The beauty industry is on the rise, and there’s never been a better time to start a wholesale makeup business. Wholesalers from around the world are turning to the internet to build beauty brands of their own.
In this post, we are going to discuss how to sell wholesale makeup online. We’ll start by covering some of the basics of the wholesale beauty industry before we dive into the 8 steps that entrepreneurs can follow to start a wholesale makeup business of their own.
This year, many industries have sprung back to life after the chaos and uncertainty that they faced in 2020. The beauty industry is not only making a comeback, but it is propelling forward at a significant rate.
The beauty industry has grown from $483 billion to $511 billion in the past year. The industry is expected to grow to a whopping $784.6 billion by the year 2027.1 This sort of growth presents opportunities for aspiring entrepreneurs who want to start a wholesaling business of their own.
In addition to the impressive growth of the industry, the accessibility of the internet is making it easier than ever to get in on the action. Feature-rich B2B eCommerce platforms, like Alibaba.com, make it possible to reach buyers from around the world.
Starting a wholesale business in the makeup industry takes quite a bit of planning and preparation. When you’re creating an operation with a lot of moving parts, it is important to build a solid foundation.
Here are the steps that entrepreneurs can follow to start a wholesale makeup business.
Before you make any decisions or take any action for starting your online makeup business, it is a good idea to get familiar with the wholesale beauty industry.
Take some time to study industry trends. Learn how the industry has evolved, and assess the industry outlooks.
Compare popular brands in the wholesale beauty space. Identify what seems to be working and what is not. Look for any demands or deficits you can fill.
After you’ve done some research and developed a better understanding of the wholesale makeup industry, it is time to get to work. The next step is to identify your target audience.
As a wholesaler, you’ll likely be selling to makeup retailers. However, “retailers” are not specific enough since there are so many different types of retailers.
Here are a few questions to ask yourself as you determine who your target market will be.
Understanding who you want to sell to and who will benefit from your offer will help you as you build your wholesale makeup business. Most decisions you make moving forward will all tie back who your niche market is.
Now that you have a better idea of the target audience that you will serve, it is time to choose which products you'll offer.
There are different approaches that wholesalers take to choosing a product to sell. Some are passionate about a specific item, and some are simply interested in items that have proven profitable.
According to Alibaba.com’s Beauty & Personal Care Industry report, some of the top makeup products to sell in 2021 are liquid blush, liquid lipstick, lip gloss, glitter eye shadows, mink false lashes, and plant-based false lashes. Skincare products and fragrances also fall in the beauty category and present a lot of potential, as well.
What’s interesting about the cosmetic industry is that there are so many types of products and variations of products to choose from.
Let’s say you want to sell lipstick, for example. You can break this product down by:
This doesn’t even begin to get into lip balms, lip liners, lip serums, and other lip products.
It is a good idea to start small with one product or a small range of products. Doing too much too fast could get overwhelming. You can always incorporate new products down the road as you grow and scale your business.
Unless you are manufacturing your products in-house, you will need to find a supplier.
Alibaba.com is a great place to find suppliers.
Browsing product listings on Alibaba.com is easy. Simply enter the product that you’re looking for in the search bar at the top of the page. Once the results appear, you can filter them to narrow down your search. You can filter your results based on the supplier type, product type, minimum order quantity (MOQ), price range, and more.
You can reach out to different suppliers to learn more about rates, fulfillment processes, and such. We recommend requesting samples of products from different distributors and considering different offers before making a final decision.
Another way that you can find a supplier on Alibaba.com is by posting on the Request for Quotation (RFQ) platform. This feature allows you to make a post that explains what sort of cosmetic products you’re looking for so that suitable suppliers can reach out with a quote.
You can add details about the product you're looking for, the sourcing type, quantity needed, your budget, and more. This request is visible to over 175,000 active suppliers. You can get multiple quotes and compare offers to find the perfect match.
A warehouse is also very important for starting a wholesale cosmetics brand. It is important to choose a place that is centrally located within the region you plan to serve and large enough for your startup operations.
You can either rent or purchase a warehouse, depending on your needs and resources. Many wholesalers start by renting, especially if they have plans to grow or scale their business in the near future.
As we mentioned, there are many moving parts involved with building and operating a wholesale makeup business. This requires quite a bit of planning and preparation in different areas of the business.
Some specific details to take care of include:
We recommend documenting every decision you make. You can turn these notes into a business plan or company master sheet. This sort of documentation is essential in the event that someone has to take over the company in your absence.
Once all of the details are taken care of, it is time to start building out your online storefronts. Wholesalers can create storefronts on independent websites or an established eCommerce marketplace.
Each of these options comes with unique pros and cons. We recommend creating digital storefronts on both to take advantage of all the potential benefits.
