The exchange of products or services using the Internet has increased significantly in recent years. This is known as “electronic commerce” or “ecommerce” and offers the possibility of having a business with a worldwide impact and available to anyone at a global level.

Nowadays, the cosmetics business in the beauty market has evidenced a significant increase. Considering that, it is an industry that is in great demand and that will continue to increase with the variety of products that are provided to potential customers.

Thus, both ecommerce and cosmetics have become great allies, making it easy and convenient to search for a cosmetic product online, and its advantages are visualised by the continuous development of technology. Therefore, in this post, we will highlight everything relevant about the cosmetics and beauty industry business in the online world that can expand extensively.

What is the cosmetics and beauty industry?   

While it is true that cosmetics is a discipline that is part of the health sciences, its main objective is to develop personal care products to improve people’s physical appearance. In particular, the beauty of skin and hair.

Thus, the cosmetics industry brings together branches such as chemistry, medicine, pharmacy and biology. The main inputs are chemicals (organic and inorganic), animal fats and minerals. All with the aim of creating and optimising personal care products.

Meanwhile, over the past few years, beauty and skincare has become one of the largest industries in the world, even coming close to the fashion giant. By 2020, cosmetics sales are expected to exceed 675 billion dollars.

For this reason, it is predicted that by 2023 the cosmetics industry will generate around 800,000 billion dollars. Since, the younger generation is one of the main catalysts of the sector, as millennials use 6 or more beauty products a day and this can be seen in the many beauty videos that are posted on YouTube and other video platforms. Inspiring people to buy cosmetics or beauty products digitally.

Why is it profitable to sell cosmetics and/or beauty products? The big business

During the time of the pandemic, it is undeniable that the cosmetics business suffered considerable havoc, revealing losses and so on, due to the closure of establishments and the halting of various activities. This, unfortunately, reduced the sales of make-up and cosmetic products.

However, self-care started to become more important as the office moved to the home. In other words, after a period of confinement, both men and women became more concerned about their physical appearance, either because of free time or because they had to appear on video calls, for example.

From there, the beauty business regained its relevance and since then, it has managed to capitalise on the moment and position itself in an incredible way. All this boosted sales of creams, masks, make-up and more cosmetic products specialising in skin and hair care.

Therefore, although it has been an industry in high demand for many years, today, its vigour is unparalleled. This means that its demand has multiplied and due to the influences of digital platforms and new generations, its sales have risen unparalleled.

Indeed, it is profitable to sell cosmetics and beauty products and because of this, it is identified as big business. Some of the reasons for this can be summarised as follows:

• Cosmetics are used every day – this means that they are in great demand.
• They allow high profit margins – In addition to being in high demand, cosmetics allow high profit percentages (between 40 and 80%) and hence their profitability.
• Incentive to start your own brand – The cosmetics industry opens the door to access a convenient business, creating your own brand to gain relevance in the sector.
• They help to achieve personal and professional growth – As they allow you to build your own brand, create a business plan and earn money under your own guidelines, they allow you to achieve valuable personal and professional growth.
• It provides the option of doing business from home – With cosmetics, it is not necessary to work in a physical establishment, as it allows you to do it from home and even online, thus increasing your profits.
• You will contribute to satisfying a wide audience and enhance their beauty – It also allows you to do your bit for the world and satisfy potential customers to raise their self-esteem. In other words, it fosters a positive social impact.

Cosmetics ecommerce: What is it and what are its main characteristics?

Beyond discerning what the cosmetics industry is and why it is so profitable to access this type of business, it is worth understanding what cosmetics ecommerce is. These are two terms that have become great allies in recent years.

In this sense, e-commerce of cosmetic products is defined as a niche in which the system of buying and selling cosmetic products uses the Internet as the main medium of exchange. Therefore, it refers to a trade that handles ordering, payment and shipping of cosmetics or beauty products basically through electronic means.

Although this type of business had already started before, the pandemic has increased the sale of personal care products online. Thus, in 2020, the online sector in this industry experienced a growth of more than 36% with approximately 8.4 million buyers. Meanwhile, physical cosmetics sales suffered a sharp drop in sales, both in Spain and worldwide.

In addition to this, the rise of social platforms such as Instagram, TikTok and YouTube have managed to create new standards and, day by day, motivate the public to buy cosmetic or beauty products online. That is why, the sale of conventional cosmetics has become a thing of the past and nowadays, it is important to bet on cosmetics ecommerce.

