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Why the founder of has a bad hangover to thank for his £20m cosmetics business

Beauty was never an industry I planned to go into. At the time, all my bathroom cabinet consisted of was a bottle of Head & Shoulders and a bar of Imperial Leather.

But in April 2005 I was in Dublin for business and found myself with a couple of hours to spare at the airport, with a terrible hangover. I was wandering around the cosmetics hall when a Clarins saleswoman grabbed me and somehow managed to sell me a tube of moisturiser. I was not the kind of guy that bought moisturiser at that point in time, but it actually felt quite nice. I got on the plane and thought: “Well, that was 20 quid well spent, but where am I going to buy it from next time?” Shopping in department stores can be quite intimidating for men, and then I had the lightbulb moment:  ‘We should sell beauty products online.'

My business partner Richard Schiessl and I spent the next three or four months researching the market. Encouragingly, we discovered that there was no household player in the online beauty space, and we saw an opportunity to become that household name.

We founded the company in June 2005 and launched the site in October using a mixture of ads on Google and Yahoo! plus listings on price comparison sites. We were spending huge amounts on advertising, which meant we were losing £5,000 a month for the first 18 months. Although we predicted this it was pretty scary. The business was initially funded by our savings: Richard and I put in £40,000 each in the form of a directors'  loan and took virtually no salary for the first two years.

We started trading with just 150-200 products and five or six brands. Richard and I did everything, from putting the products in boxes to answering the phone. Along the way we have had to make daring strategic decisions. We sold a share of the business to the Huggler Group, which owns a chain of hotels and spas in Jersey. Many of the brands we deal with today wouldn't use us unless we had our own spas, as it shows we have experts on the ground and are not just a big warehouse shipping products.

Letting go of equity was a tough decision, but we were both of the view that it is better to own 20% of something massive than 50% of nothing. If we wanted to become a household name then we had to acquire that physical presence and extend our relationship with the brands. Building and maintaining relationships with our suppliers has been one of the biggest challenges, as beauty brands are notoriously precious about where their products are sold. It took us four and a half years to convince Clarins we should sell their products.

The deal also provided access to capital, helping us grow. If we're not the biggest online beauty retailer in Europe now then we're neck and neck. But our goal is not to be the biggest, it's to become the household name. is now one of Europe's fastest growing online beauty retailers. Chatterley says the business is on course to make a £1.2m profit on a £20m turnover this year, while next year's turnover is projected to surpass £40m. Today, the business stocks around 12,000 products from almost 400 well-known beauty brands.

Aaron Chatterley was speaking to Kate Walters.


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