How to Start Selling Cosmetics Online and Grow Your Business

Did you know that the global revenue of the cosmetics industry is projected to steadily rise from 2024 to 2029, with a total increase of $23.9 billion, representing a 22.04% growth? Most of that revenue will be generated in the United States. All these data point to the fact that it is a good time to learn how to start selling cosmetics online and make money. Whether you’re sourcing cosmetics to sell or creating original formulations, a stylish product line helps your cosmetics business attract customers.

Legal Foundation and Entity Formation

The first step is to choose which legal structure is right for your business. Use one of our preferred service providers to get started with your Tax ID Application. You can select your entity type from the following options:

• LLC (Limited Liability Company)
• Sole Proprietor / Individual
• Partnership
• Corporation or S-Corporation
• Non-Profit Organization
• Trust or Estate

Applying for a Tax ID (EIN) Number is essential. You may also need services like Bookkeeping, DBA (Doing Business As) registration, and a Payment Processing Solution to ensure your business is legally compliant.

Setting Up Your Online Store with Shopify

Build a home for your cosmetics and a destination for customers using Shopify’s store editor. Creating a website is simple, with endless ways to express your brand. Use the drag-and-drop store builder to start a beautiful cosmetics store without coding or design skills. Choose from over 70 customizable and responsive themes to build your unique business and brand.

To enhance your store, consider these features:

• Choose a mobile-friendly theme and generate product descriptions with Shopify Magic.
• Add popular features like customer reviews and buy now buttons.
• Simplify product selection by linking your store to wholesalers and suppliers through third-party apps, ensuring your bestselling cosmetics are always in stock.
• Make your cosmetics easy and safe to buy with Shopify Payments, which supports all major payment methods.

Shopify Subscription and Payment Rates

Shopify makes it easy to start an online store and provides the tools you need to succeed. Below are the starting rates for 3rd-party payment providers based on subscription levels:

• Basic Plans: Card rates starting at 2% for 3rd-party payment providers.
• Intermediate Plans: Card rates starting at 1% for 3rd-party payment providers.
• Advanced Plans: Card rates starting at 0.6% for 3rd-party payment providers.

Selling Beauty Products on Amazon

Selling beauty products on Amazon can be very profitable if you know what the best-sellers are and how to get your listings noticed. You first need to be established as an Amazon seller. However, there are still a few brands within this category, as well as subcategories, that require an application process before you will be allowed to sell them. This process is called ungating.

Subcategories that often require approval include:

• Luxury Beauty: Includes top brands like Elizabeth Arden or Butter London.
• Professional Beauty: High-quality products found in salons, spas, or dermatology offices.
• Indie Beauty: Emerging beauty brands that are independently owned.

To unlock the gate, you will need to first get approval by providing proof of a valid FDA registration, supplying a manufacturer invoice from the last 180 days, or providing your GMP (Good Manufacturing Practices) certificate.

Benefits of the Online Business Model

Learning how to start selling cosmetics online can be a smart and easy move once you understand the benefits. One of the most significant benefits is the ability to reach a global audience. This means you can attract customers from various regions and demographics. Additionally, running an online cosmetics store is often a more cost-effective business than a brick-and-mortar shop. There’s no need for a physical storefront, which means you can save on rent, utilities, and in-store staffing costs.

Another standout advantage is 24/7 Availability. An online shop is always open for business, meaning your customers can browse and purchase products at their leisure round the clock. Ecommerce platforms also provide features for tracking user interactions. With this data, you can know what products are popular and why customers choose them, allowing you to make informed decisions about inventory and marketing strategies.

Marketing and Growth Strategies

You want customers who are interested in cosmetics like yours to discover your brand. Drive traffic to your store using Shopify’s built-in SEO and blog tools. Promote your cosmetics with Google Performance Max campaigns, and build an audience using automated Facebook and Instagram ads. With Shopify, you can also promote your cosmetics on compatible social platforms and marketplaces, reaching a wider audience globally. Consider selling your cosmetics to local retail stores—building relationships with other sellers can unlock new sales opportunities.

As your cosmetics business grows, you can manage storage and returns through dedicated fulfillment networks. Process your cosmetics orders quickly with automated label printing and tracking to keep customers happy.