $6,000,000.00.
- Directory Advertising. Makeup.com will offer a directory in which advertisers can, for a fee, be placed at the top of web pages, design custom ads with logos, and even include streaming video. With over twenty-five categories and more than 8,000 postal zip codes, the revenue potential is significant. With even one advertiser ($10 fee per month) per category in only half the zip codes, the annual revenue would be $12 million dollars for directory advertising alone.
- Procurement and Drop Shipping. As the company grows and buying power increases, it will have the ability to serve as a drop shipper and/or procurement warehouse for smaller online companies. The volume discounts afforded large retailers will allow Makeup.com to absorb 10 to 15 percent of another company's order flow.
- Private Label Makeup Web Sites. Makeup.com will use its ability to attract a high volume of internet visitors to package complete online retail platforms for brands that lack marketing capacity, or for those not using cosmetics as a primary source of business. These private label platforms will allow the companies to identify their products to thousands of other retailers and consumers via Makeup.com.
Management
Robert E. Rook, CEO and President
Robert Rook has been a financial consultant in west Texas and southern California since 1998. Prior to that, he was Executive Vice President and Senior Lender of Norwest Bank in El Paso, Texas. Mr. Rook has also owned and operated several companies during his career. He has a Bachelor's degree in Finance from West Texas A&M University.
Munjit S. Johal, CFO and Treasurer
Munjit has over 24 years of financial and business management, and was previously the CEO for Secured Diversified Investment in Newport Beach, California. Mr. Johal holds a bachelor's degree from UCLA and an M.B.A. in Business Administration from UCSF.
Sara Au Yeong, Business Development and Marketing / Wholesale Buyer
Before spending 13 years in the fashion and cosmetics industries, Sara received a scholarship in fashion design with Helen LeFeaux and studied makeup artistry at John Casablancas. She holds a business diploma from Capilano College and a B.B.A. in Entrepreneurial Leadership from Kwantlen University.
This corporate profile is based upon information provided by management of Makeup Incorporated. The information is not intended to be and shall not constitute, an offer to sell or solicitation of any offer to buy any security. It is intended for information only and to increase awareness of Makeup Incorporated's services. Safe Harbor Statement: The statements in this document relating to future product availability, collaboration and partnership and positive direction are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some or all of the aspects anticipated by these forward-looking statements may not, in fact, occur. Factors that could cause or contribute to such differences include, but are not limited to, contractual difficulties, demand for Makeup Incorporated's products, the future market price of Makeup Incorporated common stock and the Company's ability to obtain necessary future financing. EQUITIES Magazine was paid 50,000 shares of restricted by Makeup Incorporated to write and print this profile. Before investing in any security, you are strongly advised to review all public filings of the issuer of such security, which can be found at www.sec.gov, as well as the warnings published by the Securities and Exchange Commission at http://www.sec.gov/investor.shtml.
