Renowned brick-and-mortar retailers like Sephora and Ulta aren’t going anywhere, but that doesn’t mean there is a huge opportunity and a lot of space for direct-to-consumer (DTC) brands in the beauty space to make their mark and build a strong customer base. Independent makeup lines have successfully grown by offering products that meet a unique need, and they have the opportunity to connect with their customers on a more personal level.
Starting an online cosmetic business can be highly rewarding, and there has never been a better time to start one. Read on to learn more about the current state of the cosmetic industry, and how to start your cosmetic line step by step.
It’s a great time to be in the cosmetics industry
Even amid a global pandemic with stay-at-home orders in place for months on end, online beauty brands have seen a big spike in sales with over 64% month-over-month growth. But even before the COVID-19 pandemic, online beauty brands have blown up. The great thing about starting a DTC makeup line is that it allows brands to tell their story and connect with their customers, which is what today’s consumer and Generation Z shoppers crave the most from brands.
Here are a few noteworthy beauty industry statistics that showcase just how much opportunity there is for new makeup lines worldwide.
In 2019, the cosmetics industry in the US market was worth $93.5 billion
There are endless opportunities in the cosmetics industry. Outside of the basic skincare and makeup products like foundations, eyeshadows, and lipsticks, there are underserved audiences and new makeup trends popping up that you can tailor your products around, such as men’s makeup or vegan-free makeup.
The global beauty industry is expected to exceed $716 billion by 2025
There is a ton of potential across the globe to expand your makeup line into new markets. You can start out in your home country, then expand into selling internationally. There are also many resources available that make it easy to attract a broad reach of customers, such as international fulfilment services.
DTC cosmetic brands bring in an average of 63% in retention revenue
What makes DTC makeup lines different from brick-and-mortar retailers is that they can easily attract a specific audience or niche. DTC cosmetics lines oftentimes compete less on price and more on attracting customers with a specific need or common social values.
How to start your makeup line in 6 steps
Although there is so much opportunity in the online cosmetics industry, there are considerations to keep in mind when launching a makeup line. Barriers to entry are low, and it’s easy to get an online store up and running, but you’ll have to consider competition, customer acquisition costs, and how you’re going to create a great customer experience. Here is a step-by-step guide on how to get started.
1. Choose your niche
Choosing an ecommerce niche is crucial when starting a cosmetics line. For instance, makeup designed for men is in high demand and organic makeup brands continue to be popular. The attributes of your products will help you stand out from the competition, from the type of ingredients you use to the specific audience you cater to and what your brand stands for.
To find a niche, you’ll want to first look into what type of makeup products are in high demand, or you even start by asking yourself why you want to start a cosmetic line in the first place. Are you passionate about anti-cruelty? Have you struggled to find a foundation that matches your unique skin colour? Many times, the reasons that drive you to want to start a cosmetic business are the same factors other makeup product lovers are looking for.
2. Perform competitor research
In the online cosmetics industry, competition is high. Conducting thorough competitor research is one of the most important things you can do before you launch a makeup line. You’ll want to research a competitor’s pricing model, special offers, social commerce strategy, customer reviews, and press coverage. Taking a look at a competitor’s mission, vision, and values will also help you craft a unique brand position that stands out. With this research in mind, you can start to identify ways to further differentiate your brand.
For instance, the founder of the makeup brand Stowaway, Julie Fredrickson, was frustrated by carrying a heavy bulk of makeup products in her bag all the time just to keep up with her makeup routine. So she came up with the idea of creating travel-size cosmetics that easily travel with you when you’re constantly on the go.
3. Source a cosmetics manufacturer
There are two common types of makeup manufacturers: private label or white label. Private-label makeup lines are custom-made by a manufacturer that allows cosmetic businesses to sell their products under their brand name. With a private-label manufacturer, you have the option to customise your products, such as colour, fragrance, or packaging options.
A white-label manufacturer makes makeup products for multiple brands that then rebrand it under their name. Although both private and white label manufacturing are similar and cost-effective, working with a private-label manufacturer allows for more customisation, which makes your product unique and hard to find elsewhere.
However you decide to manufacture your makeup products, be sure to familiarize yourself with your products’ ingredients and comply with local and international rules and regulations, depending on where your customers are located.
4. Create a memorable brand
What attracts customers to DTC makeup lines are the stories brands tell and how they make people feel. The emotional connection with your customers is important when it comes to selling a makeup line. Makeup lovers are more likely to purchase products at a higher price than drugstore brands if it makes them feel more confident, aligns with their values, and brings them joy.
The perception of your brand starts with the messaging and imagery used in your marketing and ad creative and doesn’t end after the unboxing experience and product usage. Every stage and touch point in the customer journey counts. Before you launch a makeup line, take the time to create a brand (including name, logo, website, and marketing assets) that makes your cosmetics line stand out from the competition.
The more unique your branding is and the more consistent you are with your brand, the more recognizable your brand will be. Investing in branded custom packaging is also a great way to delight your customers when their order arrives.
5. Set up your shop
Creating an online store can be one of the easiest and most fun parts of starting a makeup line. There are several ecommerce platforms (such as Shopify, Squarespace, BigCommerce, WooCommerce, and Wix) that make it easy to launch an ecommerce site without requiring a web developer.
