Soap may be a commodity, but Deanna Kelly has figured out a way to make it a luxury item.
Who pays $8 for a bar of soap? A lot of people, it turns out. Kelly says she's aiming for more than $1 million in sales this year from the three Naples Soap Co. stores she owns and the website NaplesSoap.com, up 30% from last year.
Kelly's pitch is that cheap soaps you buy at the supermarket are loaded with dangerous chemicals. By contrast, hers are made with natural ingredients that she says alleviate symptoms of a rash of skin problems from psoriasis to eczema, sunburns and dryness. Plus, she says they last longer than ordinary soaps.
Besides three stores in Naples, Fort Myers and Punta Gorda, Kelly sells soaps and other bath products online and at local “green” markets. She recently launched a two-hour radio show called The Soap Dish on Naples Talk Radio station 98.9FM WGUF that has already found enough sponsors to pay for the airtime. She invites guests and they talk about topics related to healthy lifestyles. “It's kind of the Martha Stewart model,” Kelly says.
In addition, Kelly partnered with oncologists and plastic surgeons to promote the chemical- and scent-free soaps such as sea salt soap. That's because people who have had surgery and radiation treatment are sensitive to certain chemicals and scents.
Hotels looking for unique bath products for their guests present good opportunities, too. For example, Kelly sells soaps at wholesale prices to Naples Bay Resort for its guest rooms and the hotel's store. Naples Soap products will also be featured in the group-sales catalog for the Ritz-Carlton, Naples resort on the beach, she says.
Kelly's soap operation is about to get much bigger. In addition to adding two more corporate stores, she's seeking $500,000 to $1 million from investors to franchise the concept. Within the next two years, she plans to establish her own 15,000-square-foot soap-manufacturing operation near her headquarters in Naples.
Kelly opened her first store two years ago after leaving a well-paying but unsatisfying job. “In 2009, I was doing medical sales and I was incredibly unhappy,” says the former nurse.
That former job involved coordinating home health care for patients recovering from surgery. “Patients were treated like cattle,” she says.
Kelly suffered from eczema and psoriasis, two conditions that also affected her children. In her search for products that would alleviate the symptoms, she tested hundreds of soaps and scrubs. “I was the queen of lotions and potions,” she laughs. “I experimented on myself and other people.”
Armed with that knowledge, Kelly opened a small 300-square-foot store in Tin City, a busy waterfront tourist destination near tony Fifth Avenue in Naples. Her unscented Sea Salt Soap was an instant hit. “Customers from up north wanted to order more,” she says, leading to mail orders. “We have a huge repeat clientele.”
Since then, Kelly has opened another store in the River District of Fort Myers and Fishermen's Village in Punta Gorda. She's considering another store on St. Armands Circle in Sarasota and a fifth store in Palm Beach.
While clients rave about her soaps, Kelly says she is careful to avoid medical claims. For example, she never uses the word “cure,” but instead uses “helps relieve.”
The 42-year-old mother of two teenagers constantly creates new products out of recipes she formulates in her current warehouse space. She mixes ingredients to create the products she wants in her line, and then hands off the recipe to her manufacturers. She's already added 30 new bath products this summer and stocks 600 in the stores. “I develop product every week,” she says. Now, 40% of Kelly's bath products are custom-made for her by U.S.-based manufacturers using her formulations.
Kelly says she'd like to establish a manufacturing facility within the next two years, though she says it could cost $2 million. But besides controlling costs, the advantages to manufacturing would be faster distribution, better inventory management and the ability to make small batches.
To grow the business, Kelly says she's looking for investors. She's open to equity or debt, though she wants to retain control of the company. Because Naples Soap is a startup, Kelly says she hasn't turned to banks for financing.
To build national and international distribution and to establish the franchise system, Kelly says she needs $500,000 to $1 million. That money would also be used to syndicate her radio show, improve the website with search-engine optimization and social media, create new products and develop packaging materials.
“We've been contacted by people from all over the country,” says Patrick Renda, Naples Soap's chief operating officer and executive vice president of business development. These include both high-net-worth individuals and investment companies. “We've got West Coast investors who found us through word-of-mouth,” he says.
Kelly says she's working with consultants and hopes to start selling franchises in June. She estimates setting up the paperwork and other back-office operations for the franchise system will cost about $100,000. About a dozen prospective franchisees from Florida to Colorado have expressed an interest, she says.
Despite her success in a difficult economy, Kelly is understated about how far her company's come since she opened in Tin City two years ago. “I have so far to go,” she says.