The Betty Mills Company, Inc. ( BettyMills.com ) was founded in 2002, with its charter to aggregate over the Internet, the growing market demand for highly consumable products in the cleaning, janitorial & facilities category, which traditionally had been supplied by local and regional ‘low to no-tech’ small mom-pop business owners across the country.
Our customers include 95% of the Fortune 100, and 150,000 others.
Today we are the category leader with 34% year over year growth in our core B2B categories.
The Company was recently named the #31st fastest growing privately held company in the Bay Area by the San Francisco Business Times, and in May 2008 entered the Internet Retailer 500 list, the equivalent of the Fortune 500 for Internet Companies.
Today, Betty Mills is the online leader in the sales of cleaning, facility and janitorial supplies to business customers, in an industry projected at $20 Billion annually, and $200 Billion annually when you include office supply products.
In addition to becoming the nation’s No.1 online destination for cleaning, facility & janitorial products, Betty Mills has successfully leveraged its business platform to drive high volume sales in other major business lines, such as maintenance supplies, office snacks & break room products and outdoor storage products. In fact, the company is currently the largest online supplier of outdoor storage products in the United States.
The Company will be opening discussion with qualified accredited investors as it seeks to augment its current base of 20 angel investors for further expansion capital of $5MM ($25,000 minimum investment size).
A detailed private placement memorandum is available to accredited investors.
Private one-on-one or group presentations by the company principals can be arranged.
To receive an investor package in advance please send us a private message or contact [email protected]
See us online at BettyMills.com
Executive Officers and Directors Betty Mills’ founders, Messrs. David Schulhof and Victor Hanna, have over 35 years of combined business experience in electronic commerce, management, direct marketing, operations and sales.
Victor Hanna, Co-Founder/Co-Manager Mr. Hanna has a diversified career in technology, marketing and management. He was a member of the 4-person startup team of Onsale.com, which was one of the earliest pioneers in electronic commerce. Onsale.com reached annualized sales of over $500,000,000 and a market capitalization of $1.8 Billion as a public company. He served as Vice President and managed the largest revenue producing division within the company. He also was instrumental in developing many of the online strategies and methods deployed by the company. Onsale acquired Egghead.com November 1999 and Mr. Hanna was largely responsible for integrating the acquired Egghead computer products business & merchandising group into Onsale’s operations. From 1989-1994, Mr. Hanna also served as President, CEO and Founder of Service Plus Technology, a preeminent distributor of local and wide area networking and remote access communication products that during his tenure led the market in dollar sales volume of remote access products and servers utilizing both remote node and remote control technologies. The company was sold to NASDAQ company Solitec in 1993. He served as Vice President and Co-Founder of Amerimac Cal-West Financial, a retail & wholesale mortgage lender that today funds well over $1Billion in loans annually. In New York City, Mr. Hanna served as a Financial Securities Consultant for Thompson McKinnon Securities, where he became one of the top retail producers in technology stock options within the firm. Finally, Mr. Hanna was an Automation Consultant for Touche Ross (now Deloitte Touche), where he, along with five others, led a New York City-wide office automation project designed to computerize the Touche Ross Financial Services Group, which performed audits on major securities firms throughout New York City. Mr. Hanna has a BA degree in Management Information Systems from Pace University in New York City and an associate degree in marketing from Nassau Community College.
David S Schulhof, Co-Founder/Co-Manager Betty Mills is Mr. Schulhof’s fifth startup venture. Prior to Betty Mills, he founded nicheMusic.com, Inc. in 1999, an online entertainment venture. In 1995, he started Make It So, an internet-based marketing firm. Capitalizing on its proprietary technology, Make It So helped clients such as Excite, Hickory Farms, and Hitachi increase traffic to their web sites and market their products and services online. In 1998, Make it So was sold to publicly traded ViaGrafix, a leading provider of technology-based IT training products and graphics software products, where Mr. Schulhof briefly served as the company's Chief Marketing Officer. In 1989, Mr. Schulhof founded Envisions Solutions Technology, Inc., the first company to provide a complete line of flatbed and handheld scanners and scanner solutions directly to consumers. By 1994, Envisions achieved a 3% U.S. market share and held a 20% market share of the mail order niche, and in 1995 it was sold to Umax Technologies, Inc. Prior to that, in 1986 Mr. Schulhof founded Complete Computer Services, the first company to offer computer-aided design software for under $100, which was sold to Logitech in 1988. Mr. Schulhof has been the focus of numerous articles in trade journals. He has also been featured in publications such as Inc. Magazine, Success Magazine, and the San Francisco Chronicle. He is a founding and active member of Young Entrepreneurs Organization, a group devoted to bolstering the personal and professional goals of entrepreneurs who have achieved their success before age forty.