This growth therefore highlights the digitalisation and transformation that the sector is undergoing and will continue to undergo. Although the adaptation has not been easy, in reality, consumers tend to order these products through digital means, for many reasons, the most important of which are the convenience and simplicity of obtaining these items.

The best advantages of selling cosmetics online

From any point of view, technology guarantees a multitude of benefits for both sellers and consumers. In this case, we will focus on the main advantages of selling cosmetic and beauty products online:

It is easier to manage than an offline business

Unlike an offline business, online businesses allow you to manage all aspects of your business more easily. Considering that, you can do it from anywhere in the world and you will never need to be physically present in a specific location to make sales.

On the contrary, with just an Internet connection, you can manage your cosmetics business and if you do a good job, you have a better chance to reach any customer globally, build trust with your audience, generate brand value, build a good image and deliver efficiency.

Much more reach to your potential customers

In short, your customer is the world. Because when you have an online shop, your market goes from simply being your city to being the whole world. That way, you do not have the limitation that a conventional shop reveals, as it can only make sales if the public comes to the shop.

Thanks to cosmetics ecommerce, the products you sell can cross geographical borders and, in effect, these limitations disappear. Therefore, any number of people who are interested in purchasing the items you promote will be able to obtain them regardless of where they are. Especially if you create an optimal marketing plan.

More opportunities for customer loyalty and satisfaction

Through more effective communications where consumers can leave feedback on products, raise complaints or ask for personalised recommendations, it is much easier to build customer loyalty and create a strong bond with them.

In addition, by knowing their consumer habits, who they are, where they come from, what they usually buy, what they like most, how often they visit your website and what their average purchase is, you can devise new marketing strategies that meet their requirements and make them feel satisfied with what you do. In short, they will be better served and this will allow you to expand your market coverage range.

Possibility of eliminating working hours and working 24 hours a day

Inherently, an online shop allows customers to access it at any time of the day and make their purchases, so they have no limitations to carry out this process whenever they can or wish to do so. This is because you do not have to adhere to the established opening hours in your city as you have to do in physical establishments.

Therefore, your business will never stop working and this translates into selling your products 24 hours a day, 365 days a year. Add to this the possibility of invoicing nationally and internationally, not only in a limited area.

No need for large initial investment or fixed costs

The initial investment and initial costs for setting up an online shop for cosmetic products are minimal. For example, all you need is a computer with an Internet connection, a domain name, an eye-catching logo and name, and an optimal website designed for user convenience.

On the other hand, there is also no need to incur fixed costs, because there is no need for opening permits, rent payments in a local area or a large deployment of physical shop staff. In other words, ecommerce helps you to reduce a multitude of costs that, in one way or another, minimise your profits perennially.

It is more practical to recoup the initial investment

While it is true, it is no secret that offline businesses require a high initial investment that cannot be recovered in a short period of time. There are many factors involved in this and sometimes there are risks of bankruptcy if you do not act correctly throughout the process.

However, this is not the case with online businesses in the cosmetics and beauty industry. Because they are simpler to manage, the initial investment is low and the fixed costs are minimal, you have the possibility to recoup your investment much earlier than expected and compared to a traditional business. Taking into account that, in addition, you have a larger potential audience and a wider reach.

Willingness to dispose of stocks

Although cosmetic and beauty products do not require a large investment, it is true that having a large stock requires a large sum of money, which is not easy to possess in the beginning. But this can be easily eliminated with online sales.

Therefore, unlike a conventional business where you need to have a small warehouse to store the products, in online shops it is possible to work on an order basis. In other words, you can promote the products on the web and once you get the payment from the customer, you can place the order with your supplier. This way, you avoid spending more money and you are not obliged to have a physical space to store the goods.

In addition to this, the cosmetics industry allows you to enjoy the ease of dropshipping. This is an online business model that helps you to find a good supplier; which offers you the possibility to promote their products (as if they were yours) and once you get the orders, you simply have to place them together with the shipping details of the end customer and the suppliers themselves will take care of managing and shipping them. This way, you only have to worry about advertising the cosmetics and increasing your profits.

Optimising value for money to satisfy your audience

Another benefit of accessing the cosmetics industry online is to improve value for money. Since an ecommerce shop allows you to cut costs considerably, it will also help you to provide products at a lower price and thus add extra value to your service.

In this way, apart from offering competitive prices that allow you to become a reference seller in the market, you will be able to build loyalty with each of your customers by offering them the same quality at a lower price. This way, many people will prefer your products and at the same time, it will help you to increase your profits and improve your brand’s visibility.