The makeup retail market is crowded, but becoming an authorized makeup reseller or retailer can still be quite profitable because of the sheer number of sales. In the United States, the beauty industry is expected to reach an astronomical $90 billion by 2020. So, how do you get a piece of that pie? It’s actually pretty simple to get started retailing cosmetics the right way.
Why Become An Authorized Retailer?
Cosmetics resellers have a big business, and not all of them are authorized. In fact, in a majority of cases, it’s not illegal to buy a cosmetics product then resell it on Amazon or in your own brick-and-mortar shop. Nevertheless, you do get a way better deal when you become an actual authorized retailer.
Authorized cosmetics resellers are allowed to use manufacturer trademarks to help promote their business. For example, if you’re authorized to sell Smashbox Cosmetics, you can put the Smashbox logo on your website, on your Instagram and on any sort of promotional material you might use. You also eliminate the risk of being sued.
Authorized retailers also instill buyer confidence. Today’s cosmetics industry is rife with counterfeit makeup that can include some pretty scary, illegal ingredients (think: arsenic). In some instances, counterfeit makeup has caused rashes, irritation and infection, particularly around sensitive areas like the eyes and the lips. What consumers save upfront is not at all worth a hospital bill for a chemical burn.
Contact the Company Directly
Becoming an authorized retailer is actually quite simple. In the majority of cases, you simply need to contact the company and submit an application, but choose wisely. Seven companies — Johnson & Johnson, L’Oreal, Estee Lauder, Shiseido, Unilever, Procter & Gamble and Coty — own 182 of the most popular makeup brands. They have a tendency to favor larger retail outlets like chain pharmacies and department stores, so you might have more luck with independent brands when you’re just getting your foot in the door.
Certain companies like Sigma Beauty allow makeup resellers and retailers to apply online, but that’s not the norm. Most likely, you’re going to have to contact the makeup brand yourself and inquire. Contacts are often listed on company websites.
Contact a Wholesale Makeup Dealer
Many makeup companies have their own authorized makeup dealers. These dealers are responsible for selling wholesale products to retailers and cosmetics resellers, and often work in distinct regions. Conduct a search to find authorized makeup dealers and wholesalers in your area to start the process.
Attend a Trade Show
Trade shows are a huge part of the cosmetics industry. They give beauty brands the opportunity to showcase their products to potential buyers. They’re make or break for small brands looking to get placed in major retailers like CVS, Walgreens, Nordstrom and Sephora, but you can also attend trade these shows to try to secure a contract as an authorized reseller.
Get a Reseller’s Permit
If you’re going to become a legal, authorized makeup reseller and retailer, you will need to obtain a reseller’s permit from your state’s Department of Revenue. This will allow you to purchase products wholesale and not have to pay sales tax, since presumably, the sales tax will be passed onto your customers. It also allows you to collect sales tax and pay it to the state.
Before you get a reseller’s permit, you’ll need to make your business a legal entity (think: LLC, DBA or corporation) and get an EIN from the IRS. Also contact your local government to get a business license.
Choose Your Platform
If you’re going to be an authorized retailer, you have to actually have a platform to sell the products you’re purchasing. You can go the e-commerce or brick-and-mortar route. It depends on your contract with the company. Some cosmetics companies won’t allow online sales in their contracts, while others will.
- CBS News: Fake makeup can be an easy buy – and a health hazard
- Insider: These 7 companies control almost every single beauty product you buy
- Sigma Beauty: Become a Retailer
- Cosmopolitan: Get That Life: How I Founded a Cosmetics Company and Sold It to L'Oreal
- MIC: Meet the Resellers Making Thousands of Dollars Off of Kylie Jenner’s Lip Kit
- Shopify: How to Sell Makeup Online
- O'Brien Patent Solutions: Is It Illegal to Buy Products From Stores and Resell Them Online as New?
Mariel Loveland is a small business owner, content strategist and writer from New Jersey. Throughout her career, she's worked with numerous startups creating content to help small business owners bridge the gap between technology and sales. Her work has been featured in publications like Business Insider and Vice.