About Azio Beauty
Founded in April 2022, Azio Beauty is a self-financed venture that stands firm on its belief that high-quality skincare should not be a privilege, but a right for every woman. Our core principle is to defy the conventional beauty industry norms, where the typical product is marked up at least 12 times its manufacturing cost. We pledge to deliver efficient skincare solutions that don't come with a luxury price tag, ensuring quality skincare for all.
Our strategy to offer unbeatable prices involves eliminating intermediaries and building direct alliances with world-class laboratories that serve the most esteemed brands worldwide. These savings are passed directly to our customers. Our skincare products are crafted from the ground up, combining scientifically validated active ingredients and the expertise of the industry's leading laboratories.
Since its foundation, Azio Beauty has enjoyed an impressive growth journey, achieving £2 million in revenue within the first year and sustaining a monthly growth rate of 20%. This remarkable growth was powered exclusively through internal resources and revenue, without seeking any external funding. This self-sustained growth strategy, however, presented unique hurdles, particularly in inventory management and financing areas.
To fuel their dynamic growth, Azio Beauty employed a negative cash conversion cycle, a strategy that allows revenue generation before the need to pay expenses (products). This was achieved by steering a significant part of their sales towards pre-orders. While this strategy enabled Azio Beauty to finance their growth internally, it also introduced new complexities into their operations.
One major drawback of a heavy dependence on pre-orders is potential customer dissatisfaction. In the skincare industry, where customers often demand immediate access to products, waiting for pre-ordered items can breed frustration and negatively affect the customer experience. Azio Beauty had to tactfully manage this risk, as customer satisfaction was at the heart of their business.
Additionally, the reliance on pre-orders also posed financial challenges. Advertising expenditure usually brings a lower return on investment for pre-ordered items compared to readily available stock, as customers generally show a lesser inclination to buy items that aren't immediately accessible. This was denting Azio Beauty's profitability, despite their striking revenue performance.
Coupled with the need to accurately manage inventory - avoiding overstocking on less popular SKUs and ensuring that key SKUs never ran out - these factors posed a complex problem for Azio Beauty. Their previous inventory management tool, Inventory Planner, was not equipped to meet these growing demands. Azio Beauty required a tool that could not only manage the intricacies of their inventory management needs but also help them leverage their existing data to sketch realistic growth scenarios and inventory plans. This advanced, data-focused approach was crucial for their ongoing success and ability to maintain their swift growth pace.
Commenting on the problems Azio Beauty faced before using Prediko, co-founder Jonathan Penna, said:
How Azio Beauty solved this using Prediko
To overcome these challenges, Azio Beauty partnered with Prediko, a startup that provides an inventory operating system tailored for Shopify businesses. Prediko's platform offers a set of solutions perfectly aligned with Azio Beauty's distinct needs.
One of the key features of Prediko is its capacity to aid brands in planning growth scenarios. This involves creating different growth models considering factors like seasonality, ad campaigns, and more. As time progresses, Azio Beauty can compare real sales with revenue targets, allowing them to make more informed decisions about their business.
Moreover, Prediko boasts a robust inventory management solution. With Prediko, Azio Beauty can assess their inventory status, plan, and order more products. The platform generates inventory reports that display fast-selling products, slow-moving items, and the current retail value of the inventory.
Beyond these features, Prediko's platform also provides options to create purchase orders (POs) and directly finance them. This feature is especially valuable for Azio Beauty, considering their reliance on pre-orders and the resulting cash flow challenges.
Prediko's financial solution enabled Azio Beauty to purchase inventory without exhausting their resources or depending on traditional banking institutions that might be hesitant to lend to businesses with limited "assets to be used as collateral".
Since implementing Prediko's solution, Azio Beauty has seen notable improvements in several critical areas of its operations.
- Enhanced Inventory Management: Prediko has provided Azio Beauty with a comprehensive tool for inventory management. They now have the capability to assess their inventory status, monitor fast-moving and slow-selling items, and efficiently plan and order more products. This has allowed them to prevent overstocking on less popular SKUs and ensure that key SKUs are never out of stock, considerably improving their inventory turnover and sales.
- Advanced Growth Planning: Prediko's capacity to create various growth scenarios has empowered Azio Beauty to devise more precise growth plans and forecasts. By comparing actual sales with revenue targets, Azio Beauty can make data-driven decisions, enhancing their strategic planning and ensuring more predictable and sustainable growth.
- Financial Stability: Prediko's fintech solution has offered Azio Beauty a new approach to managing their finances. By financing their inventory through Prediko, Azio Beauty is able to maintain a healthy cash flow, even with a large proportion of their sales coming from pre-orders. This has helped to smooth out cash flow irregularities associated with a pre-order model and provided a reliable alternative to traditional bank financing.
- Elevated Customer Satisfaction: With improved inventory management and the ability to maintain a constant supply of their key SKUs, Azio Beauty has been successful in increasing customer satisfaction. Customers no longer have to wait for pre-ordered items or face the disappointment of popular items being sold out.
- Boosted Profitability: Finally, by managing their inventory more effectively and reducing the reliance on pre-orders, Azio Beauty has been able to improve the return on investment for their advertising spend, enhancing overall profitability.
In conclusion, Prediko's solution has efficiently addressed the unique challenges that Azio Beauty was facing, paving the way for continued rapid growth, enhanced operational efficiency, and improved financial stability.