101 Beauty Distribution Guide For Your Brand
In the beauty industry there are two types of distribution: direct and traditional. In short, direct distribution does not have intermediaries as you literally have to sell directly to accounts, recruit and manage your own team(s), and generally your marketing and sales cost will be higher due to the fact that you’re not paying for a distributor; whereas traditional distribution includes sales consultants, independent sales reps and offers marketing support to assist with accounts, etc. It also includes the cost of warehouses, shipping to their accounts and in managing re-orders.
According to the Global Cosmetics Industry, “many emerging brands don’t appreciate the value traditional distribution offers. The bigger margins are sexy, but they fail to account for the high cost of marketing a product. Often, the costs of direct distribution can be higher than what intermediaries in traditional distribution ask for. Don’t rule out traditional distribution unless you know it won’t benefit your brand”.
Here are some things you need to consider to get your products on the shelves in store and/or online.
A distribution Strategy
Have you thought about how you’re going to get your product out there to your distributors, customers and retailers? If so, have you thought about which retailer out there aligns with your brand, your price point and your marketing? These are some of the things you should consider.
What is the average price point of your preferred retailers? If pricing is too high or low, it will be harder to get a buyer to add your brand to their inventory. Know their customer and create a bulletproof presentation that proves their customer wants your product. Be sure your price point includes industry-accepted margins for the retailer and any intermediaries.
Develop marketing personas so you know exactly who you’re selling to. What brands are they using to solve their problem? What are their emotional drivers? How do they respond to technology and marketing? What questions do they ask before deciding to buy?
What seems like an exclusively creative endeavor has an impact on your distribution strategy. What are the packaging requirements for your preferred retailer list? Are there certain types of packaging that sell better than others? The short answer is yes.
Do competitive research. Buy your competitors’ products in-store from retailers on your preferred list and, with a critical eye, identify the packaging trends. Ask sales staff what they look for in packaging. They’ll tell you what works and what doesn’t.
Who are the people involved in the decision making to add brands to inventory? There are several people who participate in the decision. Know who they are and what’s most important to them.
If it’s a merchandiser, show how the brand will be merchandised in their store. If it’s the education manager, show how you plan to train store staff about your brand and products.
What tools will be made available to the sales team? Sales kits, full-size or deluxe samples, etc. are absolutely essential to sales team success.
What tools will be available to retailers to market your product in-store or online? This can be more complicated, as it will include marketing tools you provide (e.g., product images, product copy, launch promotions), as well as marketing tools retailers use to drive sales, e.g. end-caps, catalogs, dedicated e-blasts, etc.
How will you pay for these opportunities? Nothing’s more exciting than finding out that you landed a key account and they want to feature you on an end-cap. Then you find out the end-caps will cost £35,000 or more. Can you afford to participate?
Who are the industry experts you can reach out to for consultation and recommendations? These individuals know more than the business of beauty, they know wholesale buyers likely to be interested in your brand.
Get to know who they are, enlist their expertise and you’ll be on your way to developing a distribution strategy with a higher level of confidence.
Now that you have your distribution locked down, it’s a good time to resume product development, packaging, pricing, marketing and other pre-launch activity.
If you'd like to know more or if you simply want to speak to someone, contact us at DiademBC for a FREE 1-1 call.
Read our previous blog here, where you can find out more on how to use social media effectively to launch your brand. You can also view our social media growth plans here if you want us to takeover you accounts to grow your brand for you.