ZA
There is a gap in the market for affordable consumer first aid kits due to the fact that medical consumables retail at a significant mark-up to cost at mainstream retailers such as Clicks and Dischem. We wanted to make it cheaper so that people would be incentivised to buy it more, use cheap disposable packaging and a 1 colour print on packaging design to keep the cost as low as possible.
We will be creating two first aid kits for the home: cuts and grazes kit and a burn kit and of course if you want you can combine the two into a cuts, grazes and burn kit.
I will also give you some history on the project to give you some project development ideas to assemble your own.
First and foremost. Our main cost-cutting strategy was to use cheap disposable packaging. We had studied the packaging food was packed in as we knew it had to be cheap. The thing is this: if people want a bag they can use our kits as a refill and get their own bag or use an existing bag they have or repurpose a bag such as a pencil case etc.
We got our packing inspiration from food containers. ©The Food Fix
We had researched & immersed ourselves fully, researched all our competitors and their product offering including buying their kits to see the quality; remember outside of regulated you can create your own kits and call it whatever you like: mini, home, travel, vehicle, burn etc.
When we first did our market research for this product in 2019 Clicks had the following entry-level first aid kits both packed in a sturdy little container:
Mini cuts and grazes kit: R59.99
Mini burns kit: R59.99
Cuts & Grazes Kit
The Clicks mini cuts and grazes kit contained the following:
2x waterproof plasters
1x surgical paper tape
1x N/S gauze 75x75 (5's)
1x first aid dressing
2x alcohol-free wipes
1x water ampule
2x fabric plasters
1x pair of gloves
We are currently (updated March 2024) able to assemble a similar kit with better value for only R9.78 vat included:
Here is an image of the kit.
Members can access high-resolution watermark-free images from the Sourcing section if they want to copy the same configuration.
Burn Kit
The Clicks burn kit contained the following:
1x burnshield digit dressing
1x 12mm plastic coated tape
2x burnshield burn blotts
2x waterproof plasters
Our burn kit contains the following and can be assembled for R18.19 minus the burn gel:
* The burn gel is not sold by the same supplier, they only have a burn dressing. The burn gel is usually the 3.5ml "Burnshield Burn Blott" sachet. They currently (March 2024) sell those sachets at a minimum order of 2400 at a unit price of R1.73 (R1.50 ex vat) that means you need to outlay R4140 for a single item, you have three choices: buy it, buy from a middleman for R4.85 each (1, 2), have a group buy where you split it with others or leave it off. It is a hydrogel to help cool and soothe burns, but that little (3.5ml) and as an alternative to streaming water is it really needed?
As you can see we have validated that there was a significant margin, the main difference was that Clicks had a study re-usable container and we were going to use disposable containers. Based on that logic you could use our kits as a "refill" and put it in a another bag like a pencil case even.
Product Mix
We had initially produced four first aid kits for the home: micro (Recommended Retail: R10), small (RR: R15), medium (RR: R30) and large (RR: R50). As we continued to develop the product (don’t spend too time much on theory), we then realised we could not maintain the volume-based razor thin margins. Packing was taking too long, packaging materials was taking too long to source meaning we had to buy it inflated from middlemen, labour is not cheap and doing business in SA is not easy, then there was a glove shortage causing prices to skyrocket (which is why we say you need to understand supply and demand), and one component from the burn kit was not available from our main supplier. In our opinion such a business model can only be supported when sourcing direct from China complete.
We then redeveloped the product list to be more “modular” (so they could be combined to create one comprehensive one - what I mean by this is that the family kit is actually a combination of the four) as follows:
Cuts & Grazes Kit
Burn Kit
Bandage Kit
Equipment Kit
Family (First Aid) Kit
We we cut the home product line down to only three. Cuts & grazes, burn & family. Removed the bandage and equipment kits as seperate products and disposed of what we had in a surplus & salvage channel. I guess the average person don't have a need for a whole set of bandages.
The family first aid kit could be sold with a cabinet as a “medicine cabinet kit” which I will also look at as another opportunity.
We also had two business-focussed first aid kits: a regulation 3 and regulation 5 which I will look at as a separate opportunity as well.
Good Deal
Cuts & Grazes Kit
| Our QTY | Our Name | Code | Product Description | Minimum order | Price |
|---|---|---|---|---|---|
| 4 | Plasters | 100 | |||
| 4 | Alcohol wipes | Box of 200 | |||
| 1 | Gauze Swabs, 50x50 (5's) | 50 | |||
| 1 | Paper Tape | 24 | |||
| 1 | No. 2 First Aid Dressing | 10 | |||
| 1 | No. 3 First Aid Dressing | 10 | |||
| 2 | Latex Gloves (Pair) | 10 | |||
| 1 | * Cotton Wool (4's) | 1 pack of 40 | |||
| 1 | * Cotton Bud (5's) | MOQ: 50 (of 100) |
We made up our own cotton wool and cotton buds packs using 80x100mm plastic plastic ziplock bags (PFP1U1SE80X100) from Proficient Packaging that has a MOQ of 100 x 10 that cost a few cents per bag (currently R97 ex vat per 1000 so budget around 11c per bag, you can also buy these bags from places that sell plastic wares per 100 but it will cost more) so that has to be factored in if you want to do the same.
Here is that table again of total cost per kit. I have rounded up fractions of a cent:
Before I continue to burn kit. You need your mathematics now. When assembling first aid kits, you will encouter a "problem" relating to the lop-sided nature of minimum quantity vs. what is required and need to know how to order especially if you don't have a lot of capital. Because you need to be able to manage the minimum quantity and be able to know how many kits you will get out. Either you work out from the beginning what you will need for 100 or 1000 kits and order accordingly or just reorder what you need. I say this because some contents has very high minimum order. Plasters is 100 boxes of 100 (10 000 plasters) in other words you need to buy R1353 ex vat worth of plasters alone. That means an order of plasters will be enough to get you 2500 cuts and grazes kits.
