Unilever has just purchased start-up company Dollar Shave club. Although referred to as a startup, Dollar Shave Club is a 5-year old ecommerce firm that sells male grooming products such as disposable razors and lotions. Each product is sold directly online for just $1 per item. Although it has yet made no profit, it does have a membership totaling 3.2 million.
This would appear to be an ideal opening for a marketing company able to convert such a huge site membership into profit. Unilever saw that, and purchased the business for a reported $1 billion – not bad for a firm that is reputed to have never made a profit! It sounds like some of the internet company successes that had a lot of following but never sold much prior to the dotcom crash in the early 2000s. This one came good!
Michael Dublin, the founder of the company, is ‘excited’ by the deal that will enable him to open the business into new and profitable markets. His success is an indication of the power of social media. Dollar Shave Club became known globally due to a marketing YouTube video that displayed his company in a humorous video. View the Dollar Shave Club video here. This opens in a new window so can easily get back here!
This video went viral and ultimately led to the purchase of the company. After its venture capital finding in November 2015, the company was valued at $615 million. Its profits this year are believed to be over $200 million after turning over $152 million last year.
Amazon has been involved in many start-up successes, and YouTube has played a significant part in the success of new businesses that would have failed in the old days without social media and online marketplaces. Amazon has permitted many firms to sell them and become households names products without the need to purchase a physical store.
Following the success of Amazon, there has been an increasing number of start-ups looking to sell retail goods without having to invest in physical stores. Unilever is looking to become a serious player in the male grooming market, currently dominated by the giant Gillette brand owned by Proctor and Gamble.
Unilever president, Kees Kruythoff commented that “Dollar Shave Club is the category leader in its direct-to-consumer space.” He went on to say that Unilever will leverage its global strength to help the Dollar Shave Club achieve “it’s full potential in terms of offering and reach.”
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