Stowaway Cosmetics

Stowaway Cosmetics is our investment in the direct-to-consumer cosmetics space.

When I first read the company’s pitch that they’d be producing smaller cosmetics products for women with an active lifestyle, I immediately thought of my wife. I had noticed that she carried around a very large bag simply to have enough space to store all her lipstick, mascara, and other cosmetic products. And even with a bag this large, she still wasn’t able to find the products she was looking for. I asked her if she would use Stowaway’s right-size products and the answer was a resounding yes.

As I dug deeper on a call with the founders Julie Fredrickson and Chelsa Crowley, I learned that there were two other ways in which Stowaway differentiates itself from traditional cosmetics producers.

The first is that Stowaway’s direct-to-consumer e-commerce sales model avoids offline retail costs. This allows Stowaway to pass on these cost savings to its customers while still managing to keep a healthy margin for itself.

Second, the majority of the cost of producing a cosmetics product lies in the packaging, not the fill of the actual product. The cost of producing a large product is therefore not much different than the cost of producing a smaller one, and this encourages brands to sell larger products because this allows them to charge customers who are unaware of this fact higher prices. A traditional brand’s margin is Stowaway’s opportunity.

Although each of these market realities and the resulting strategic decisions which Stowaway has taken make sense on paper, the company’s ultimate success will be determined by its ability to build a very strong brand. And this comes from delighting customers.

If the review below is any guide, Stowaway seems to be on the right track.