# Three Ships Financial Model Transparent, affordable natural skincare brand selling direct-to-consumer and via wholesale retail - Canonical: https://finamodel.com/startups/three-ships - Excel download: https://finamodel.com/startup-models/three-ships.xlsx - Category: Consumer/DTC - Model type: Unit-economics / DTC - Funding round: Seed - Founded: 2021 - Geography: Canada primary; US customers noted [DECK, slide 7]; retailers include US-based Target and Whole Foods [DECK, slide 8] - Customer: B2C ## About the company Three Ships is a transparent, affordable natural-skincare brand selling through DTC e-commerce and wholesale retail. It positions around simple ingredients and accessible clean beauty, with product efficacy and customer trust central to repeat-purchase behaviour. The Canadian company was raising a C$550,000 seed round and also serves US customers. Retail partners cited in its deck include Target and Whole Foods, so the plan must distinguish higher-margin owned e-commerce revenue from wholesale revenue shaped by trade margins and sell-through. The model builds beauty revenue by customers, repeat rate, AOV, retail doors, velocity, and SKU mix. COGS, fulfilment, retail margin, inventory, CAC, marketing, and new-product launches determine contribution margin, profitability, and the cash required for omnichannel growth. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Natural skincare product line including: Radiance, Calm, Nourish (Lavender + MCT Cleansing Oil), Glow, Purify (Aloe + Amino Acid Cleanser), Detox (Green Tea Antioxidant Clay Mask) - Differentiation on three pillars: 1. Formulation Transparency - full ingredient glossary online (source, scientific benefit, product listing); exceeds EU standards 2. Forever Affordable - no filler ingredients; every cent to formulation 3. Efficacy - "most transparent natural skincare brand on the market that works" - Target customer: ingredient-conscious women; 59% scan cosmetics for harmful ingredients before purchase ## Market - No explicit TAM/SAM/SOM figures in deck - Proxy market context: Median serum price at Sephora = $74 CAD; 33% of women won't buy without understanding ingredients - implies large addressable base for transparent alternatives ## Revenue model - Channels: 1. DTC e-commerce (implied primary - customer reviews reference direct purchases) 2. Wholesale / retail - physical and digital wholesalers: Hudson's Bay, Indigo, Whole Foods Market, Target, CAUSEBOX, IPSY - Pricing: Products positioned below Sephora median ($74 CAD for serums) as "forever affordable"; exact SKU pricing not in deck - Unit/volume: Launching into 600 new wholesale doors ## Traction & metrics - Wholesale pipeline: 600 new doors secured in last quarter; projected revenue >$1M CAD from wholesale deals - note this is projected, not historical - Customer reviews: US and Canadian customers cited (September–October 2020) - Historical revenue, order volumes, website traffic, DTC customer count, repeat purchase rate: Not in deck ## Unit economics - Use of funds allocation implies customer acquisition is the largest cost bucket at 43% of raise, suggesting CAC is a known lever - but no explicit CAC or LTV figures given ## Competition / moat - Competitive positioning: explicitly vs. "overpriced, greenwashed brands" - Moat claims: ingredient transparency (full online glossary exceeding EU standards), fair pricing, functional formulas ## Team & funding ask / use of funds - Founders: - Laura Burget - Co-Founder, Product Development & Operations; University of Toronto, Bachelor of Chemical Engineering, 2016 - Connie Lo - Co-Founder, Sales & Marketing; Queen's University, Bachelor of Commerce, 2015 - Funding ask: $550,000 CAD seed round - Use of funds: - Customer Acquisition: 43% (~$236,500 CAD) - Retail Marketing: 15% (~$82,500 CAD) - Staffing: 29% (~$159,500 CAD) - Working Capital: 12% (~$66,000 CAD) --- ## Recommended financial model - **Archetype + why:** DTC + Wholesale omnichannel CPG P&L. Revenue splits across two channels with different economics - DTC has higher gross margin but requires paid CAC; wholesale runs on trade margin/sellthrough. A combined channel P&L with inventory/COGS is the right structure for a physical product brand at this stage. - **Forecast horizon & granularity:** 3 years monthly (Year 1 monthly for cash management; Years 2–3 quarterly roll-up acceptable). Seed raise implies 18–24 months runway focus. - **Key drivers & assumptions:** - DTC revenue: SKU count × average order value (AOV) × monthly orders - Wholesale revenue: Doors × sell-in volume per door × average unit selling price - DTC gross margin - Wholesale gross margin - CAC (DTC) - Staffing cost: $159,500 CAD from raise; incremental hires beyond raise - Working capital / inventory build: $66,000 CAD from raise; inventory turns - Retail marketing spend: $82,500 CAD - Reorder/repeat rate - Revenue growth post-seed - **Scenarios (Base / Bull / Bear - which variables flex):** - Bear: Wholesale sellthrough underperforms (doors don't reorder), DTC CAC elevated, gross margin compressed by COGS inflation - Base: 600 doors ramp over 6 months, DTC grows proportionally with CAC budget, margins hold - Bull: Wholesale retailers expand door count / reorder velocity, DTC organic/word-of-mouth reduces blended CAC, additional SKU launches - **Required sheets / outputs:** 1. Assumptions - all drivers, CAD currency, toggle scenarios 2. Revenue - DTC channel and Wholesale channel split 3. P&L (Income Statement) - Revenue, COGS, Gross Profit, Operating Expenses (CAC, Retail Marketing, Staffing, G&A) 4. Cash Flow - operating cash burn vs. raise proceeds; runway 5. Use of Funds - allocation waterfall matching deck (43/15/29/12 split) 6. Dashboard - monthly burn, channel revenue mix, gross margin %, door count ramp ## Frequently asked questions ### Is the Three Ships financial model free? Yes. The Three Ships model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.