As a wholesale distributor of cosmetics and other beauty products, you sell goods directly to retailers instead of selling them to consumers through retail stores. Wholesale distributors typically buy products from manufacturers and resell them to customers like department stores, drugstores, and mass merchandisers. They sometimes also sell to independent retailers like beauty supply shops and salons.
Today, beauty wholesale businesses make up only 1% of all U.S. businesses but accounted for 5% of total sales in 2016. And in 2017, the industry generated $60 billion in revenue.
So if you’re interested in starting a wholesale beauty product business, here are some tips to get started.
1) Be aware of the latest trends
Beauty trends change faster than you can imagine. Just think of how the beauty standards for women have quickly evolved from being skinny to slim-thick all thanks to the infamous family, the Kardashians. They popularized the small waist wide hips look and it resulted in a surge in demand for Brazilian Butt Lift procedures. They also popularized the thick lips look which they themselves leveraged to sell their own line of lip liners. To be a top beauty product wholesaler is to keep abreast of the latest changing trends.
2) Choose a good beauty product supplier
Be sure to do in-depth research when choosing the best supplier. Look at the reviews posted on the company’s Google Business Profile and see what their customers have to say about them. If you see too many negative reviews, it’s a good sign to stay away.
3) Explore your options for suppliers
Regular suppliers aren’t the only types of businesses you can go to for your supplies. You can also go directly to online beauty marketplaces like BeautySourcing where they not only provide you with top-quality products but also provide you with an online to offline sourcing advantage where you can check out trendy products onsite during the trade shows.
4) Don’t Forget About Internet Sales
Establishing a strong online presence is essential for anyone who wants to start a beauty wholesale business these days. If there’s anything we learned from the COVID-19 pandemic, it’s that we cannot fully rely on physical stores to do so. According to the NPD Group, e-commerce sales grew 20% between 2015 and 2016, and this number is expected to increase even more. So start a website, hire SEO writers to write search-optimized content, and grow your online presence now!
5) Become Familiar With Regulations
Before you open a wholesale distribution company, learn the rules governing the sale of cosmetics. For instance, it may be illegal for you to purchase certain products from overseas suppliers unless you register your company with the FDA. You don’t want to get involved with illegal activities by accident. It will cost you too much.
6) Research Distributorships
Some wholesalers choose to open their own cosmetic manufacturing plants in order to control every aspect of production. However, you can also partner with another company to manufacture your product line. Some wholesalers work exclusively with a single manufacturer while others distribute multiple brands.
7) Understand How to Manage Inventory Costs
Wholesale distribution companies must maintain large inventories of various products. In fact, according to the Consumer Federation of America, wholesalers spend 8 weeks out of the year managing inventory. Because of this, they rely heavily on third-party logistics providers to transport, store, and ship items.
8) Choose Products That Are Popular Among Consumers
Many wholesalers specialize in niche categories like hair care, skin care, nail polish, and lip gloss. Others focus on makeup or skincare. Whatever the category, it makes sense to select products that appeal to consumers.
9) Hire People Who Can Do What You Need To Get Done
You’ll need employees who are skilled in different aspects of the business. For example, you’ll need salespeople who are able to meet face-to-face with clients, graphic designers who understand how to package merchandise, and warehouse workers who can pack and move boxes.
Do you now have a better idea of how you can start a wholesale beauty business?
And there you have it! These are our top tips on how you can become a wholesale distributor of beauty products. Starting a wholesale beauty business can be daunting. But with these tips, we are confident that you can succeed!
