Did you know that the global revenue of the cosmetics industry is projected to steadily rise from 2024 to 2029, with a total increase of $23.9 billion, representing a 22.04% growth? Most of that revenue will be generated in the United States.
Another study found that nearly one-third of US beauty consumers buy beauty products on Amazon, 24% from Walmart, and 15% from beauty retailers’ websites which are all popular online shopping spots.
All these data point to the fact that it is a good time to learn how to start selling cosmetics online and make money.
In this guide, we’ll explore the benefits of selling cosmetics online and discuss common pitfalls to avoid, helping you set a strong foundation for your business.
Wondering how to get started?
Let’s find out.
Benefits of Selling Cosmetics Online
Learning how to start selling cosmetics online can be a smart and easy move once you understand the benefits of this business model. Here are the key benefits to consider.
Wider Audience Reach
One of the most significant benefits of selling cosmetics online is the ability to reach a global audience. This means you can attract customers from various regions and demographics.
The beauty industry is booming, with online sales in the U.S. projected to reach $45 billion by 2027— at this point nearly 60% of beauty product purchases will be made online. By tapping into this market, you can maximize your brand recognition and potential earnings.
With effective marketing strategies, your brand can gain visibility worldwide. Many ecommerce platforms offer various marketing tools to target specific demographics and preferences, ensuring you reach the right customers.
Lower Operational Costs
Running an online cosmetics store is often a more cost-effective business than a brick-and-mortar shop. There’s no need for a physical storefront, which means you can save on rent, utilities, and in-store staffing costs.
Additionally, many online platforms offer dropshipping models or third-party fulfillment services. These arrangements can minimize the need for large storage spaces and reduce inventory management costs.
By operating online, you also have the option to start small and scale up as demand increases. If you’re considering how to start selling cosmetics online, you can take advantage of these cost-saving measures to set a foundation for your venture.
24/7 Availability for Customers
Another standout advantage of selling cosmetics online is the ability to operate 24/7. Unlike physical stores with set opening and closing hours, an online shop is always open for business.
This means your customers can browse and purchase products at their leisure round the clock which can foster impulse buying. Shoppers may decide to purchase a product while browsing late at night or during breaks at work.
By enabling such flexibility and convenience, you can record higher sales volumes compared to traditional shopping stores.
Data-Driven Insights and Personalization
Ecommerce platforms often provide features for tracking user interactions and purchases. With this data, you can know what products are popular and why customers choose them. By analyzing this information, you can make informed decisions about inventory and marketing strategies.
Personalization is another key advantage of ecommerce in the beauty industry. You can use customer data to personalize the shopping experience. This can include recommending products based on their past purchases or sending targeted promotions.
Also, with customer data, you can identify trends in consumer behavior over time. This can help you adapt your offerings based on emerging beauty trends to stay relevant.
More Upselling and Cross Selling Opportunities
One of the most powerful advantages of running an online cosmetics business is the ability to implement effective upselling and cross-selling strategies.
Ecommerce platforms offer several ways to suggest additional items. You can present customers with product recommendations based on their purchase history and browsing behavior.
Bundling products is another excellent way to encourage cross-selling. Cosmetic brands can offer curated kits that include complementary items.
These bundles provide customers with a complete solution, making it more likely that they will purchase multiple items at once rather than just one. Plus, bundles can be marketed as limited-time offers to create urgency, driving impulse buys.
Moreover, customer reviews and testimonials can be powerful motivators for upselling. Online cosmetic brands can leverage positive feedback to encourage customers to consider premium products.
Displaying reviews that highlight the benefits of a higher-tier product can nudge customers toward choosing the upgrade.
Also Read:
How to Start Selling Cosmetics Online
Here are some of the best practices we recommend that you follow while starting your online cosmetics business:
1. Stay Legally Compliant
Before you start selling, you need to pick a business name and legal entity type for your cosmetics business. Along with registering your business, you should also create essential legal documents, agreements, and contracts to avoid issues later.
Here’s what you need to do:
- Choose a business name that is unique, relevant to the cosmetics industry, and has not been trademarked by anyone else. Also, ensure that the name is available as a domain name to build your ecommerce website.
