MBX (formerly Memebox) is a venture-backed beauty and personal care startup headquartered in San Francisco.
The company makes all of its products in Korea, leveraging the latest K-beauty innovations in the formula, packaging, and speed-to-market.
Its brands include Kaja, I Dew Care, Pony Effect, I’m Meme, and Nooni and, in the United States, it sells its goods via Ulta, Sephora, Amazon and DTC.
Lynn Chim, MBX’s US Amazon business lead, needed to improve margins in the face of rising COGS and ad costs.
This meant trying to increase prices without hurting revenue. Lynn realized that this tradeoff was a tricky needle to thread – make too aggressive a price increase and you churn customers deteriorating both bottom and topline, make too conservative a price increase and you end up leaving profit on the table.
She approached Luca to help measure customer elasticities and recommend price changes to meet her goals.
Each business has unique goals and requirements. In the case of MBX, they had distinct P&L goals for each brand as well as requirements around sell-through-rate and competitive positioning for certain hero SKUs.
“We were aiming to push some of our products to achieve #1 in the best seller category. While it is important for us to maintain and increase our profitability over time, we also have to make sure that we do not compromise on the sales volume by unit. We needed a price plan that could hit two birds with one stone!” - Lynn Chim
To improve margins while respecting all of MBX’s requirements,, Luca’s AI-powered pricing engine broke up the problem into four distinct parts –
At the end of the observation period, MBX had not only hit its profitability goals with a 19% profit uplift but also observed top-line growth as well with 4.4% revenue uplift.
If you’re interested in revamping your pricing strategy on any channel you sell on, book a call with us to chat about how Luca can help!