Supplycompass
An accessible platform that brings trust and transparency to manufacturer sourcing
- Location
- London, United Kingdom
Categories: Clothing & Accessories Digital B2B
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Investment
sought: - £200,009
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Equity
offered: - 12.37%
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Investment
amount: - £317,590
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Valuation
(pre-money): - £1,416,665
Idea
Introduction
Many small and medium sized brands find it surprisingly difficult to find and connect with good international manufacturers.
We’re making it easier for them.
Supplycompass is an intuitive, informative and structured manufacturer sourcing platform that makes the whole process of producing a product more efficient for both brand and manufacturer. It ultimately helps build trust and create stronger, better relationships.
• We have a database of high quality, hand-picked manufacturers - currently focused in India
• Our manufacturer profiles are detailed and engaging, with lots of video content.
• We pair brands with manufacturers based on their requirements and key attributes
• Our platform draws out all the information a manufacturer requires to accurately price and make a product.
• Our proven process provides brands with all the tools and support they need to successfully deliver their product from design through to delivery.
Your investment will be used to develop our fully functioning platform, build our team, acquire more brands and find more amazing manufacturers.
Intended impact
To find global manufacturers, small and medium sized brands currently rely on old-fashioned, inaccurate directories or networking in person - an expensive and time-consuming process and the chances of succeeding are slim.
There are three big challenges brands face:
• The initial search. The information given by current providers is confusing and misleading.
• Choosing your manufacturer. Getting quotations is unstructured, knowing what to ask and deciding if the manufacturer is right for you is difficult.
• Working with manufacturers. Brands and manufacturers speak different technical languages and maintaining clear communication is difficult. We understand that there is no single portal for dealing with a brands needs.
Supplycompass aims to solve these three challenges by providing accurate and detailed information on manufacturers and structuring the process and communication from design to delivery - all within a single platform. It gives brands the help they need to connect with the best manufacturers and ensure a quality end product.
Substantial accomplishments to date
Since founding Supplycompass in November 2015:
- We’ve reviewed over 100 factories.
- We’ve worked with 15 UK brands.
- We have developed robust supply chains, including 18 Indian manufacturing partners.
We have brought on-board some truly excellent and relevant advisors and investors:
Paul House – Ex MD of SGS, the world’s leading testing, inspection and certification (TIC) company, Paul is a specialist on India. We have brought Paul on as an official advisor to help us with our TIC strategies as well as building our manufacturer audit and partnering philosophy.
Chris Forest – Early investor in Net-A- Porter and Rapha. Director of a successful shoe brand.
Duncan Thomson – Business development and strategy guru, Duncan has joined us as our Marketing Director.
Monetisation strategy
We provide our brands with a unit price very early in the process. This includes all costs to get their product produced and delivered to their door in the UK, making sure there are no surprises further down the line.
We have three main revenue streams:
1. Manufacturer matching fee. A one off fee that is paid on the first order the customer makes with a manufacturer.
2. Commission on orders. We charge a percentage fee on the manufacturing order value which is incorporated into the manufacturing cost.
3. Manufacturing Subscriptions. We charge our manufacturers a fee to be represented on our platform. For this we visit them and create an engaging profile. We plan to bring them on average 4 new clients per year.
Use of proceeds
Main Costs:
- Platform development
- Salaries (UK and India)
- Office space (UK and India)
- Marketing cost (exc. Salaries)
- Manufacturer acquisition
- Legal, accounting, licensing and Insurance
We are investing our money in areas of the business that will drive scalability, lower the cost of client acquisition and improve the customer journey.
Please note that whilst the campaign is labelled as EIS eligible, the company has its SEIS allowance remaining. We will therefore be looking to seek SEIS relief on the first £150,000 invested into the campaign and EIS relief on the balance. Any tax relief is dependent on personal circumstances and may be subject to change in the future.
Market
Target market
Our customers include any brands who are looking to find international manufacturers.
This may include those that:
- Don’t have good connections in international manufacturing.
- Don’t have the knowledge of how to get a product from concept to finished product.
- Are looking for a robust supply chain including logistics capability.