For more information on deciding where to sell online, please check out our article that compares selling on eCommerce marketplaces and independent websites.
Once you have received your inventory and your online store is complete, it is time to launch your business.
While some businesses rely on the tools of an eCommerce marketplace to generate leads and make sales, it is smart to incorporate different sales channels.
If you are planning to keep things entirely online, social media platforms can come in handy for networking and connecting with buyers. Facebook, Instagram, and LinkedIn are some great places for connecting with other professionals.
Starting a business is one thing, but growing it into something profitable and scalable is another. Here are a few tips for maximizing your success in your online makeup business.
Customer service should be a priority from the moment that you launch your business.
Prioritizing customer service means being accessible and accommodating to every customer you serve. Make sure you give your customers the ability to voice their thoughts and opinions on your services and work hard to make every experience a good one.
There are several benefits to prioritizing customer service. First, it will help you retain customers. It can be expensive to generate leads and onboard new clients, so developing long-term relationships with your buyers is key.
Also, word of mouth is one of the best forms of advertising. When your customers are happy, they will create a buzz about your business. This will help you continue to generate leads and expand your clientele.
Wholesale prices are significantly lower than retail prices. To make transactions worth it and maximize their profits, many wholesalers put minimum order quantities in place.
You’ll have to crunch the numbers to see what MOQ works for your business. Once you have that number, we recommend increasing it by 20%. This way, you can have some flexibility when you negotiate with potential buyers. They will feel like they are getting preferential treatment, and you don’t have to worry about going in the red.
Similarly, some wholesalers use tiered pricing to accommodate buyers with different needs. For example, an order of 1-1000 units is one price, an order of 1001-2000 units would be priced a little lower, and an order of 2001+ units would be even cheaper than the second tier.
As you build your team, be highly selective about who you bring on board. Be sure to hire people who are reliable, trustworthy, and self-starters.
As you interview candidates, focus on those who have the same vision of customer service as you. Choose people who are passionate about getting the job done right, no matter how big or small a task might be.
Keep in mind that a chain is only as strong as its weakest link. The same idea applies to your team.
Investing in inventory software is one of the best hacks for managing a wholesale makeup company. This sort of tool will help you save a significant amount of time and avoid unnecessary human error.
Choose an inventory that integrates with your eCommerce marketplace or other business platforms to streamline your operations. Some of the best inventory software options include Cin7, NetSuite, and Brightpearl.
The process of starting and building a wholesale business can be a long one. You must stay focused and stay consistent if you want to see results. It will take some time to get things up and running, so make sure you continue to put your best foot forward.
Even after your business is off the ground, keep dedicating the same level of passion and effort. Don’t lose steam once you see the money rolling in, because that is still just the beginning.
A reliable B2B eCommerce marketplace can make a world of difference when you’re trying to get your wholesale cosmetics business off the ground. This sort of platform can help you find more leads, manage your customer relationships, and more.
Alibaba.com is a great option for wholesalers since it is one of the most widely trusted B2B eCommerce marketplaces in the world. There are currently 19 million active buyers on the platform.
Create an account on Alibaba.com to start selling your beauty products to retailers around the world. Our dedicated support team will help you set up your digital storefront, so you can start selling in no time at all.
Resources:
1: https://commonthreadco.com/blogs/coachs-corner/beauty-industry-cosmetics-marketing-ecommerce
As you establish your product business, you might think about selling your products wholesale and wonder how to sell wholesale as a small business.
When you sell wholesale, you sell your products at a lower price to a retailer or a third party, who then sells them directly to their customers.
Many product businesses sell directly to their customers, but depending on your circumstances, it might make sense for you to sell some, or all, of your products wholesale. This can allow you to sell more products and grow your brand quickly.
Read on to find out everything you need to know about selling your products wholesale, including what you need before you get started and where to find retailers.
To get started selling wholesale, you’ll need enough product in stock to sell to retailers. That means you need the capital to manufacture a large number of products so that you can have them on hand when a retailer needs them.
It’s important to remember that your retailer might not be as passionate about selling your products as you are. You’ll need well-designed packaging to help your products stand out among others on the shelves.
Finally, you will need an organization system in place for retailers to purchase your products. This should include barcodes for your products and a catalog or line sheet that retailers can use to purchase your products, along with an order form and written terms and conditions.
Selling to a retailer gives you the opportunity to sell your products in bulk and to get in front of new buyers. However, you’ll be operating on smaller profit margins than if you sell your products directly to customers.
In most cases, a good rule of thumb for setting your wholesale price is to figure out how much it costs for you to manufacture your product and multiply that by two.
