When you launch a beauty business, you’ll have to decide if you want to sell your products wholesale, directly to customers, or both.
Wholesale (selling at a lower price to a third party or retailer who sells to their own customers) can sound intimidating at first.
How do you find a retailer? How do you price your products? How do you work with retailers?
As you establish your product business, you might opt to sell your products wholesale.
But it’s worth learning the ins and outs! Selling wholesale can help you expand your brand and sell at a higher volume.
Here are our tips for how to successfully sale your beauty brands wholesale:
Getting Started with Wholesale
When you sell wholesale, you’ll have to stock enough products to have them available when retailers want them. That’s going to require a higher startup capital.
You also have to find ways to make your beauty brand stand out–after all, your wholesaler likely won’t care as much about selling your products as you do.
Well-designed packaging with eye-catching colors and simple, but professional labels will help your products pop on the shelves.
Finally, you will need to set up a system to keep your sales to retailers organized. Make sure your products have barcodes, and create a line sheet or catalog for retailers to shop from. You’ll also want to create a simple order form and a set of terms and conditions.
Pricing for Wholesale
While wholesale gives you the chance to sell high volumes of product and expand your customer base, you will be making smaller profit margins.
In the beauty industry, the wholesale price is usually 2-2.5 times the manufacturing cost. (So if you manufactured a product for $4, you would sell it for $8-10 to a wholesale buyer.)
If you sold that same item directly to a customer, you would probably want to mark it up to $20-25.
Working with Retailers
Working with retailers takes follow-up, persistence, and commitment. Your goal when you approach retailers is to form long-term relationships!
You should spend some time researching retailers before you approach them to make sure that they will be a good fit. Find out if they have similar branding to your company. Is their target market the same? Do they sell products that will complement your own?
For example, if your beauty brand focuses on natural products and recyclable packaging, you would want to find a retailer who also cares about the environment.
Keep in mind that large retailers usually pay on a net 60. That means they won’t pay you until 60 days after receiving your products. You’ll need to make sure you have enough inventory and capital to continue running your business while waiting on payments.
If you work with smaller retailers, on the other hand, you might be able to negotiate different pay terms. You could request upfront deposits, or a net 30.
Where to Find Retailers
You can find retailers in many places. Visiting business in-person is a great way to network and find retailers.
Other ways to find retailers include attending trade shows, reaching out to sales reps, and contacting boutique catalogs.
Never underestimate the power of social media! You can network online to find retailers who align with your brand.
You can also use Range Me, a platform used by Ulta and many other retailers. You can upload your brand and product information to attract retailers who are interested in your products. If you upgrade to a premium membership, you can submit your products directly to retailers who are actively looking.
Always research retailers before you approach them. Find out what types of products they sell, what their brand stands for, who they sell to, and what their prices are like. Make sure to also find out if they have a preferred process for product submission.
You want to know as much about the retailer as possible so you can individualize your approach. Be ready to show why your products would be a good fit for their business.
Consider offering incentives, such as free shipping or gifts. Another great way to stand out if you approach small boutiques or shops is to come with an appealing display that won’t take up too much room in their shop.
This makes it easier for them to sell your products, and makes you look professional and established.
You always want to stand out from the crowd and make it an easy yes for them.
Getting the Most Out of Trade Shows
Trade shows are a great way to meet retailers who are already looking for new companies to buy from.
But you should be selective about which trade shows you attend. They’re expensive–upward of $2,000, and you’ll have to travel to them. They also take a lot of prep time and work. It’s always a good idea to attend a show first. If it feels like a good fit, then you can come back as an exhibitor.
Before the trade show, prepare your materials so you can make an appealing booth. Think about what incentives you can offer buyers when you’re there. Create a sample pricing sheet to share with retailers.
You need to also have a system for collecting information to follow up. Make sure you set aside time to follow up later with the people that you meet!
Sales Reps, Distributors, and Showrooms
Working with sales reps and distributors is a great way to get started with wholesale. They have connections and know how to get in front of retailers. Plus, they can save you the time and effort of working with retailers directly. You can also display your products in showrooms to get in front of retailers.
You can search online for sales reps and distributors. Trade shows are another great way to meet them. Don’t hesitate to call stores directly to ask who they work with.
Keep in mind that showrooms, sales reps, and distributors will all take a cut of your profits–usually operating on a 5% to 20% commission.
Cold Call and Follow Up
Cold calling can be intimidating, but it’s one of the best ways to find new business. Make a list of stores you would like to work with, then call, email, or visit them in person. If you reach someone, give them a catalog or a sales sheet and an easy way to contact you.
Don’t forget to follow up! Research shows that only 2% of sales are made during your first contact with someone. You’re much more likely to make a sale in the follow-up.
If you don’t hear back at first after emailing or leaving a message, If you don’t hear back after sending an email or leaving a message, follow up with another email or phone call.
A lack of response doesn’t necessarily mean they aren’t interested in your products. They might have just been busy or overlooked your message. Be persistent!
Find What Works for You
You don’t have to try every approach at once, but you do want to find what works for you. Not every beauty brand finds wholesalers the same way. Some swear by trade shows, and others rely only on cold-calling. You’ll have to experiment with different methods and figure out what works.
The more that you pitch your products to potential retailers, the more comfortable and successful you’ll become!
Are you launching a new beauty brand? If you’re just getting started with a beauty business and need more tips, Learn How to Launch a Beauty Product can help. It covers every aspect of starting a beauty business, from creating a solid foundation and getting funding to manufacturing, branding, sales, and marketing. Learn more about the course here.