Beauty of THis Business Is More Than Skin Deep
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The skins feature professional sports team logos, university logos, comic characters or photographs submitted by customers. "Skinit is a market maker for new products and materials and is exposing 3M to new market opportunities outside traditional graphics applications," Tom Black, marketing operations manager for 3M, said in a news release.
With a shipbuilder, military aircraft builder and a passel of electronics assemblers, manufacturing hangs on in San Diego.
But hiding in the shadows is a surprise - a maker of consumer products that is not only thriving, but growing rapidly.
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Skint specializes in adhesive vinyl skins for personal electronics such as cell phones and laptop computers. The skins feature professional sports team logos, university logos, comic characters or photographs submitted by customers. Applying a skin gives a custom feel to mass-market electronic products.
The business had $10.2 million in sales in 2007, and expects to increase that by 30 percent to 40 percent this year, CEO Paul Buss says.
With its specialty in custom orders and next-day shipping, Skinit is better located in the U.S. instead of China, Buss says.
In September, Skinit achieved the No. 27 spot on the Business Journal's 2008 list of the 100 Fastest-Growing Private Companies. It earned that distinction by turning in 138 percent revenue growth between 2005 and 2007. Revenue in 2005 was $4.3 million.
Actually, Buss says the Business Journal ranking doesn't tell the whole story. Video games, its previous business, generated all of the revenues. Sales the next year came from a mix of sources, and 2007 revenue came entirely from skins.
Changing Focus To Grow
The company started life in late 2003 as Global Wireless Entertainment. Its emphasis was video games, licensing names of sports figures, including boxer Muhammad Ali, hockey player Wayne Gretzky and soccer great Pele. The company built the games and got them to market.
But bigger players such as Electronic Arts posed a threat. "We realized it was going to be very tough for the small guy to survive," Buss said.
Midway through 2005, one of Buss' employees told him of friends in Colorado. They were three brothers, and they had a business called Skinit. At the time, they were customizing consumer electronics with skins such as leopard prints.
While unimpressed with the leopard spots, one skin caught Buss' eye: A "Margaritaville" theme that called to mind the Jimmy Buffett tune. That had potential, he thought.
Buss and company invested in Skinit in 2005, when the company had $900,000 in revenue. By the first quarter of 2006, Buss and friends had bought Skinit for an undisclosed amount of cash and stock. By June 2007, Skinit had a factory in San Diego, where Buss and fellow employees preferred to stay.
Lessons Of The Past
Building on the foundation of Global Wireless Entertainment gave the company a leg up in a crucial area. Its management learned how to negotiate licenses with movie studios, colleges and major league sports teams. Skinit's first owners had no such experience. Once in new hands, the company quietly made a "license grab" before coming out with new lines of skins, Buss says.
Today, the company has 46 employees and 15,000 square feet in Mira Mesa. It's working to lease more space next door. The factory uses few employees and relies heavily on software to get the custom orders ganged together through specialized printers and cutters, then into the package for shipping.
Online competitors include DecaGril. com, Schtickers.com, Getyourskins.com and Designerskins.com. Computer maker and online retailer Hewlett-Packard, among many other consumer product companies, offers Skinit products at its Web site, HP.com.
Recently, Skinit teamed up with cell phone carrier T-Mobile to print custom logos directly on handset shells. While skins are the equivalent of after-market auto parts - you apply them yourself - the T-Mobile deal offers customers a factory-finished custom shell.
T-Mobile and Skinit put their heads together to attack the problem of the custom finish, says Darrin Hegemier, Skinit co-founder and head of business development. Now, Skinit is T-Mobile's personalization agency. Both parties are looking to drive T-Mobile sales.
Another new area for Skinit is large-format graphics - including 4-foot-high cutouts of actors from Disney's "High School Musical" movies.
3M makes the adhesive film used for the skins and large-format graphics.
"Skinit is a market maker for new products and materials and is exposing 3M to new market opportunities outside traditional graphics applications," Tom Black, marketing operations manager for 3M, said in a news release. "3M Graphics Market Center is excited about our relationship with Skinit and the growth potential that we are addressing in the consumer device personalization market. We are proud to put the Scotchprint graphics brand on high-quality products such as Skinit's Skins."
And while it would be an overstatement to say Skinit could help lift the Dow, the San Diego company might offer at least some food for thought: A lesson in adapting to survive.