For example, in the beauty industry, the wholesale price is typically 2-2.5 times the cost to manufacture your products. You would normally charge twice that if you sold directly to customers. So if you manufactured a product for $4, you would sell it for $8 or $10 to a wholesale buyer. If you were selling that same product directly to a customer, you would charge $20 or $25.
But it’s important to remember when thinking about how to sell wholesale as a small business that your wholesale pricing will depend on the typical retail price and the average profit margins within your industry.
When looking for retailers and distributors to work with, it’s very important for you to make sure that they’re a good fit before approaching them. It takes a lot of persistence and follow-up to form relationships with retailers, so you don’t want to waste time with someone who isn’t a good fit.
In general, a retailer is a good fit if they have similar branding to yours, attract a similar target audience, and sell products that will complement your own.
Large retailers typically pay on a net 60, meaning they have 60 days to pay you after receiving your products. Make sure you have the capital and inventory to wait that long—you still have to run your business in the meantime!
When working with smaller retailers, you might be able to negotiate better terms. They might be willing to pay you a deposit upfront, or to pay on a net 30 instead.
You can find retailers in many places, including:
You can also use Range Me, a platform used by Target, Ulta, and many other retailers. You can upload your brand and product information, and the participating retailers will choose whether or not they are interested in your products. If you pay to be a premium member, you can see when retailers are looking for new products and submit your products directly to them.
When approaching smaller boutiques or shops in your area, a great way to differentiate yourself is to come with an appealing display plan for your products. This will help them sell your products and will make your products more appealing.
Make a simple display that won’t take up much room in their shop. Your display should match your branding and have a cohesive look.
It’s also a good idea to create a display that can be reused no matter where you need to show off your products, from trade shows to retailers to craft shows.
Before approaching a retailer, do your research. Make sure that you know what types of products they sell, what their brand is like, what price points they generally sell to, and who their customers are, and their process for product submission.
Be ready to sell your products. What makes them a good fit for this retailer? How do they stand out from the competition?
Come prepared with a strong and well thought out sales pitch and incentives, such as free shipping or gifts. Be creative and find a way to stand out from the other businesses they talk to.
When thinking about how to sell wholesale as a small business, attending trade shows is one great way to get in front of distributors and retailers. You’ll get immediate feedback about your products, and be able to meet many retailers in person that you wouldn’t have access to otherwise.
However, trade-shows are a commitment in time and money. Most of them cost $2,000 and up to attend. You will also likely have to travel to them, and it takes a lot of work to prepare.
If you do decide to exhibit at trade shows, make sure that you are selective in choosing which ones to attend. If you can, attend a show first and then come back as an exhibitor once you’ve decided it’s a good fit.
Before you attend, make sure that you know your goals, that you come with the materials to make an appealing booth, and that you think about creating incentives for buying ahead of time. Bring a sample sheet with retail and wholesale prices to present to retailers.
Create a system for collecting information so that you are prepared to follow up afterward. Often, relationships are built in the follow-up even more than at the event, so make sure to set aside some time in the days after the trade show to follow up with the people you meet there.
Another great way to start selling wholesale is to work with sales reps and distributors or to display your products in showrooms. Sales reps and distributors understand how to get in front of retailers and will save you time in working with retailers directly.
Showrooms provide a venue for you to get in front of retailers as well. However, they do take a cut of the profit. Most sales reps, distributors, and showrooms are paid a 5% to 20% commission.
You can find sales reps and distributors by searching online, meeting them at trade shows, or calling stores to ask who they work with.
Another avenue, when thinking about how to sell wholesale as a small business, is home shopping channels, like the Home Shopping Network, QVC, and Evine. Before trying to get your products on these channels, make sure you have enough cash and inventory. You won’t get paid for your products until 30 days after they are sold.
Keep in mind that you have to do well the first time you sell. If you get bad reviews, you won’t get a second chance. Contracts with home shopping channels are typically not negotiable when it comes to the number of items sold, the return policy, and what time they feature your products.
Cold calling can feel daunting, but it’s a great way to find new business. The first step of cold calling is to call, email, or visit the store in person. If you reach someone, give them a sell sheet or catalog and an easy way to contact you.
If you don’t hear back after sending an email or leaving a message, follow up with another email or phone call.
Follow up is extremely important. Research shows that only 2% of sales are made the first time someone is contacted. In other words, you will most likely make sales by following up, and not in your first call.
Don’t assume that a lack of response means they are not interested. People are often busy and may have overlooked your message. Be persistent and only stop following up when it’s clear they’re not interested.
When you are contemplating how to sell wholesale as a small business, try out different methods for getting retailers and figure out what works best for you. The more potential retailers you talk to, the more comfortable and successful you will be.
If you’re starting out with your product business and need more help on how to sell wholesale as a small business, check out our post on Choosing a Distribution Channel for Your Product next!