Swiss Medica to Launch New USA Distribution Channel
TORONTO, Aug. 8 /PRNewswire-FirstCall/ -- Swiss Medica (OTC Bulletin Board: SWME) announced today that it will launch a new distribution strategy in the USA focused on direct-to-consumer selling and distribution via medical professionals. In addition, Swiss Medica has decided to strategically exit the working capital intensive USA national pharmacy channel that caused the bulk of Swiss Medica's recent operational and financial difficulties.
Swiss Medica launched O24 Pain Neutralizer and O24 Fibromyalgia in 2005 in national pharmacy chains in the USA, after a similar successful launch in Canada. Swiss Medica made a large investment in upfront inventory for the retailers in advance of the launch, spent several millions dollars on radio and other mainstream marketing in the USA and carried receivables from pharmacies for six months plus in most cases. Swiss Medica's unsuccessful experience with USA retailers were due to:
1) Mainstream short-form radio marketing that could not differentiate O24's superior efficacy and science from its competitors.
2) An overinvestment in inventory for re-orders that did not materialize
3) Predatory supplier practices of large pharmacies who charged large fees without approval, returned inventory that was damaged for full credit and had extremely slow payment processes for small manufacturers. Swiss Medica continues to pursue collections from its USA national pharmacy customers.
Swiss Medica recognized that the national pharmacy retail channel is not the most appropriate channel in the United States for O24 whose unique patent and clinical/medical trials need to be explained in detail in formats such as the 1 hour branded radio shows that were successful in Canada, but are not as available in the United States. In addition O24's efficacy can be best proven by using a towelette sample of O24.
The USA direct-to-consumer marketplace is the most developed and elaborate in the world, allowing manufacturers many means to bypass retailers and access consumers directly. Swiss Medica is working to launch the distribution of O24 with a major USA-based direct-to-consumer marketing organization which focuses on marketing products through mailing samples of products to the millions of customers in their database and then auto-shipping regular orders of products to customers who opt-into the re-order program. This company chose O24 after an extensive product due diligence process and has estimated that it can build a large regular direct order business for a private label O24 due to the extremely high efficacy and customer satisfaction after the use of a single compact O24 towelette. Another pain relief product distributed by the same company experienced initial demand that translated in several million dollars of annualized wholesale revenues to the manufacturer.
The direct-to-consumer channel is much more attractive to Swiss Medica due to lower investments in upfront inventory, better payment terms from direct- to-consumer marketing partners and no need to spend consumer marketing dollars in the United States.
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