Let me create a table to illustrate the problem in a simple way:
In other words if you buy minimum of all you will you need to outlay R2525.38 but you will only be able to produce 10 cuts and grazes kits before you start running out of first aid dressings and cotton balls. Based on the table above you can already see once you get the large MOQ out of the way and the maths on the others is fairly simple. You can now easily calculate what you will need for 100 kits etc.
Burn Kit
| Our QTY | Our Name | Code | Product Description | Minimum order | Price |
|---|---|---|---|---|---|
| 1 | Burn Dressing | 10 | |||
| 1 | Conforming bandage 75mm | 10 | |||
| 1 | Paper tape | 24 | |||
| 2 | Plasters | 100 | |||
| 2 | Latex gloves | 10 |
Here is the burn kit table of total cost per kit:
Packaging
Because packaging is a pivotal part of the first aid kit. We spent a lot of time on it we looked at all the clamshell designs. Early on we liked a certain shape that was actually used to package cake slices as well as the "clamshell wrap punnet" used to package food wraps but it was a wierd shape and couldn't stack nice when packing. The one we used was around 15cm wide foldover. The problem is that the supplier Zibo Containers no longer sells to the public (they have a minimum order of R30 000) and want you to deal with their distributors who sell the pack sizes like they used to (500, 400, 300, 100, etc.), and those distributors all use their own codes. For example, at Africa Packaging, the T574, the popular brownie container is called the "F38 FOLDOVER," while other places call it a "clear rectangular clamshell." So just try to get a 15cm/150mm clear foldover from your nearest Zibo distributor or use the T574. You can call them and ask for a distributor close to you.
This is how the burn kit looks before label is added. I had wanted initially wanted to use two different size containers for the cuts and grazes cut and burn kit but decided to use one.
If you want to go very cheap you can just use plastic bags:
Packaging Design
All our packing was a minimalist one colour design using a halftone to create a watermark effect. Depending on your volume, you can outsource this to a litho shop. We were running some of our labels on a HP colour laser and some on a Zebra label printer using a blue ribbon. This is not really the design, I'm recreating it using BusinessOpportunities.co.za logo but that is the format it took. The company icon with kit name. Remember we were selling to resellers and we did not want to put the company name where they could be "bypassed". If you selling retail you should probably put your company name on and not just an icon.
And each kit had a packaging insert with the contents of the kit. This is the final cost relating to assembling the kit to be factored in.
* For packaging purposes we mention one pair of gloves (2) but for record keeping purposes we mention as 2, because a box has 100 gloves in and we work on a cost per glove.
Resources
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Selling
The biggest challenge in this market is selling. People don’t just go out and decide to buy a first aid kit. This opportunity will not work via a passive channel, if you are a low-effort entrepreneur pass. If you don't know sales pass. If you can't sell pass. If you unwilling to knock on door pass. You need to get it in front of them, now if you can’t get it into retail then you need to have a direct approach. On a limited trial our most successful was via people who sell stuff from home. If you are selling direct-to-consumer (as opposed to wholesale) you should try to put one in every home, in every shebeen in every taxi etc. While we had initially wanted to sell this online via a marketplace channel like Takealot their fees are simply to high to maintain a low-price.
Business Model
This business buys from a low-cost medical importer, assembles and sells affordable first aid kits. Unlike mainstream suppliers it does not use sturdy expensive packaging but cheaper disposable packaging to keep the cost low. This packaging strategy while effective does sometimes have a bit of a turnaround time issue especially during fruit season as you share the same packaging supplier as farm produce. Another thing we did not consider when initially pricing was the time it takes to pack a first aid kit. You need to pack hundreds even thousands if you have razor-thin margins and we just weren’t equipped for it nor did we factor "packing cost" in the initial projections. Let me put it to you like this: the price you are paying the packer per hour needs to be divided by the number of kits they can pack in that same time and then added to the total.
Our plan was to buy components, assemble and wholesale, in a nutshell we described it like this:
Company Name has launched a range of affordable first aid kits, with the goal of putting a first aid kit in every home and business in South Africa.
For home use we have taken away the unimportant things that make first aid kits expensive such as plastic cases and canvas bags and packed a first aid kit with just the essentials.
For business we sell regulation 7 first aid kits in boxes at a cheap enough price that it can either be sold as a "refill" or you can add your own case you can source.
We decided against any stocking of first aid boxes but they are widely available from plastics manufacturers.
We were also going to supply our distributors with posters, "first aid kit here" stickers.
To summarise:
We are only taking two first aid kits to market here:
Cuts & Grazes Kit
Burn Kit
And they can be combined to create a Cuts, Grazes & Burn Kit (but this is not a distinct product from the above it is just those two kits combined).
Sourcing
Members will find the low-cost medical supplier below in the Good Deal section with the order numbers, minimum orders etc. They are based in Cape Town and ship nationwide. I have also included some unbranded high-resolution images.
If you have enough capital then you should probably be importing and probably importing already assembled direct from manufacturer. Our "many small businesses" aka "mini Bidvest" holding company rapid business models did not favour this approach due to its time delay and capital intensive nature. You also need to understand that this was a single product line of a niche consumer healthcare company that had other products and that was part of a larger holding company. We had a cap on the capital we deploy on a project basis and this was only part of a project.