Ofer Sabadosh, Chief Operating Officer Mr. Sabadosh began his professional career in 1995 with Planet Hollywood in Honolulu (HI), where he was the Controller for both the Planet Hollywood and the All Star Café restaurants with a total revenue in excess of $30MM. In 1998, Mr. Sabadosh moved to San Francisco where he took the position of Assistant Restaurant Division Controller with the Kimpton Group, a renowned San Francisco based Hotel and Restaurant Management Company with properties located across the United States and revenues in excess of $ 200MM. While with Kimpton, Mr. Sabadosh helped open several renowned San Francisco restaurants including the Fifth Floor and Ponzu. In 2000, Mr. Sabadosh took the position of Controller with NicheMusic.com, an Internet based world music website and Hip Hop record label. After two successful years in the music industry Mr. Sabadosh returned to the Food Industry by taking the Finance Director position with Catering by SMG at the Moscone Convention Center in San Francisco. Over the course of his tenure Mr. Sabadosh assisted in successfully leading the efforts to manage the growth of Catering By SMG to the largest single unit Catering operation in San Francisco with over $35MM in revenue. While with Catering by SMG, Mr. Sabadosh implemented both a POS system and bio-metric timekeeping system within a union environment, forged strong ties to the Mayor’s Office and worked closely with companies such as Oracle, Microsoft and Sun Microsystems. In 2004 Mr. Sabadosh was promoted to Senior Finance Director with financial oversight of the Long Beach (CA), Lynnwood (WA), Anchorage (AK) and Fairbanks (AK) SMG facilities. Mr. Sabadosh specializes in accounting and financing for multi-unit multi-revenue stream operations. He holds a Bachelor of Science degree in Accounting from San Jose State University, and is working towards his Masters in Accounting from the University of Hawaii. He successfully completed the CPA exam and is a member of the Professional Convention Management Association, the Golden Gate Restaurant Association and the American Institute of Certified Public Accountants.
The concept for BettyMills.com was developed to address the opportunity and growing need for purchasing highly consumable business products over the Internet.
Historically, demand in the janitorial supply category was filled by small regional mom and pop resellers or by janitorial maintenance companies that bundled the products with their cleaning services. As margins have compressed over the years, and as superstores have cropped up across the nation competing in some of the same categories, it has been increasingly difficult for small ‘feet-on-the-street’ suppliers with inherently higher overhead to survive. Further exacerbating the fall of the small mom and pop supplier has been their inability to adapt to technology changes that are currently driving operating efficiencies in the marketplace. There is a rapid shift on the part of businesses to purchase cleaning & janitorial supplies online, and Betty Mills is in the center of that shift.
The Company’s products are 100% drop shipped directly to it’s customers, and the Company generally holds no inventory, maintains no leases or ownership of warehouse facilities, and out-sources all fulfillment to it’s master distributor and manufacturer partners.
What Problems Does Betty Mills Solve?
The market size in the combined Janitorial and Facilities supplies categories (Jan/Fac) is approximately $100B and the need today is filled by thousands of very small independent regional janitorial and office supply dealers. Lacking in ecommerce competency, these companies are not equipped to meet the shifting changes in the marketplace, yet business customers expect a world-class online purchasing experience. So while there is a tremendous and growing need in the marketplace by businesses wishing to purchase Cleaning, Janitorial & Facilities products online, the existing online infrastructure provided by the traditional smaller suppliers in the industry has been insufficient or non-existent. Betty Mills is aggregating that demand such that the Company currently generates over 5,000 orders a month.
