Introduction Letter: LABC Application Kit 4. Once Approved. Dear Interested Candidate:

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1 Introduction Letter: Dear Interested Candidate: Congratulations on your completion of the LABC Application Process. You are now ready to open shop, so review the documents in this section to better prepare for this exciting event. You will also be receiving your Training and Operations Manuals, which include detailed information on set-up, opening, and day-to-day operations. ONCE APPROVED Checklist Guide for LABC Opening Product Order Move-in Checklist Photos of LABCs (Kiosks and Inline Stores) Thank you again for your interest in Licensing. We very much appreciate your support of Avon, and we look forward to the opportunity to partner with you as a Licensee for Avon Products, Inc. Let s Open Shop! Licensing Beauty Center Team Avon Products, Inc.

2 Checklist: Responsibility Pre-Opening Avon Licensee 1. LABC Training Materials (Operations, Training, and Real Estate Manuals, Training Video) 2. LABC Insurance (including Workmen s Comp, if applicable) (Some retail developers will assist or contact local insurance company) 3. Bank Account Set-up (On-Site Retail Developer Drop box) 4. Recruit Staff to cover LABC (schedule) (Licensee is responsible for staffing LABC) 5. Opening Order / Products (Approximately $7,500 order after 50% discount 120 days to pay Avon (50% payment due within first 60 days), based on 3 month minimum LABC lease cost of goods vary by campaign; Replenishment orders payment due within 2 campaigns (approx. 30 days)) 6. Opening Order / Samples 7. Opening Order / Collateral (bags, supplies) 8. Opening Order / Tester Displays, Merchandisers 9. Purchase Brochures for distribution at LABC 10. Telephone Purchase and Installation 11. Purchase or Rent / Set-up Cash Register or Point-Of-Sale System 12. Schedule Set-up with Retail Developer Contacts (time, entrance, dock) Staging of shipment receipts prior to set-up date (tester displays, merchandisers, chair, collateral) Installation date requirements (entrance, time, restrictions) 13. Storage Provisions (if necessary) 14. Schedule Staff for set-up date (minimum of 2) 15. Schedule Staff for first two weeks of business 16. Schedule / Participate in on-site training 17. Review Operations / Training Manual and Training Video with your staff (LABC Team - (888) ) 18. Prepare for retail selling environment by completing Phase I and Phase II of Avon s Beauty Advisor Program (Strongly suggested to promote success in retail business)

3 Checklist cont d.: Responsibility Opening Avon Licensee 1. Ship / Receive opening order of tester displays, merchandise, chair, and collateral 2. Ship / Receive opening order of products 3. Ship / Receive opening order of samples 4. Provide Opening Bank of $ Merchandise and Display Signage at LABC 6. Order Replenishment Procedures (same procedures as Representative; however, use LABC Acct #) 7. Review Selling Skills with staff Follow-Up 1. Field Management Visits

4 Guide for Opening LABC Order: Please use the Top 25 Products [both Avon and mark] lists, found on youravon.com at the LABC site, as a guide to assist you in writing your opening order for your LABC. The Avon list is by category and the mark list is brand-ranked based on national sales. A sample order and merchandising planogram can also be found on youravon.com at the LABC site. Of course, you do not have to order everything listed, and you can change quantities or flavors (i.e. bubble baths, fragrances, etc.) as you deem necessary for your market. You want to keep in mind the amount of space with which you have to feature your products give higher priced, top selling products premium location and the most amount of space for increased turnover of product and higher profits. Suggestion: You may want to order less quantities of each item until you ascertain which items will sell in your market, especially in brands with various color choices, i.e. lip wear, eyewear, etc. However, be sure to order enough of the items that you will have displayed on shelves (i.e. SSS, Anew, mark, etc.), so your LABC looks fully stocked for opening day. It is important to know that you can place your opening and replenishment orders using the current campaign and 2 previous campaigns. If an item in which you re interested in ordering is not shown in any of the 3 campaigns, please check the search engine under order section of YourAvon.com for product availability, just in case you can still order the same. As an LABC Owner, you get a 50% discount on all beauty products ordered through LABC Account. You will want to optimize your profit margin by taking full advantage of all increased discount opportunities, e.g. caselots, demos, stockups, direct ships, etc. This will allow for a higher profit margin as an LABC Owner. If you desire, your District Manager or the LABC Team will assist you by reviewing your opening order and he/she will share some suggestions. Another suggestion would be to contact some seasoned LABC Owners for advice since they are already living your dream of owning a Licensed Avon Beauty Center. *Reminder: Gift items that are licensed to Avon (i.e. Mattel Barbie, etc.) cannot be displayed on LABC. Avon does not have authorization from vendor to sell these items at retail. Please help protect our relationships with our vendors.

