How to Start an Online Cosmetic Business (Complete Guide)
The global cosmetic industry is worth billions of dollars and is only growing. Thanks to the internet, it’s now easier than ever to start your own online cosmetic business. Whether you’re selling your own line of skin care or makeup, there’s a lot of opportunity in this industry.
However, starting any kind of business is not without its challenges. In this blog post, we’ll give you some tips on how to start an online cosmetic business. We’ll cover everything from finding the right products to market to building a website and promoting your business online.
Related: How competitive is the beauty and cosmetics industry?
#1 Know what you want to sell
When it comes to selling online, it's important to first know what you want to sell. This might seem like a no-brainer, but many businesses make the mistake of trying to sell everything related to their niche. If you want to be successful selling online, you need to focus on a few key products, that you can sell well.
Think about what you're good at and what your customers really want. Then, focus on creating a great online experience for those products. If you can do that, you'll be well on your way to selling successfully online.
The beauty and cosmetics industry consists of the following niches:
- Skincare
- Hair care
- Fragrances
- Make-up
- Oral cosmetics
- Color cosmetics
- Toiletries and deodorants
- Hygiene and personal care products
- Beauty appliances
Once you know what niche you want to enter it's time to choose a business model. There are a variety of online business models to choose from. Which one is right for you will depend on your interests and budget.
Most popular online business models for cosmetics include:
- Dropshipping
- Sell on marketplaces like Amazon
- E-commerce store (incl. sourcing/packaging of products)
Don't worry. We will give you a brief overview of all business models along with there with the pros and cons.
Overview
Dropshipping is an order fulfillment method where a business doesn’t keep the products it sells in stock. Instead, the seller only purchases inventory as needed from a third party.
You could dropship eyelashes, makeup appliances, or face rollers without ever touching the product. This business model is perfectly fitted for first-time entrepreneurs.
Pros:
- Easy to start
- Sell worldwide
- No upfront capital required
Cons
- Limited customization
- Zero to no control over packaging
- Potential quality issues
Amazon is a big deal! With millions of shoppers using Amazon every day, you can reach a large audience of potential customers with ease. And since Amazon is such a trusted website, shoppers are more likely to make a purchase from a seller on Amazon than from another site.
Pros:
- Fulfillment and customer service provided by Amazon
- Easy setup
- Advertising option
Cons:
- Selling fees and storage fees
- Product prep Requirements
- Amazon owns customer relationship
This guide will help you get started: How to sell on Amazon
E-commerce businesses are becoming increasingly popular, but they're not for everyone. Being the owner of an online store comes with a lot of responsibility. You need to take care of everything from product sourcing and packaging to customer service.
Pros:
- Potentially less expensive
- More Control
- Quickly Scalable
Cons:
- Requires higher initial investments
- Time-consuming
- Having to deal with storage
The e-commerce industry is now a fairly mature one with many differentiated approaches. That means there are plenty of existing companies to learn from. By studying existing businesses, as well as their audience, you can identify the business model that’s best for you.
#2 Conduct in-depth market analysis
Congratulations, you build the foundation of your business. But wait, there is more you need to do.
Conducting market analysis is critical to the success of any business. Without a thorough understanding of the market, it is difficult to make informed strategic decisions about where to allocate resources. This will help you understand the needs and wants of your target market, and it will also give you insights into your competition.
Once you have selected the appropriate method or methods, you need to gather data. This data can come from a variety of sources, such as surveys, interviews, financial reports, and government data. After you have collected the data, you need to analyze it to identify trends and patterns.
Here are some free tools that help you with your research:
The moment you've gathered all of your data, it's time to start analyzing it. Look for trends and patterns, and try to identify any areas where you have a competitive advantage.
This step-by-step guide will help you do proper market research.
Pinpoint target customers
If you have researched your target market well enough, then you should be able to know who your audience is. Here are some key characteristics of your ideal customer you should know by now. This information will save you a lot of marketing dollars:
Key characteristics to know about your customers include:
- Average Age
- Gender
- Location
- Habits
#3 Write a business plan (for your cosmetics business)
Every business owner must need to write a business plan. This document will outline your business goals, strategies, financial projections, and more. Creating a business plan can seem daunting, but it's not as difficult as it may seem.
All you need to do is take a template as a reference and change it to fit your business.
Here are 2 examples provided by the U.S. Small Business Administration:
Alternatively, you can use one of miro's lean canvas.
#4 Create a logo and business name
Creating a logo and business name for a cosmetics company can be a fun and creative process. However, it's important to keep a few things in mind as you develop your brand. First, your logo should be simple and easy to remember. Second, your business name should be reflective of the products you sell and the overall tone of your company. And finally, make sure to do your research to ensure that your chosen name and logo are available and not already being used by another company.
With these guidelines in mind, let's take a look at a few tips on how to create a logo and business name for your new online business.
Name
Maybe you already have a first idea of what you want to call your business. If not, I highly recommend you this tool called namelix.
This tool is free to use and will not just suggest you business names based on the keyword you entered, it also shows you matching designs.
Logo
Now that you have a solid idea of what you want to call your startup, it's time for you to start designing your logo. Canva offers tons of design templates related to any niche possible. Feel free to browse their catalog.
#5 How to source beauty products to sell online
There are many ways to source products online. You can use online directories, trade shows, and manufacturer websites. There are a few things you need to take into account: Quality, price, and reputation of the supplier. To avoid legal trouble make sure that the products you're sourcing are legal in your country.