A second problem Betty Mills solves is on the manufacturer side. Manufacturers are increasingly frustrated by the trend of the superstores, such as Staples, to privately design, manufacture and private label their own product that traditionally were provided by major manufacturers with recognized brands, such as Avery, Fellows, Kimberly Clark and others. As well, the slotting fee ‘tax’ required to keep their brands on the retail shelves is ever increasing and ever burdensome. Manufacturers today desire to get closer to the business consumer online and today these manufacturers are eager to pay The Betty Mills Company significant marketing dollars to promote their goods direct to the business consumer and fight the trend toward the diminishing awareness of their coveted brands. For example, Staples currently generates 20% of their top line revenue from private labeled products, many of which they currently design themselves and produce offshore in countries such as China. With Staples long-term goal being 30% of Revenue to come from ‘own-brand’ products, this puts added pressure on manufacturers to find partners such as Betty Mills who can help them maintain their shelf space and branding. With $18B in product sales in the marketplace supplied by Staples, manufacturers simply can’t ignore the threat to their own brands. Another example is Costco, which sells products such as Toilet Paper under their Kirkland Brand. Equally alarming for the manufacturing community is the trend for the larger superstore retailers to stock a lesser amount of product parts in order to reduce the amount of inventory cost and overhead in the stores.
Another challenge manufacturers face is with the master distribution channel. Master distributors take inventory positions in the manufacturers product line and fulfill orders to independent dealers and retailers. These distributors have costs associated with storage and management of inventory, and therefore tend to inventory the top sellers, rather than the complete product line of the manufacturer. This limits the opportunity for manufacturers to reach potential customers with their extended product line. As a result, manufacturers are willing to develop drop ship programs exclusively designed for Betty Mills in order to market a broader line of their products. Business Model Betty Mills’ powerful business model fully leverages and exploits the synergy among its revenue streams: its e-commerce website, its extensive affiliate network and its unique marketing program (Partner Opportunity Program) designed for manufacturers.
At the center of the Company’s business model is the ability to develop superior and aggressive marketing strategies to drive traffic to BettyMills.com and generate a high volume of new customers that will purchase from the Company on an ongoing cycle.
The majority of the revenue is generated through the Company’s e-commerce platform (BettyMills.com) from the sale of a wide selection of 55,000 products. The Company’s also collects revenues in the form of marketing and advertising revenue and volume rebates through marketing partnerships. Orders The Company receives 75% of its orders directly online with no user interaction between the customer and the Company’s customer service call center staff. 25% of the Company’s orders are via the phone calls to the Company’s call center. Business Strategy Betty Mills’ business strategy for fast growth and market penetration encompasses six principle areas:
1. Building a strong brand identity for the Betty Mills brand
2. Market expansion: adding brand name highly consumable products at good value prices.
3. Superior customer experience: outstanding customer service and easy-to-use website to make online shopping a “fast and friendly” experience
4. Focused marketing and advertising efforts comprised of online and offline components
5. Delivery of superior and compelling content (product descriptions, videos, sophisticated search options) on the Betty Mills website
6. Continuing development of new and proprietary technologies to preserve market leadership Traffic Levels on the Website.
The Company currently receives on any given month between 300,000 to 400,000 unique visitors. Inbound visitor traffic is diversified among a variety of sources:
· Pay-per-click advertising (PPC) – BettyMills pays a search engine or shopping comparison website each time a visitor clicks an advertisement placed by BettyMills.
· Direct Type-In Traffic – Site visitors whom arrive directly by typing in BettyMills.com. Typically repeat customers or Word-of-Mouth referrals.
· Organic Traffic - Free traffic that arrives to BettyMills.com as a result of information from or about BettyMills being indexed in the search engines.
· Affiliates - 3rd party marketing person(s) that send customers to BettyMills for a performance based fee.
At present, there are several major brands that dominate the office supply business, yet, no particular company dominates the online janitorial supply business. When asked to name 3 of the top companies in the office supply category, most people can name 3 within a few seconds- Staples, Office Max, Office Depot, etc. When asked to name the leaders of the janitorial supply category, most people have a difficult time naming one company, if any at all. Betty Mills seeks to ‘fill that vacuum’ via brand ubiquity. We expect to be the brand most associated with the purchase of janitorial supplies by invoking a reflex response in the consumer’s minds when they contemplate such a purchase. The upside potential for online janitorial business is tremendous.
Within the office supply category, the superstore operations such as Staples and Office Depot have done a superior job of creating a public perception that their prices are the lowest available. The data shows otherwise. 35% of the products offered by this channel are priced at less than a 10% discount from list price. Over 500 items are priced above list price. The average discount is only between 16-25%. These outfits tend to lure customers with initially low starting prices, and then incrementally increase the prices as time goes on. While that method may have traditionally worked with paper catalogs, the Internet is quite a bit more revealing and efficient, and customers seek greater visibility with regard to their purchase online.
