exCel Cosmeceuticals, Inc.

Presented by: Martin Davidson President

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History

Company started 1998 with first patent issued March 2000. We received a second patent in 2002 with others pending. We sell anti-aging cosmetic products to the medical community (Dermatologists and Plastic Surgeons in about 32 countries) We have three full time employees and a few part time employees as needed.

~40% of our business is international.

Market

• Our market is the medical community and we are targeting doctor’s patients. (baby boomers that are looking to improve their skin).

• Internationally, we are after the same market. However, in some countries the market is different.

Products include

Professional strength products Anti-aging home use Full line of Home use products

International Markets

• We use distributors almost exclusively. Why?

• Regulatory issues. Products have to be registered. Existing distributors know how to get approvals. Some products may not be available. (i.e. Japan ) • Market understanding. They know their market better than I do. Business Plan is suggested.

Distributors Continued

• Labeling issues. Language issues. Communication can be a little problem.

• Your expenses are less but your profit is less too.

• Marketing and co-op campaigns.

• Once I select a distributor, I usually sign an exclusive contract. You must be cautious.

• Relationships are everything. You will be challenged by competing companies overseas.

Costs To Do Business Internationally

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Costs to do business Internationally

Registration process can be lengthy. Turkey took over a year. Professional organizations and U.S. Commerce department can help you understand what you need to complete (CTFA).

• Certificate of Free sale, BSE, or other fees are required for the paperwork. These can be several hundred dollars.

• Which products to sell? All or just some of them?

• SASO Register each product, Certificates of Free sale, Inspection fee for each order. Boxes labeled.

Costs to do business internationally

• You will need to send samples, marketing literature, documents. This can add up especially with shipping.

• Damaged or lost goods need to be replaced and shipping is again costly.

• Copying and Patent protection.

Costs of doing business Internationally

• Travel or entertainment. Depending on if you have to visit or if they come here, there are expenses to do this. I advise visiting your larger customers. It is worth the investment. You will be surprised how beneficial it will be.

• Study their culture.

• The U.S.Commerce Department has trade missions that are very reasonable.

How do you find distributors

• I think it is critical for a small business to have a relationship with the U.S. Commerce department. I use Anita Walker from Richard’s office. There are so many items available from the Government, I use only Anita as my source of information. • U.S. Department of Commerce has a program where they will find potential candidates for you. They will screen several and provide a short list for you to negotiate with. The cost to do this on your own is expensive.

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How do you find distributors

Trade Missions with the Commerce department. You fly out with the commerce department and they set up these appointments for you. You have a chance to meet these people face to face and better understand the market opportunity.

Market research is available. If you go online for this you could pay thousands for a report they have access to.

Trade shows done internationally at the U.S. booth.

How do you find distributors

• U.S. Commerce Department local meetings with foreign representatives from other countries. (George/Singapore and Egypt) • Assistance with foreign visits. Greece.

• Local seminars at little or no cost. (China) Patent protection.

Free PR

How do you find distributors?

Other ways

• Internet search • Trade shows (this is the best for us) I have used the Commerce department to check out the companies for verification.

• PR • Website

Internationally, once you are well known the word spreads and potential customers will come to you.

Shipping and Payment

We use a third party to ship. • 70% UPS • 15% Federal Express • 10 % Freight forwarder • 5% DHL • I do not use the U.S. postal service. Too many problems with tracking and reaching anyone if you have a question.

• Insurance?

Payment

• Wire Transfer • Letter of Credit (expensive and takes time) • Credit card. Be Careful!

• Be careful of credit. Especially internationally. We establish a credit period before we will even consider doing this. Our orders are typically small and they order every month or two.

Thank You exCel Cosmeceuticals, Inc 4120 W. Maple Bloomfield Hills, Michigan 48301 www.xlafa.com