- Pick a business structure that fits your operational, management, and taxation needs. The most common business structures include Sole Proprietorship, Limited Liability Company (LLC), and Corporation.
- Create essential agreements such as an LLC Operating Agreement (if forming an LLC) or Corporate Bylaws (if forming a Corporation). You should also create non-disclosure and confidentiality agreements when hiring employees or contracting with vendors.
- Check with the state and local authorities to see if you may need any licenses or permits to sell makeup products.
- Ensure that your cosmetics products are in compliance with the laws. The FDA regulates cosmetics in the United States under the authority of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA).
To create all of the legal documents correctly, you can buy our business formation package and leave the rest to us. It will help prevent mistakes that can turn out to be costly for your business. Check out our packages and inclusions for more details.
2. Decide on the Type of Cosmetics Business You Want to Run
When it comes to starting an online business in the beauty industry, there are multiple ways to sell makeup products. You need to finalize a business model that best suits your resources and budget.
Let’s take a look at the types of cosmetics businesses you can start.
- You can create your own beauty brand by manufacturing unique makeup products and selling them online. It is easy to create products such as lip balms and face oils.
While you can also manufacture these at your home, you will have to follow the FDA guidelines for ventilation, air control, and surfaces.
To manufacture your products on a large scale, you’ll need to set up a manufacturing unit.
- The other way to start a cosmetics business online is to buy products from popular beauty brands wholesale and resell them online after adding your profit margin. You can choose to sell products from local-only brands or natural/organic products.
By reselling products, you can skip the step of manufacturing beauty products. However, you’ll have to contact vendors, find a supplier who offers the best prices, list products on your website and other marketplaces, and be responsible for shipping and customer service.
3. Set Up an Ecommerce Store
You can either set up an online store on platforms such as Shopify or build your own ecommerce website.
You should:
- Buy a domain and use website builders such as WordPress and WooCommerce to build your ecommerce website. Or, choose to sell cosmetics online on Shopify or other online marketplaces.
- Pick a simple and minimalistic website design for your makeup brand.
- Use high-quality product images to showcase your products from different angles.
- Write concise, keyword-optimized product descriptions.
- Segment your beauty products into relevant categories to make it easier for people to find the products they need.
- Use search engine optimization to rank your product pages in the SERPs.
- Optimize your checkout process for conversions.
Also Read:
4. Know Your Product Inside Out
To successfully sell makeup and beauty products online, you’ll need to know everything about your products. You should be able to answer all questions that your potential customers may have about your products.
You should know:
- What are your products made of?
- How should customers use your products?
- When can they expect it to be delivered?
- How can your product make their lives easier?
- Do your products suit all skin types or are there any specific guidelines about who they are the best fit for?
5. Do Competitor Research
Along with understanding your target audience, you should also check out your competitors. You need to ensure that you’re offering better products, prices, and service quality than other cosmetics businesses online.
If you want to increase sales and generate more revenue, you need to convince people that your brand is better than others.
Answer the following questions:
- Who are your competitors?
- What do your competitors do well?
- What do they do poorly?
- What can you improve in your site, products, and marketing strategies to get more market share?
- What mistakes did your competitors make and how can you avoid them?
Competitor research can help you strengthen your brand’s position in the market. This will, in turn, help you get more leads, conversions, sales, and revenue in the long run.
6. Promote Your Beauty Products on Social Media
According to a 2023 study, nearly 30% of beauty product buyers worldwide sought guidance from social media reviews when making purchasing choices, which makes social media platforms powerful marketing tools.
You can:
- Build a solid presence on the top social media channels such as Instagram, Facebook, and YouTube.
- Create Shoppable posts to help customers buy your cosmetics while they are browsing through their social media feeds.
- Run affiliate programs to encourage people to help you drive more sales. Offering affiliate discounts can help customers make buying decisions faster.
- Partner with beauty influencers to promote your makeup products and reach wider audiences.
Also Read:
- The Top Essential Legal Documents for Startups
- What Is a Tax ID? Entrepreneur’s Guide to Employer’s Tax ID
Common Mistakes to Avoid When Selling Cosmetics Online
Starting a cosmetics business can be exciting, but it isn’t uncommon to make mistakes as a beginner. When you learn how to start selling cosmetics online, avoiding certain pitfalls can help you succeed faster. Here are some common errors to watch out for and steer clear of.