- Have little experience in creating and managing contracts.
- Lack the buying power for good prices.
- Lack the time and resources to source and manage a manufacturer.
In practice this means we are targeting the following customers:
- Start-ups looking to make their first product line.
- Small businesses looking to move to international suppliers.
- Large corporates looking for bespoke merchandise.
- Medium - Large companies looking to increase supply chain efficiency.
- Buying departments of established companies looking for more efficient sourcing paths.
We have started in India and plan to grow here first, before expanding the model into other countries. Our manufacturers fall into the following categories:
- Fantastic manufacturers who aren’t being found by customers via traditional routes.
- Manufacturers who want to attract more international clients.
- Ethically aware and/or environmentally sustainable manufacturers.
- High end manufacturers who want to stand out from the crowd.
Our product target areas are:
- Textiles (apparel, leather goods, soft furnishings).
- Small consumer products (plastics, metal items, tool and dyes).
- Larger consumer products (furniture, printing).
Characteristics of target market
Using a bottom up approach:
There are 250,000 UK small businesses in wholesale and retail. If we capture twenty percent and assume two £30k orders/year, our total addressable market is approx £300M.
Using a top down approach:
UK imports in relevant sectors total £56bn. If we capture 10%, our total addressable market is approximately £560m.
These numbers are for the UK only. As we expand into Europe and the US, these numbers dramatically increase. For the above numbers, we have assumed revenue is ten percent of order size. This is consistent with current sourcing agents.
Our current target market either has to go it alone which rarely results in favourable outcomes or has to approach the large sourcing agents who do not cater well for this end of the market. This is because they have an entirely manual (people-based) infrastructure.
We believe there are currently a huge number of products that are not reaching the market because they fail to find a suitable manufacturer at an affordable price. If we can create an opportunity for these businesses to succeed, we will open up a whole new sector of the market.
Marketing strategy
Strategy.
Our acquisition strategy is based on leveraging the latest technologies to help us identify, educate, acquire and nurture our leads through to point of sale. We test constantly, learn quickly from mistakes and capitalise on opportunities.
Industry Events
• Tradeshows
• Design Forums
• Start Up Meet ups
• Networking
SME Promotions.
• Promotional product giveaways – e.g. marketing departments looking for short run production.
• Free (online) workshops on how to get things manufactured
Design schools.
• A competition for students, with the winner getting their first product run manufactured for them
• Promotions and discount codes for students
• Design ambassadors to promote Supplycompass within their social and professional circles
• Host events and talks on manufacturing sourcing and production
Social Media campaigns.
• Educate – About materials and manufacturing processes.
• Inspire – potential clients with amazing products already made.
• Document - current customer journeys.
• Advertising partnerships with key magazines and websites.
• Writing articles for websites and magazines.
• Ambassadors for FashionRevolution.
Logo placement.
• We will put a Supplycompass ‘C’ label in all our clients’ product. This label will be a sign of responsible sourcing for our customers and a way for us to raise awareness in our brand. This label will be a sign of responsible sourcing for our customers and a way for us to raise awareness in our brand.
• Advertising within co-working spaces
• Host events and talks on manufacturing sourcing and production
Targeted collaborations with complimentary businesses.
• NFP influencers in promoting transparency in the supply chain
• Crowdfunding platforms and angel investor collaboration - become the trusted development partner
Competition strategy
We believe the solutions provided by Alibaba, IndiaMart and other directory style platforms are failing. Our offering is made extremely defensible because manufacturer relationships cannot be made overnight.
We know and understand that the only way to create this platform is from the bottom up. This is because current online directories contain huge amounts of untrustworthy data about (often bogus) manufacturers.
By creating an information and knowledge rich hub, built into an augmented online self-service platform we intend to become the number 1 solution for manufacturer sourcing.
There are significant barriers to entry listed below.
- Manufacturing contacts and knowledge.
- Access to designers and illustrators.
- Clustering of orders to provide buying power.
- Extended supply chain capabilities – e.g. logistics, contracts etc.
Key to our offering is being able to help small businesses who do not have the contacts, knowledge or set-up to be able to do many of the things that we can.
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