Before you push your website live to officially launch your makeup line, don’t forget to test the entire purchase experience to make sure everything is working correctly. Most ecommerce platforms make it easy to test run an order, so you can verify shipping settings look right, your checkout page is optimised, and that your post-purchase emails are firing correctly.
6. Market your brand
Unless you sell solely on Amazon and rely on the Prime badge to get sales, you need to be creative on how potential customers find you. In marketing, it ‘pays to play,’ meaning Although there are a lot of bootstrap ways to market and promote your makeup line, you will need a marketing and ad budget to gain online store traffic and attract customers.
Every brand is different, so you can pick and choose marketing and ad channels based on where your potential customers hang out, visit, and find information. You can start a social ad campaign using Facebook or Instagram, or give Google ads a try.
That’s not to say you can’t come up with creative ways to promote your brand organically. DTC cosmetic business Glossier is a prime example. Founder Emily Weiss started Glossier as a beauty blog (known originally as ‘Into the Gloss’) and she used her blog following to launch Glossier, which paved the way for many DTC makeup lines. Organic marketing techniques like blogging and other forms of SEO-rich content are great ways to get more visits to your store.
What differentiates successful brands from others?
Foundation, mascara, and eye shadow — the foundations of makeup (no pun intended) — are everywhere. But what makes DTC cosmetic lines different from affordable drugstore brands like Maybelline or a premium brand like MAC is that more and more shoppers are choosing DTC makeup lines because they have a knack for building trust with their customers through quality products, shared social values, and reliable ecommerce shipping.
Many online shoppers are willing to pay a higher price if they know they’re getting a high-quality product. Quality is a significant factor when it comes to choosing your brand’s products over drugstore cosmetic businesses that are convenient to purchase and come at an affordable price. Selling products that are made with quality ingredients, whether they are organic, allergy-free, or vegan, will attract a different type of audience.
Social following and values
Kylie Cosmetics and Fenty Beauty both used the power of a large social following to gain brand recognition. The good news is that you don’t have to be famous like Kylie Jenner or Rihanna to attract a large social following. You can attract the type of customers you want by promoting your brand’s values, your expertise in applying makeup or sharing tips, through viral content, or even referral and loyalty programs. For example, the makeup brand Milk focuses on using premium ingredients that are cruelty-free, paraben-free, and 100% vegan.
Fast and affordable shipping
Sometimes, the one thing that makes your brand different from competitors has less to do with the makeup products you sell but the incredible customer experience you offer. One way to differentiate your brand is how quickly you can get products delivered to your customers at an affordable rate (or even better, free shipping). To keep customers coming back for more, you might want to consider a shipping strategy that can build customer loyalty.
With third-party logistics (3PL) partners like ShipBob, you don’t have to worry about getting products fulfiled and shipped out on time, which helps you compete with makeup lines sold on Amazon.
“In terms of growth, FlutterHabit is hitting the gas, so we need a system that can help us do it — and ShipBob has totally handled everything we’ve thrown at them.”
Bethany Peterson, COO of FlutterHabit
3 tips before you launch your cosmetics line
Before you launch a makeup line, here are a few tips to ensure you don’t encounter any unexpected surprises when executing your product launch plan.
1. Test your products
Before you start selling, you might want to test your products first. You can even offer potential customers samples and freebies, and ask for candid feedback in return. The feedback you get will be invaluable as it can help you make improvements to your products before you start selling.
There are several ways to go about testing your products and getting feedback. You can create a focus group and watch how potential customers apply it. You might learn that the packaging needs improvement (e.g. the eye shadow’s applicator is hard to remove) or it’s not being used as intended.
2. Understand your product’s ingredients
To start a makeup line, you’ll want to ship products to customers nationwide and probably eventually across the globe, which means you need to understand the rules and regulations of what can and can’t be shipped. Understanding which ingredients are in your products will help you mitigate risk of allergic reactions and prevent you from making false claims, and also ensure you ship safely, comply with courier regulations, and protect temperature-sensitive products (e.g., lipstick, concealer, or eyeliner) while in storage or during transit.
3. Partner with a logistics company
At first, in-house fulfilment is a great way to get the ball rolling, but as you grow, you’ll have to rethink your fulfilment strategy. If you want to grow quickly and scale efficiently, consider partnering with a 3PL that can take fulfillment-related tasks off your plate including inventory management, warehousing, packing boxes, and shipping.
That way, you can focus on customer relationships and launching new makeup products your customers will love, rather than spending all your time and energy on packing and shipping boxes.
It took less than 3 days to figure out the ShipBob system and configure our products in the dashboard. We connected to Shopify and I crossed my fingers. Without a hitch, ShipBob started sending out orders. I didn’t have to follow up about any issues. The orders were picked up automatically and customers got their packages. It was seamless.
Dwight Lee, Co-founder and COO at Hero Cosmetics
How ShipBob can help drive revenue
ShipBob partners with cosmetics businesses to help them offer Amazon-like fulfilment and shipping logistics. By outsourcing fulfilment with ShipBob, you’re able to focus on building your brand while we take care of the entire fulfilment process for you.
You can learn more about the different services we provide and how we’ve helped businesses in this market scale at a faster rate by downloading our guide: Shipping Solutions for Health, Beauty, and Wellness Brands.
To learn more on how ShipBob works and to request pricing, click the link below.