Kiflab: How a small business managed to become a bestseller at Lilly Drogerie

Today, we’re going to dive into the world of cosmetics and tell you how a micro business managed to turn its product into a best-seller at the checkout at Lilly Drogerie. And this is no ordinary product, but a healthy gourmet cosmetic that smells delicious and is conquering more and more markets.

The story of Kiflab started as a student project to defend the master’s degree of two young entrepreneurs in France but with a lot of effort and ambition it managed to reach one of the biggest retail chains in Eastern Europe.

In this blog post, we will not only reveal to you the difficulties faced by small businesses but also the path that Kiflab is taking, how it is adapting to modern trends and how myPOS’ innovative solutions are helping the company reach more customers.

From student project to successful business

Meet Radoslav Yotov and Sofia Manafova – the people behind Kiflab. The two entrepreneurs went to France and enrolled in a Master’s degree at the Université de Nantes, specialising in Business Administration and Management. To defend their diploma, they had to develop a real business project to present at the university.

At first, their idea was different, but after graduation, they both decided they didn’t want their project to remain on paper so Kiflab was born. The name Kiflab was inspired by the French word “kif”, which comes from Arabic and means pleasure. Not only does it fit the company’s concept, but the name is also suitable for catching the attention of the French and Arabic markets.

In 2017, Radoslav and Sofia registered their company and started working hard on the product portfolio, although they both work in different places, far away from the field in which their brand was developed. Thanks to this dedication in their spare time, just one year later their best-selling product, namely the gourmet lip balm, became a reality.

The packaging of the balms reminds of the French macaron – a sweet delight that captivates with its subtle sweet taste, as well as the variety of colours and aromas. Kiflab produces a rich range of balms to satisfy both fruit flavour enthusiasts and those with sweeter preferences.

Inspired by French sophistication, Kiflab became the first gourmet cosmetics laboratory. Its gourmet concept is that each product should not only smell good but also be beneficial to the skin.

Due to the increased demand for natural products and the brand concept, the products are entirely based on natural ingredients. The chosen ingredients owe their quality to Sofia, a chemist by education with a specialisation in white cosmetics.

Promoting small business

To introduce customers to their product and give them a chance to experience it firsthand, Radoslav and Sofia attended various festivals and events. Interest was growing rapidly and so was the desire for future development and reaching a larger customer base.

But like any venture, Kiflab faced several challenges on its road to success. One of the main issues they share is funding. As a small business, accessing investment is difficult as most banks and financial institutions offer binding long-term contracts as well as numerous fees and commissions. In addition, the application processes and conditions that companies must meet further complicate the process.

In such cases, the business is placed in a situation where it must fend for itself and the owners should invest personal funds to protect themselves from unfavourable conditions and take on significant risks. Kiflab is no exception and entirely funds its initiatives with the personal funds of the owners.

The two entrepreneurs reveal that this issue proved to be a significant challenge not only in starting a business but also when seeking market expansion and establishing partnerships with retail chains such as Lilly Drogerie. One of the reasons is that entering a new market entails numerous expenses such as documentation and legalisation, most of which must be covered by them.

And while in most cases businesses focus on servicing their current expenses, steps for market expansion must be well-planned. Challenges arise from the fact that large retailers do not always fully finance their partnerships with small businesses and expect immediate payments. On the other hand, startups seek deferred payments to meet their daily needs. According to Radoslav and Sofia, strategic thinking, well-organised planning, and negotiations for better terms and deferred payments with Lilly Drogerie played a key role in Kiflab’s success.

How to reach Lilly Drogerie

Kiflab is one of the few Eastern European brands that can boast about its presence in the retail chain. However, the path to get there was not easy and didn’t involve just a dash of luck, but rather a lot of effort and hard work.

The owners revealed that negotiations for contract agreements are a complex process that requires time and energy.

“At the beginning, we made many attempts to reach out to various retail chains, as our goal is to reach as many people as possible who can buy products with an attractive design at a very good quality-to-price ratio. So, after several unsuccessful attempts to catch their attention, in July 2022, Lilly Drogerie reached out to us,” shares Radoslav.

The company began negotiating terms, and just a few months later, in November 2022, was able to sign a final contract to sell the lip balms at the chain’s checkout area. The owners say that Lilly Drogerie’s initial intentions were to restock a few boxes a month, but interest grew significantly and by December all stock from the initial shipment was sold out.

“When we received a call from Lilly Drogerie’s management to ask why we hadn’t anticipated a delivery of triple the quantity, we realised that all the difficulties we had gone through had been worth it. It was a sure sign to us that people really appreciated our product and the work behind it.”

Kiflab’s lip balms became one of Lilly Drogerie’s top sellers at checkout, as well as one of the best-selling balms for the past 2023, the owners share. The company can boast of over 30,000 lip balms sold, delivering an average of one pallet at this stage to meet demand across all 120 of the drugstore’s stores nationwide.

The owners have told us that they are working hard on expanding the product portfolio this year and are expected to launch a hand, body and foot yoghurt very soon which will be a multi-purpose hydration product. But that’s not all.

Thanks to its success last year, Kiflab has received good references and started negotiations to enter markets such as Serbia and Greece, again in partnership with Lilly Drogerie for the respective countries.

myPOS: Services benefiting small businesses

Radoslav and Sofia share that when they started their business in 2018, card machine payments were not as popular and banks did not offer flexible terms. After exploring options, they came across myPOS and decided to purchase their first card machine to use at events and festivals they attended.

“myPOS won us over with its flexible terms and the favourable prices it offered. Everything happened quickly and easily, and the best part was that we went through the registration process entirely remotely – from applying to signing the contract,” says Radoslav.

In addition to the terms, the two owners reveal that they remain extremely pleased with the new services that myPOS adds each year, such as QR code payments and the Payment Request service. This is why they subsequently transferred all their payment operations to the fintech company and limited the use of conventional banks. Kiflab integrated myPOS online checkout, ensuring reliable and secure completion of purchases for every customer with a virtual POS card machine.

“Zero monthly fees and instant access to funds received immediately after payment are key for a small business. Also, the ability to receive daily or monthly statements for business card and terminal transactions makes accounting much easier,” says Sofia.

Kiflab’s story shows that everyone has a chance to realise their ideas and reach new markets, even with limited resources. Of course, collaborating with partners like myPOS can make a decisive impact on the growth and development process by providing innovative payment solutions and facilitating business operations.