Betty Mills Unique Offerings:
· A strong brand identity which conveys an established image with old fashioned values
· A proven executive team with direct marketing and electronic commerce expertise
· A proprietary, scalable and extensible e-commerce system for ultra-convenient ordering
· A growing base of over 1,500 authorized affiliates, which generates up to 10% of the Company’s new customers.
· Low customer acquisition costs due to performance-based affiliate and online marketing programs
· 55,000+ products and $1Billion of inventory available for next day delivery.
· Highly competitive prices and very deep and broad selection
· No warehousing, fulfillment and logistics overhead, given the drop ship model
· A loyal base of suppliers, which subsidize our marketing expenditures.
BETTY MILLS BUSINESS SEGMENTS
Cleaning and Janitorial Segment BettyMills® is the most industry recognized brand in the online (B2B) janitorial supplies space. There is a rapid shift to purchase janitorial supplies online, and Betty Mills is in the center of that shift. This growing trend is driven by the overall growth of e-commerce, as well as the shortcomings of shopping at superstores, which include the wasted time, hazards, and hassle of navigating the crowded stores and lines, and transporting the goods back to the office environment. Additionally, the depth of product selection at the superstore is limited to the available shelf space. As a result, one is not likely to find a roll of commercial grade ‘Micro Twin’ roll towels at the superstores, since there are more favorable economics for them in stocking the lowest common denominator items or the weekly special. Businesses need reliable and consistent supply of commercial grade goods, and can’t afford to be switching brands or formats on an ongoing basis. Betty Mills on the other hand, carries over 55,000 products. Our categories run deep-and-wide with selection. In addition, Betty Mills has the greatest share of marketing partnerships of any other online reseller of janitorial supplies. The Company’s Partner Opportunity Program (POP) is a full-service marketing program aimed to increase brand visibility and online sales by up to 300%. Participating manufacturers will provide $1MM of marketing dollars in 2007 to promote their products on BettyMills.com.
Outdoor Product Segment
The Betty Mills Company pioneered the business of selling large storage sheds online. Our experience handling over 100,000 residential and business shed deliveries, along with our close relationships with the worlds leading manufacturers, ensures that customers experience a trouble free transaction.
The total estimated annual shed sales in the U.S is 1.5 billion; Of that, 10% ($150MM) is sold Online. Betty Mills’ estimated 2007 Shed Sales is 6.7% ($10MM).
In 2007, Betty Mills was recognized with the "#1 Online Retailer of the Year" award by Arrow Group Industries, Inc., for their outstanding sales and marketing achievements, superior customer service, and other significant milestones.
Office Snack & Breakroom Segment
The Company has been successful at leveraging the ecommerce marketing platform it has created to launch synergistic categories. For example, in January 2007 the Company launched its “Office Snack & Breakroom” product category in conjunction with a $3 Billion dollar National master distributor of vending and specialty foods, and already the category is one of the Company’s fastest growing business units.
The Betty Mills Customer
Betty Mills has over 100,000 unique customers that are distributed widely throughout the United States with California, New York, Florida and Texas the top 4 U.S. states in which the Company receives its orders. The customer base is highly diversified, with no single customer representing a significant percentage of our revenue. These customers can be categorized as Fortune 2000, government, educational institutions, SMB (Small to Medium Sized Businesses), and general consumers. The company is not dependent on any one single business customer to generate sales. The average customer order is approximately $280, with many orders reaching into the many thousands of dollars.
Offline Marketing Strategy
Betty Mills offline marketing strategies, including print, broadcast media campaigns and trade shows, will play a big part in reaching both new marketing partners and new customers. The Company’s national PR branding campaigns are expected to begin in the second half of 2007. For example, the company is scheduled to appear on the A&E cable program Flip This House in September 2007, with an audience approximated at 2MM.
The Betty Mills Brand
The Company’s brand gets its origins from industrial paper ‘Mills’, where paper traditionally has been manufactured. The personification of the ‘Mills’ name, and the fictional Betty Mills character have been received well in the marketplace. The Betty Mills brand is friendly, memorable and it has excellent brand extensibility. Our brand serves to communicate old fashioned and enduring values, such as hard work, honesty, true service, and old fashion American quality. At Betty Mills, we intersect those old fashion values with high technology, and with that convergence comes simplicity. It is the intention of the management to continue to build a lasting and great American brand that will live on for many future generations. The Company also makes use of its ‘Double Markdown Trademark’ and it’s ‘Fast and Friendly Service is our Business’ slogan.