I finally got around to watching some past episodes that I missed of one of my favorite shows, The Profit. Being in the skin care business, the Lano Cosmetics episode naturally interested me. I know a lot of small independent skin care companies that employ a similar model as Lano Cosmetics. That is, introducing a ton of different products and hoping a few stick and become big sellers.
So the main story behind Lano Cosmetics is its original flagship product made with lanolin. This is used primarily as an ointment base. It is a fatty substance naturally found on sheep’s wool. Despite it being the main ingredient in the first product from Lano Cosmetics, its use dwindled over time. Lano Cosmetics went from a maker of a popular lanolin based lip balm to more of a novelty glam skin care product and device company.
Marcus Lemonis was not impressed with the new model. Sales were stagnant and inventory was piled high with no chance of selling. He ended up making a deal to take 20% of the company and modified the strategy moving a hub and spoke sales model with lanolin back as the focus ingredient. Other products were made based on lanolin that make up the new brand identity.
He also got Lano Cosmetics on QVC and in to a strategic partnership with Birchbox. Lemonis predicted that sales would double over the next year based on these new initiatives. What I found really interesting was Lemonis’ focus on the medical grade ingredients. Strangely, lanolin is not really an ingredient that I would consider to be medical grade. I’ve written about many different clinically tested peptides that make up some of the top cosmeceuticals on the market. For instance, Elite Serum Rx is known for its high concentration of Lipotec’s Argireline.
But lanolin is pretty much like shea butter or jojoba oil. I consider it more of an additive or emulsifier. Hardly what I would consider to be medical grade and I’m really shocked that QVC went along with that labeling as their compliance is known throughout the skin care industry as the strictest around. Nevertheless, the rules are always different when you come to the table with a heavy hitter and nobody is heavier than Marcus Lemonis right now. I wasn’t really impressed with what Lano Cosmetics had in terms of an operation but it was good enough to get a deal and I’m sure they will succeed now thanks to all the popularity from The Profit.