This Skin Care Startup Founded with $3,300 Now Heads to 505 Target Stores

Key Takeaways:

• Two 23-year-olds with $4,000 in the bank launch Three Ships skincare brand that reflects their passion for wellness and eco-consciousness.
• The startup aims to fill a void in the market for natural beauty products at an affordable price, targeting ‘skintellectuals.’
• Today the duo’s $40-and-under, clean beauty products are a $1.5 million business sold in Whole Foods and now more than 500 Target stores.

When it comes to beauty and entrepreneurship, age is nothing but a number. Toronto-based skin care startup Three Ships is another millennial wunderkind story, proving that success doesn’t necessarily require years of experience so much as a great idea, a good team and the will to make it happen.

Co-founders Connie Lo and Laura Burget launched the brand with just $3,300, working on the business on nights and weekends while they both held full-time jobs.

Three Ships ended its first year with $40,000 in sales.

This month Three Ships hits a new milestone, adding Target to its list of national wholesale distributors that already includes Whole Foods and Urban Outfitters.

The Three Ships origin story

Lo and Burget were just 23 in 2017 when they started the brand from their kitchen tables. Their inspiration to found the company came, in large part, from their young age: Wellness- and eco-conscious, the two were looking for a more affordable alternative to many of the pricey natural skin care and beauty brands on the market at the time.

“Connie and I pride ourselves on being exceptionally hard workers,” Burget told CO—. “We’ve learned every aspect of our business from the ground up and this allowed us to save a lot of money in the earlier stages.”

Their commitment appears to have paid off. Despite its many crises, 2020 has been a banner year for the brand. In the fall, Lo and Burget made an appearance on the television business competition show Dragon’s Den (Canada’s answer to Shark Tank in the U.S.) where they received multiple investment offers and ultimately agreed to a royalty deal.

“Fast forward to today and we are seeing days where we are doing over $40,000 in online sales alone,” Burget said. For 2020, “we are projecting that we will be finishing off at $1.5 million in revenue, up from $650,000 last year.”

The inspiration behind ‘natural products at an affordable price’

As Burget sees it, “consumers were tired of being lied to and ripped off by overpriced and green-washed natural skin care products,” she told CO—. “We believe that the future of beauty is natural and that consumers deserve to have access to products that they can afford, work and are also truly transparent with the ingredients that they use.”

Since Three Ships was founded, the natural skin care business has only gotten hotter. The market for natural beauty and skin care was estimated at $22 billion, according to 2019 research from CB Insights. Further data from Grandview Research expects the category to grow at a 5% compound growth rate between 2020 and 2027.

“Historically, natural skin care has been a niche market, carried in premium specialty retailers,” Burget said. This has also generally translated to a higher average price point, aligned more with the aspirational Goop shopper than the everyday mass consumer.

Three Ships is out to change that by making natural beauty accessible and affordable for younger consumers. In fact, the brand promises that all its products will forever be available for under $40.

“As a new brand, we aren’t limited in the same way that these larger more expensive brands are,” Burget continued. “The whitespace that we are filling is having natural products at an affordable price.”

Identifying the ‘skintellectual’ customer

Burget and Lo know their target customer, because they are the target customer: a “skintellectual” (skin intellectual, of course), between the ages of 25 and 40.

“This consumer has a strong interest in skin care ingredients, including aspects like sourcing and benefits,” said Lo. “She wants to know exactly what she is putting on her skin, its proven purpose and why she should be using it instead of another ingredient [or] product.”

Three Ships is ready to meet consumers’ increasing demands for transparency when it comes to ingredients sourcing and product manufacturing, with a “fully searchable ingredient glossary, where consumers can find where each ingredient is sourced, scientific studies backing that ingredient and which products the ingredient can be found in,” Lo said.

“This level of transparency goes above and beyond, and our customers often tell us how helpful these resources are for them as they evaluate their skin care products.”

Retail expansion and the future of pandemic-proof beauty

The expansion into essential retailers like Target and Whole Foods is key for a new brand like Three Ships, particularly as consumers are less able to experience beauty products in real life at specialty and department stores, as the pandemic has heavily curtailed in-store product testing.

At the same time, Burget and Lo hypothesized that once consumers discovered the brand in-store and were able to experience the products firsthand, they would repurchase directly online.

“Our strategy since the beginning was to focus on aligning ourselves with reputable retailers,” Lo said. “Skin care is a deeply personal purchase that requires trust.”

Post-purchase surveys revealed their hypothesis to be true, even through the pandemic, which has challenged other categories such as color cosmetics.

Burget also attributes the success of the skin care and DIY home spa treatment categories to a rising interest in self-care. “The pandemic has taught us all the importance of slowing down and of health. I would expect that the future of skin care will be more aligned with self-care and less about beauty,” Burget added.

“The skin care industry has been forever changed by COVID, generally for the better."

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