Writing Inadequate Product Descriptions
One of the common mistakes that most online cosmetic sellers make is to have vague product descriptions. Since customers can’t try products before buying, they rely on these descriptions to decide.
Product descriptions should be detailed and informative, and they should include all of the relevant information that potential customers need to make an informed decision. This can include information about the ingredients, the benefits, the usage instructions, and the price.
You can also include customer reviews and testimonials within product descriptions. These elements can provide social proof and encourage unsure shoppers. When potential buyers see positive feedback from others, they are more likely to feel confident in their purchase decision.
Neglecting High-Quality Product Images
When you start selling cosmetics online, visuals are as important as descriptions. Product images are one of the first things that potential customers will see, and they can have a big impact on whether or not they decide to make a purchase.
If your product images aren’t high-quality, customers may have second thoughts about buying. Poor lighting, low resolution, or limited angles can diminish the perceived quality of the product.
It’s important to invest in professional photography that showcases your products from multiple angles and in various settings. You can use lifestyle images to depict the product in use to create a more relatable experience for shoppers.
Failing to Comply with Beauty Industry Regulations
The cosmetics industry is heavily regulated and beauty industry regulations can vary from country to country. But they generally require that all cosmetics sold online must be safe and effective.
Organizations like the FDA (Food and Drug Administration) in the United States, the EMA (European Medicines Agency) in Europe, and the MHRA (Medicines and Healthcare products Regulatory Agency) in the UK play a crucial role in enforcing these standards.
Different regions may have their own rules about labeling, ingredients, and safety testing. Failing to comply with these industry regulations can lead to fines and penalties, and it can also damage your reputation.
Make sure to check the regulations for every market you plan to sell in. Proper labeling is also key, and it should include ingredient lists, usage warnings, and expiration dates.
Managing Inventory and Stock Poorly
Managing inventory is often overlooked when it comes to selling cosmetics online but it can cause issues. If customers find their favorite products unavailable, they may turn to competitors. On the other hand, overstocking can tie up your money and risk products expiring before they sell.
To avoid this, you can use inventory management tools like QuickBooks, Zoho Inventory, and others to monitor stock levels and sales trends.
This can help predict demand and avoid over-ordering or running out. Some software even sends alerts when stock is low, giving you time to reorder before products run out.
Don’t forget to consider seasonal trends or special events like holidays. Adjusting your stock levels for these periods can help you meet customer needs.
Also Read:
Frequently Asked Questions
1. How do I start selling beauty products online?
To start selling beauty products online, you should:
- Choose a business name.
- Register your ecommerce business.
- Build an e-store or ecommerce website.
- List your makeup and beauty products online.
- Optimize your online cosmetics store to attract more traffic.
- Promote your products on social media.
- Use affiliate marketing and influencer marketing to increase sales.
2. Do you need a license to sell cosmetics online?
To sell cosmetics online, you will have to get a license from Drug Control and Environmental Regulations. You may also need trade licenses to operate your online business.
The Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA) also regulate the cosmetics and makeup market.
3. How much does it cost to start a cosmetics line?
You can start your own makeup line by investing $5,000-$25,000. You can always start small and then scale your online business as you make profits.
4. How can I start my own makeup business from home?
It’s easy to start your own makeup business from home. You need a computer, an internet connection, an e-store or online shopping website, good beauty products, and the right marketing strategies to get started.
However, it is also important to register your online business as a legal entity to prevent penalties and lawsuits.
Either make your own products or find makeup brands and suppliers that allow you to buy wholesale and sell on your online store.
Make sure that you build a unique brand identity to attract and engage customers.
5. Where can I buy makeup products to sell online?
You can buy makeup products from the official brand websites or find vendors on online marketplaces such as Amazon and eBay.
Also Read:
Are You Ready to Start Selling Cosmetics Online?
Setting up an online store is not easy. You need to create a well-documented plan for your online business, which will include your preferred brands, makeup products, suppliers, and marketplaces.
Do you need help selling cosmetics online and building a profitable ecommerce business? Connect with our business formation experts to start your online cosmetics business on the right foot.