39 minutes | Aug 18th 2017

Turning Cosmetics into a $500 Million Brand | Toni Ko

Toni Ko, founder of NYX cosmetics and owner-founder of Perverse Sunglasses, worked as an employee (on an allowance) at her family’s cosmetics business from ages 13-25. Today on the EO Podcast, Toni discusses the challenges of working at her family’s shop as a teen and young adult but also how her experience there acted as a springboard to start NYX. Tune-in to learn how Toni handled the sale of her business after 15 years and what catalyzed her next business move. 

Time Stamped Show Notes:

  • 00:19 – Habits that make Toni a successful entrepreneur
  • 00:33 – Having a routine is very important, especially in the morning for health and body care
  • 01:27 – The book “From Good to Great” by James Collins inspires her and transformed her life
  • 01:40 – Core values for NYX and Perverse are honesty and sticking to what you promise
  • 02:18 – When she was little she’d volunteer for everything and was very enthusiastic
  • 02:46 – She grew up in South Korea in a rural area; she’s a country girl
  • 03:30 – Her family moved to the U.S. in 1986 (7th grade)
  • 03:50 – She’s happy that she grew up in nature
  • 04:22 – She had to learn a new language and culture, she had to be creative and hypersensitive of her surroundings to understand what was going on
  • 05:20 – This hypersensitivity has helped her in business; she can pinpoint situations quickly
  • 06:03 – The “gut-feeling” comes from the ability to analyze body language, energy
  • 06:58 – Her family owned a small business selling cosmetics and she’d always work there
  • 07:30 – She’d go to school and work at the store with customers, merchandise, POP; she experienced business from the point-of-view of an employee
  • 08:20 – She started looking into how things could be done more efficiently
  • 08:38 – Her older sister did her own thing and her brother, being a boy, was exempt
  • 09:00 – She didn’t like being at the store all the time, her mom was the scariest person at the time
  • 09:23 – Her mother was very strict: she couldn’t chew gum or sit down in the store
  • 10:00 – There were fun moments, too; cleaning up, inventory, and displays were fun to do
  • 10:30 – She worked with the family business until she was 25 years old and she lived at her parent’s house with an allowance
  • 11:00 – This was normal to her; it’s a cultural thing
  • 11:23 – She told her mom that she wasn’t going to work at the store anymore and was going to get a job
  • 11:42 – She decided to start her own business with a loan from her mother and started it at 26 years old
  • 12:10 – She birthed the idea out of need; she didn’t have money to spend on high-end cosmetics when she worked at the family store
  • 12:44 – Her friends would buy department store products and she would buy drugstore products; she was embarrassed
  • 13:35 – She knew some of the ins-and-outs of business, suppliers, and how the industry worked; she knew that high-end products were expensive due to $ spent on marketing
  • 13:55 – Instead of spending on marketing, she wanted to put the money back into the product and depend on consumer’s word-of-mouth marketing
  • 14:20 – She started a one-woman cosmetic company: she delivered, packed, designed, created invoices/orders, in a 600 square foot showroom
  • 14:50 – In the first year, she sold $2 million worth of wholesale cosmetic pencils, which is $4 million in retail and she packed and delivered each box
  • 15:27 – Her mother was her first client and she got the rest of her clients through word of mouth; people had never seen something of such quality at that low of a price point
  • 16:00 – She made “sleek” packaging inspired by higher-end brands
  • 17:00 – In 1999, when there was still a chain in business (wholesalers to retailers), even retailers wanted the product, not just drugstores
  • 17:50 – She did a lot of tradeshows; they were the way to get your product in front of customers/suppliers during that time
  • 18:16 – How it has changed since then
  • 18:25 – She gets nostalgic thinking of trade shows, especially the ASDAMD show that would showcase mom-and-pop shops
  • 19:10 – 10-15 years ago, the show was packed and now it is much emptier
  • 19:40 – You have to adapt to the changes in business
  • 20:01 – As she launches her new business for sunglasses she knows there’s 90 million millennials that shop on their mobile
  • 20:46 – 90% of traffic comes from the mobile and this is important for e-commerce and when considering website design
  • 21:30 – Only 18-20%(not exact) of business is done through e-commerce, the rest is still through brick and mortar businesses; retail isn’t dead
  • 22:35 – Those who can be like a chameleon and adapt to change succeed and those who don’t, don’t
  • 22:45 – How did Toni adapt with NYX?
  • 22:55 – Organic growth and marketing
  • 23:10 – In 2008 NYX got its big break with the market crash: People weren’t shopping at expensive stores and were buying drugstore makeup instead
  • 24:00 – Once her product was purchased, they liked the quality and would repurchase
  • 24:15 – In 2008 social media hadn’t boomed yet, but YouTubers were doing tutorials and “hauls” with NYX products
  • 24:58 – Some companies resisted this change, but NYX embraced it and sent products to YouTubers to use, review, and blog about
  • 25:27 – The jumbo eye pencil in white got very popular because YouTubers were using it as an eye shadow base to keep eye shadow on; it was the #2 bestselling item
  • 27:10 – Struggles in business
  • 27:30 – Everything was a struggle but it was all good
  • 27:40 – You get into business knowing that there will be struggle
  • 27:50 – No matter the size of the company, the headaches exist
  • 28:16 – Why Toni sold her business
  • 28:24 – She thought she was ready to retire; she was married to the company and after 15 years she felt that she needed to part from it
  • 29:10 – Selling the company came down to who was going to pay the most, and L’Oréal bought it at auction
  • 29:30 – The whole process took one year
  • 29:50 – Feelings of unpreparedness when selling
  • 30:03 – She was totally ready to sell; she started phasing herself out with a new CEO, CFO, and product developer so she wouldn’t have any doubts that it would continue to run smoothly
  • 31:28 –She was miserable for 3 months after the sale, because the company felt like her identity and worth
  • 32:10 – She’d wake up and not know what to do
  • 32:30 – To get out of the slump she overcommitted herself to charities, boards, committees, foundations, meetings, and her real estate and investment company portfolios
  • 33:12 – It was very artificial; she was just trying to fill the time
  • 33:32 – Her true calling is in producing products, so she started Perverse, a sunglasses company
  • 34:16 – After she sold the company, she got her wire transfer, said goodbye, drove herself home, felt like a deflated balloon, and slept for 14 hours straight
  • 36:00 – Now she feels proud and happy with the decision, the brand, and the company’s direction
  • 36:50 – She knows the brand will be revered globally
  • 37:00 – Advice for her 26 year old self: “Just chill”
  • 37:23 – Advice for aspiring entrepreneurs: Focus only on the goal, everything else is noise

Key Points:

  1. Start your day with a mind and body wellness routine so that you are ready for a successful and productive day.
  2. Adapt to change and advancements within your market to avoid falling behind.
  3. Focus only on your goal, everything else is noise.

Resources Mentioned:

To listen to more EO Wonder episodes as well as our other podcasts, head to EOPodcasts.com

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