It’s highly unlikely that any pharmaceutical company would give Peter Nicolas a job!
He rarely gets out of bed before 11:00 a.m.
He seldom visits his office — and when he does, his only brush with any activity that even resembles work is a noisy tour of his troops, exchanging high-fives and boasting of market victories to come.
He’s loud, opinionated and confrontational — with the attention span of an agitated gnat.
And he leads a lifestyle so decadent that few rock stars would be capable of keeping up!
But Peter isn’t in the market for a job.
The fact is, he’s preoccupied with Naturopathica, a $20 million a year pharmaceutical business he’s built from the ashes of a previous venture!
If the fact that a man with Peter’s unusual work ethic can build a $20 million business surprises you, what you’re likely to find all the more remarkable is that Peter Nicolas only launched Naturopathica two years ago!
Peter’s wild lifestyle has been surpassed only by his business career’s wild ride from poverty to success and back again, followed by his recent meteoric rise to riches.
At JRMA, we’re proud to have shared this eventful journey with Peter, his long-suffering business partner, Sonia, and their team.
Along the way, we’ve learned business lessons we could never have learned elsewhere — and we like to think we’ve made at least some contribution to Peter’s success.
Down but not out
When Justin Roff-Marsh first met Peter, he had only two valued possessions — his telephone account (both the electricity and the gas had been disconnected from his dilapidated Surrey Hills terrace house), and his sizeable library of direct mail books and magazines.
Peter and Sonia had acquired a taste for direct mail from their first business venture. They had been selling ‘little black dresses’ from full-page advertisements in a popular women’s magazine. When the magazine decided they wanted to dissolve their joint-venture arrangement and take the business in-house, Peter and Sonia were left looking for another business opportunity.
Peter was spending his afternoons devouring every direct mail publication he could find, and every night he would sit on the phone to the United States speaking to anyone who was anyone in the direct mail industry.
It wasn’t long before Peter approached Justin with details of a product he claimed was destined to reverse his fortunes. Justin was more than a little concerned when he discovered that Peter was planning on risking money he didn’t have on an advertisement for, of all things, grass seed!
Grass seed grows into multi-million dollar mail order business
Despite Peter’s assurances that CanadaGreen was no ordinary grass seed, Justin remained unconvinced. He could understand why CanadaGreen was popular in Canada (where much of the country is buried under snow for months each year), but he just wasn’t convinced that Australians would be prepared to purchase any kind of grass seed by mail order — particularly at $39 a bag!
Peter’s convictions couldn’t be swayed. Justin agreed to let our team create a mail order advertisement for him, as Peter went about convincing Sydney’s Sun Herald to extend him $11,000 credit for a half-page advertisement in its television supplement.
Fortunately, this first advertisement exceeded even Peter’s wildest expectations. By lunchtime on the Sunday that first advertisement appeared, Peter had sold $47,000 worth of grass seed. He was now officially in business!
Peter wasted no time purchasing space in television supplements and women’s magazines around Australia. And he immediately converted our print advertisement into a two-minute television ‘infomercial’.
Within four months, Peter and Sonia had turned their half-page grass advertisement into a $150,000 a month mail order business. Peter followed the success of CanadaGreen with a bevy of similarly innovative garden, household and personal products, and in the process built his annualised sales to above $5 million.
The mail order business can be a bit like the property development business. If you want to grow fast (and in order to survive, you need to) you invariably gamble your entire business on each project.
When Peter ‘rolled the dice’ on an electronic pest eliminator it looked as though he was destined to win big. This product seemed to hit a nerve with frustrated consumers who were eager to rid their homes of rats, mice, cockroaches and other crawling nasties.
His initial advertising campaign set his phones ringing as they’d never rung before. Peter had limited stock, but he knew that if he didn’t keep advertising, there was a danger that a competitor would buy-up the limited media and mine the rich vein he’d exposed.
Peter’s US suppliers promised to airlift product to him as it rolled off the assembly line — but it never arrived. Still, the orders tumbled in and customers became outraged when their orders failed to materialise.
Peter held off requests for refunds for as long as possible by offering customers credit vouchers as compensation for their late orders. But when it became clear that the product that Peter had ordered (and paid for) was never going to arrive, he had to begin writing refund cheques.
After issuing tens of thousands of dollars’ worth of refund cheques each day for almost three months, Peter’s business was insolvent. He narrowly escaped bankruptcy by convincing his largest creditors to excuse his debts in return for an assurance that he would place his business with them when he bounced back. By this stage, none of Peter’s creditors (ourselves included) had any doubt that Peter would rise from the ashes of his failed business.
New paradigm: new business model
Peter’s new business combined his talent for picking winning products, with his direct marketing expertise, along with a new ingredient — retail distribution.
A post-mortem of Peter’s failed business revealed that his most profitable products could be characterised as ‘ailment-specific skincare and nutricutical products’.
Products like VeinAway, HairNoMore and ProSlim had been consistent performers. Even with no advertisements on television, Peter was receiving a constant stream of telephone calls from customers, asking if they could re-order.
Peter was also receiving hundreds of telephone calls each month from pharmacists, asking if they could stock his products.
These telephone calls helped to crystallise Peter’s thinking. He resolved to start a pharmaceutical company, specialising in ailment-specific natural remedies. He would use mail order to ‘make a market’ for his products and then extend the life of these products by distributing them through pharmacies.
Onwards and upwards
This year, as mentioned previously, Peter and Sonia’s new business, Naturopathica, will do $20 million dollars in sales.
But as well as a strong cashflow, Naturopathica has a strong balance sheet. Its assets include its brands (it has more than 20 brands — including the best-selling Menoeze, which is endorsed by Rowena Wallace), and its distribution network (Naturopathica’s products are now available from almost every pharmacy in Australia and New Zealand).
Peter’s new business model is as effective as it’s unique.
Most pharmaceutical companies wouldn’t dare to sell direct for fear of disenfranchising their reseller network. However, Peter’s pharmacy clients understand that his direct sales activity finances the enormous cost involved in ‘making the market’ for new products.
And rather than providing pharmacists with line-extension after line-extension (each of which consumes valuable retail space and diminishes the return on originally successful brands), Peter delights pharmacists with best-selling brand after best-selling brand.
Furthermore, all of Peter’s products are supported by powerful point-of-sale campaigns — and, of course, with the spin-off benefit of his newspaper, magazine and television advertising.
Recently, we suggested to Peter that we build an ecommerce-enabled Website to complement both his mail order and his retail distribution channels.
Within weeks of its launch, this site (www.naturopathica.com.au) was generating over $50,000 a month in sales. Naturopathica’s online presence is styled after Amazon.com — with strong emphasis on cross-selling between related products.
Australia’s largest ‘nutricuticals’ company
For a man who has long resisted traditional business practices, his business is now looking surprisingly business-like!
Naturopathica now has a staff of 45. It has its own warehouse (although Peter recently admitted that he has no idea where it is!) And it even has a General Manager (thank goodness).
Peter is obsessed about building Naturopathica into Australia’s largest ‘nutricuticals’ company. He conceptualises new products daily, he motivates his UK- and South African-based employees with telephone calls from outside Kings Cross nightspots, and he argues regularly (and noisily) with Justin about the intricacies of his business model.
Peter might not have what it takes to get a job with any of his competitors, but he does have what it takes to build a serious business. He is driven. He has an uncanny understanding of what makes people tick. And he has absolutely no fear of failure.