5 Guide for Opening LABC Order cont d.: Approved Product Categories For Retailing at LABC SKIN CARE For example: Anew, Brand Avon, Clear Skin, ProSport, ProExtreme, etc. SPRP: Anew = 20% over CDSS price (i.e. CDSS $20 = SPRP $24) Brand Avon and Clear Skin = 15% over CDSS price COLOR For example: Foundations, Powders, Lipwear, Eyewear, Nailwear, etc. SPRP: 10% over CDSS price FRAGRANCE For example: Far Away, Dreamlife, Today, Tomorrow, Always, Mesmerize for Men, Black Suede SPRP: 15% over CDSS price PERSONAL CARE For example: Skin-So-Soft, Planet Spa, Footworks, Moisture Therapy, Bubble Bath, Haircare, etc. SPRP: 15% over CDSS price WELLNESS For example: Planet Spa, Aromatherapy, Soothing Relief, VitAdvance, etc. SPRP: 20% over CDSS price mark Fun, hip, on-trend brand for the young attitude in all ages, which includes color, personal care, fragrance, skin care, jewelry, etc. SPRP: 10% over CDSS price GIFT ITEMS (Qtrly Promo. Calendar will feature approved select Gift Items) For example: Jewelry (if mall allows), Avon exclusives, etc. No clothing or licensed gift items (i.e. Mattel, Disney, etc.). SPRP: 20% over CDSS price SPRP Suggested Premium Retail Price. We suggest retailing Avon Products at SPRP to increase your opportunity for higher profit margin. In the premium retail environment, your consumer is accustomed to paying and expects quality product for a premium price. It is suggested that you round to the closest half dollar (.50) or dollar (.00) For example: CDSS $6.00 ($6 x 20% = $1.20) SPRP = $7 (round to closest dollar) or CDSS $8.00 ($8 x 20% = $1.60) SPRP = $9.50 (round to closest half dollar) CDSS Price of product in brochure when it s not on sale. Percentage (%) suggested above for SPRP is using CDSS price as base.

6 LICENSED AVON BEAUTY CENTERS MOVE-IN CHECKLIST LOCATION: Date Prepared: Prepared By: SHOPPING CENTER: STORE NUMBER: PRIMARY STREET / INTERSECTION: ADDRESS: CITY, STATE / ZIP: TARGET NO. ACTIVITY SCHEDULE DATE Completed 1. Documentation: Obtain move in letter confirming move date from landlord Obtain copy of lease from Galaxy Obtain move in instructions from landlord, if applicable Upon lease execution Upon lease execution Upon lease execution 2. Planning: Contact phone company to transfer / order service Contact utility companies to transfer / order electric service Hire moving company or make other arrangements to move furniture, equipment & materials Contact security company (e.g. ADT) to order security system Order exterior sign for store Obtain approval of sign specs. from landlord Contact landlord for approved sign contractor Notify local post office of move date and new address 3. Communications: Notify Avon of move date and new address Notify existing customers (if applicable) of new address/phone Notify landlord of new phone number 30 days prior to move 30 days prior to move At move in 4. Facility: Monitor buildout process with landlord (or contractor) Visit facility prior to move date to verify condition / status Verify working condition of all systems (heat, AC, plumbing, electrical) Contact landlord to understand parking & product delivery options Obtain keys from landlord Verify working condition of security system and test Continuously 1 week prior to move 1 week prior to move 1 week prior to move 1 week prior to move At move in 5. Other: 6/17/03 Galaxy Partners, Inc. LABC Location Analysis Form

7 Photos of LABCs (Kiosks and Inline Stores): Kiosks/Carts: Carmenmaria Angulo, Miami, FL Donna Feazell, Quintard Mall, Oxford, AL Marilyn Pineda, Katy Mills, Katy, TX

8 Photos of LABCs (Kiosks and Inline Stores): Inline Stores: Sue Eggers, Valley West Mall, West Des Moines, IA Linda Peters, Oglethorpe Mall, Savannah, GA Lori Cole, Gaston Mall, Gastonia, NC