The Different Types of Cosmetics Distribution Channels
There are many different ways to market and sell cosmetics, such as online and in retail. Learn about the best cosmetics distribution channels here.
cosmetics distribution
The cosmetics market is growing more and more every year. By the end of 2022, the market size was over $262 billion.
If you're a new business owner in the cosmetics industry, you may be wondering how to work this to your advantage. Well, one way to do this is by having the right cosmetics distribution network.
There are a few different options that you have when it comes to distribution channels, and knowing the differences between them will help you choose the right one. This guide breaks down what your top options are.
Wholesale
One of the top options you have with makeup distribution is to go with a wholesale provider. There are a few immediate benefits you have by going this route.
The main pro here is that a wholesale provider can buy a large bulk of your product. If you're a company that's trying to sell as much product as you can, having a wholesale connection can allow you to unload a large amount of product at one time.
As a result, this can save on manufacturing costs because you're delivering it to one place in a much larger quantity.
However, there are downsides when it comes to this option. The first one is how dependent you become on your wholesale connection. If that business goes under or decides it no longer wants to buy your product, you could lose a large percentage of your business at one time.
The other downside is that you may not get the maximum value for your product. That's because wholesale providers tend to ask for a discount per item if they buy in bulk. Considering how much money you typically save on distribution costs, this is a fair tradeoff in most cases.
If you're going to go this route, make sure that this turns into a long-term relationship, and make sure this wholesale provider buys enough in bulk to make it worth your while.
Retail
A smaller option you have for a distribution channel is to use retail stores. The larger chains may be covered by wholesale providers so this can be a challenge out of the gate.
That's because if you're trying to get your product into smaller retail stores, you won't see as much return right away. The reality is that smaller retail stores can't handle the same volume.
However, the main pro to this is that, because retail stores typically charge a large markup to their customers for products, you could get paid more per item bought than you would with a wholesaler.
So, if you're willing to put more work into distributing volume, you could potentially see a better return on investment going this route.
The Internet
If you want to try to distribute your product yourself, the internet can be a great resource to get the word out. With this channel, you can do several things to try to promote your product.
One of the first things you should do here is set up a website. That can give your potential customers a platform where they can learn more about your products and a place where they can buy your product. Having a website can also help with brand recognition because if a customer wants to come back and buy more of your products, they will remember the brand that the website is named after.
Along with a website, you can use social media to engage with customers. Create content such as posts, pictures, and videos that allow you to spread the word about new products and sales. Best of all, your customers can comment and ask questions about these things after you publish your posts.
If your social media pages aren't getting the traction you want, sponsored content could be the way to go if you want to use the internet as a distribution channel. The right algorithms can have your promotion pop up on certain pages, search results, vlogger content, influencer content, and more.
Marketing and Sales
Finally, if you want to spread awareness for your cosmetics products, you can develop your own marketing team. This can be led by the sales department which can make cold calls and send cold emails to any potential clients.
This requires a bit of an investment on your part. However, most companies that are in this industry spend a decent amount of revenue on marketing.
On average, companies in this industry spend up to 14% of their revenue on marketing. That is because most companies know that no matter how good their product or service is, people have to know it exists.
If you're a new company in this industry, you likely don't have the brand recognition to sell your cosmetics products without a large marketing campaign. So, investing in marketing and sales could make sense to get your company off the ground.
Get Help With Cosmetics Distribution
These are some of the options that you have for distributing cosmetics products. You can decide to save on distribution costs and work with a wholesale provider. Or, you can distribute your product with multiple retail stores to add a little insurance.
If you want to do this yourself, you will need to have some sort of internet presence. That means creating a website and being more active on social media. Then, you will have to invest in a marketing and sales department.
Do you need help with cosmetics distribution? Click here to see what we can do for you.