How to Start a Beauty Supply Store

by Mariel Loveland ; Updated November 29, 2018
Variety of assortment of modern cosmetics store

There’s a reason Forbes called the beauty industry a “gold mine for self-made women.” The demand for beauty products will exist for as long as humans have hair, skin and a desire to express themselves. It shouldn’t be surprising that this hotbed for entrepreneurialism pulls in $445 billion a year. The top brands can sell for billions. In 2016, L’Oreal bought IT Cosmetics for $1.2 billion, and owner Kern Lima became the 41st richest self-made woman in America.

Launching a beauty supply store can be a profitable venture for women and men. It doesn’t even require a lot of cash depending on your business model. Plenty of business owners start small with a beauty supply online store and move on to larger brick-and-mortar shops. Here’s how you can get started.

Find a Niche

The beauty space is a large one. Some supply stores opt to focus on wigs and extensions, while others like Sally Beauty choose to offer salon-quality products for professionals. If you're opening a beauty supply store, your success hinges on finding the right market. Spreading yourself too thin could confuse customers and increase your operating costs. Demetrius Chamblee, who launched Madams Beauty Supply with his wife, says it’s always best to work with what you know. Chamblee had a background in business, while his wife spent a decade as a cosmetology teacher. She knew the beauty world, and he knew the business world, so starting a beauty supply store business was a perfect mesh of the minds.

“We looked at what we were good at,” he said. “We looked at that and did a lot of research to see who are the customers in this market, and can we relate to them? Can we create win-win situations for them? And we could because we know the industry.”

Create a Business Plan

A business plan is the beating heart of your business, and with so many roads to take in the beauty world, it’s important to have a rock-solid plan. Consider whether you want to launch a franchise or start from scratch. Where are you getting funding, and how do you plan to generate revenue? What products will you sell, and how will you operate? Are you an online endeavor or a brick-and-mortar store? Write it down to map out your plan to solvency.

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Evaluate the Competition, Then Do It Better

A beauty supply store can only succeed if there’s a need for a beauty supply store. The best way for this to happen is to identify a hole in the market. You probably wouldn’t want to launch a beauty supply store next to a Sephora, right? Kristen Strain, the founder of Badgerface Beauty Supply, admits that being unique is the key to success.

“There are lots of well-traveled roads in the beauty market, but a memorable branding style, voice or product offering is going to turn people's heads and get them on board,” she said.

She wasn’t wrong. Strain launched her business after realizing that the beauty products in drug store aisles were filled with parabens, petroleum byproducts and things most of us probably couldn’t pronounce. Instead of settling for what she considers “cancer-in-a-jar, store-bought lotion,” she decided to launch a store focused on natural products. After injecting a little sass and a few curse words, Badgerface Beauty Supply was born. It’s honest, it’s blunt and customers know exactly what they’re getting.

Cult beauty brand Jeffree Star Cosmetics is also a prime example. Star launched his company after identifying a particular hole in the beauty industry: There was a major lack of quality liquid lipsticks. He pooled his savings, spent six months perfecting the formula and launched three liquid lip shades in his online store in 2014. Since then, his brand has been featured in Refinery29, PopSugar, Teen Vogue and Yahoo Beauty. He’s amassed 11 million YouTube subscribers, and his products regularly sell out despite some unfortunate internet drama with reality star-turned-beauty guru Kat Von D.

Find a Location or Opt for a Beauty Supply Online Store

If you're opening a beauty supply store, location is everything. You might opt to launch an online-only business or purchase a brick-and-mortar storefront. Either way, the amount you spend on a location (which very well could be a website) should be outlined in your business plan. So, how do you go about finding the perfect place?

The Chamblees were able to cut costs when starting a beauty supply store business because they opted to circumvent a real estate agent. “We went out, did our footwork and looked on the internet,” Chamblee said.

Other business owners may opt to splurge and find a realtor who specializes in commercial real estate. Regardless, wherever you pop up shop should be free of direct competition. If you want to sell wigs, don’t put your store next to a wig shop. If you want to sell makeup, steer clear of a Sephora.

Purchase Your Stock

Every beauty supply store needs stock. If you’re not opening a beauty supply store to sell your own branded products, it’s a good idea to contact a wholesaler or buy in bulk. A quick web search can provide a number of wholesale vendors, but to find the most reliable vendors with the best quality, you may want to visit a trade show, which lets you see the product for yourself.

If you’re unsure about working with a wholesaler, you can usually request samples. Plenty of indie beauty brands also offer products at a wholesale rate to retailers, so you may want to contact brands you already like or use. Make sure to read reviews and check out any information about a company on the Better Business Bureau website. Selling a poor product will give your business a bad reputation.

According to Tara Atwood, who founded Amber Blue Skincare in 2012, it's important to offer more than just a product to customers. You need to also offer an experience. "The experience is so much more important than just providing products on a shelf," she said. "An experience could be how sales representatives or the website provides education on products."

Handle the Legal Stuff

There are a few legal things most businesses need to get out of the way before they launch. Starting a beauty supply store business is no different. You’ll probably need to get a business license from your local clerk’s office or town hall. You’ll also need to register your business with the IRS. Though you can always handle this process yourself, Chamblee recommends hiring a professional.

“If you’re going to be starting a business, have a lawyer and have an accountant involved,” he said. “That way they understand the legal and business terms you’re going to be faced with. My lawyer was able to see past a lot of things we weren't able to see as business owners.”

Get to Marketing

Marketing is essential to running a successful beauty supply online store or brick-and-mortar business. Many beauty brands opt to use social media, where you can run paid ads targeted toward local consumers and beauty lovers alike. Instagram, YouTube and Pinterest are increasingly popular among beauty brands since their products lead to a visual result, and customers are more likely to buy a product if they can see a video of it in action. You can also try sales, promotions and affiliate marketing (where online influencers get a small commission for referring online sales).

No matter which method you choose, social media consultant Ryan McCarthy recommends sticking to a consistent content schedule. "Find out what times of day, days of the week, etc. garner you the most interaction," he said. "Humans are creatures of habit. Consistency in your posting schedule can turn your content into a must see/read."

About the Author

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 Insider and Vice.

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