If you decided to start a dropshipping business then Zendrop is the best choice for you. They offer fast worldwide shipping and the customer service is outstanding.
Everyone else, keep reading.
There are 2 ways you can source branded products online. The second one is a bit more complex and cost-intensive.
Easy route - Private Label
A private-label product is manufactured by a third-party manufacturer and sold under your brand name. This simply means that you don't have to reinvent the wheel. You sell what already works and don't need to come up with a formula or new design. Even companies like Walmart and Target use this method of sourcing products.
All you have to do is find a good product and request a quote from the manufacturer. Make sure to order a sample and test the product to see if it fits your criteria.
Let's say, you want to sell skin care products. Just go to Thomasnet and type, "private label <your niche>".
Another method would be to search on google for private-label suppliers. (Example: Private-label <your niche> manufacturers)
Complex route - Find an OEM Manufacturer
First of all, I would only recommend you to source from an Original Equipment (OEM) Manufacturer if you have at least $10.000 cash on hand.
This guide will help you find a manufacturer or supplier
#6 Set Up your E-Commerce Store
Congratulations! You created the fundamentals of your business. Now let's get into the technical part of starting an online business.
I recommend using Shopify. This platform offers an easy way to quickly launch an online store. They also provide you with tons of free resources on how to grow your recently created venture.
Buy a domain
In the simplest of definitions, a domain name is your website’s address on the internet. For example, google.com is a domain.
I wouldn't recommend buying a domain from Shopify, because they are overpriced. A cheaper alternative is Ionos.
Here is a price comparison between the two for the same domain:
Shopify
Ionos
If a domain with your exact business name is already taken, then you can just add things like "the" at the beginning. Example: beautyempire.com =>thebeautyempire.com.
Website copy
If you own or operate an e-commerce store, then you need to know that great copywriting is essential to driving sales and conversion. After all, your product descriptions, static pages, and blog posts are what will convince potential customers to buy from you.
It is not as difficult as it may seem. You can write wonderful website copy using Artificial Intelligence. Platforms like copy.ai and jasper.ai will generate the content for you. All you have to do is copy and paste. Well, maybe you will have to make a couple of changes, according to your preferences.
Here is how it works:
- Open an account (Both offer free trials)
- Select what you want to write (Ex. product description)
- Add your keywords
- Done!
It is that simple! Make a couple of changes to the generated content so it fits your brand.
Create a Google Search Console account
Google Search Console (GSC) is a free service offered by Google that helps you monitor, maintain, and troubleshoot your site's presence.
GSC will tell you if your domain is indexed by google or not. And will warn you about issues regarding your e-commerce store. Setting up GSC is pretty easy. Just follow the steps provided by Google.
#7 Market your products online
The best marketing strategy simply doesn't exist. However, there are some general steps you can follow to develop an effective marketing strategy.
How to develop a marketing strategy:
1. Choose the type of channel you want to advertise on:
Common types of Online Marketing:
- Influencer
- Social Media (Facebook and TikTok Ads)
- Search Engines (Google Ads)
2. Create Ad material
So, as a small business owner, how do you weed through the big corporate marketing campaigns and your competitors' ads, flashy design, and high budgets, and figure out what you should do for your own business?
You are probably thinking right now about how to weed through the big corporate marketing campaigns and your competitor's ads. Well, nowadays it doesn't take a marketing team of 5 people to run successful ads. Even when you don't know where to start right now. You can hire freelancers on Fiverr to let them create Ads for you.
In my experience User-Generated Content (UGC) content is the best way to go with. They are engaging, informative, and funny.
3. Set a budget
Channels like TikTok and Facebook usually charge you per 1 thousand impressions. The minimum budget is usually $5 a day. It sometimes takes a couple of weeks until your ads take off. Especially if you just created a new account. I recommend spending at least $15 a day in the first week to get as much data as possible.
Once you have collected enough data, Facebook and TikTok will display your ads more effectively. Make sure to always keep your Ad sets as narrow as possible.
How to Create an Effective Digital Marketing Strategy (reliablesoft.net)
#8 Educate yourself about business
There are a lot of different factors in business, from accounting to marketing. If you want to be a successful business owner, you must educate yourself about all of these different aspects.
The good news is that there are plenty of free resources out there to help you learn about business. You can find books, articles, online courses, and more. And the more you know about running a company, the better equipped you'll be to run a successful one. It will definitely pay off in the long run.
Best Books:
- The Lean Startup
- The $100 Startup
- The 4-Hour WorkWeek
Best Podcasts:
- The Tim Ferriss Show
- How I Built This
- Shopify Masters
Online Courses:
- Coursera
- Udemy
- Skillshare
Being an entrepreneur can sometimes be a hard job. But remember diamonds were created by pressure. Learn from mistakes and keep improving. This journey will cost you a lot of energy. But you will learn so many valuable skills along the way. Make sure to not be dependent so much on ads to make sales. Create an audience, post on social media, and provide value. Then your products will sell without ever spending a dollar on ads.
Conclusion
The cosmetic industry is thriving and offers a lot of opportunities for entrepreneurs who want to start an online cosmetic business. However, starting any business is not without its challenges. To succeed in this industry, entrepreneurs need to focus on a few key products and create a great online experience for those products. They should conduct in-depth market analysis, pinpoint their target customers, and write a business plan.
When building a Shopify store, it is important to focus on creating a visually appealing and user-friendly design, as this can help increase conversions and sales. One example of a Shopify store that you may want to check out for inspiration is GetCaridi.com.
