Demand for beauty and cosmetic products in Kenya has grown steadily over the last one decade. Within those few years, some of the small retailers in this line of business have grown into “supermarket” status and they have opened branches across the region.
Clearly, you don’t need rocket science to understand just how promising this industry is.
Today we are going to talk about how you can start your small cosmetics shop using the least possible capital. Remember the rule is: start small, grow with it.
*Where to Source for Cosmetic Products at Wholesale Prices*
There are many wholesalers in the country. The best prices are however to be found in Nairobi mostly in the downtown side of the CBD along Dubois Road, River Road or Munyu Road.
You can visit the city and take a window shopping walk particularly in shopping centres like The Perida Business Centre, Kamukunji Trading Centre or Best Lady Ronald Ngala.
Take your time until you find the best prices.
*What Are Some of the Fastest Moving Goods?*
Generally, the fastest moving goods out of a cosmetics shop are the items people use on a day-to-day basis. Think about ponds, hair food, gel, conditioners, shampoos, weaves, wigs, braids. And don’t forget bangles, earrings and necklaces.
*What Legal Fees Are Required To Set Up A Cosmetic Business?*
The only legal fee that is mandatory is the single business permit fee which is applicable to all brick and mortar outlets.
Otherwise you can start an online shop and be selling your items on Facebook, Instagram, WhatsApp groups or an ecommerce website to avoid these overheads.
*Finding a Stall*
You can start this business as a freelancer until you build a reliable client base. Later on, you can look for a stall in town (by town I mean any town not just Nairobi) – a permanent location or office is quite good because it boosts your credibility to customers and even financiers.
A good 10ft by 5ft stall in a busy street goes for Ksh.20,000 in Nairobi. Some landlords ask for a goodwill payment but some don’t.
*How to Grow Your Business*
During the first few months of the business you will need to be thoroughly aggressive to make a sale. So don’t just sit in the shop and expect that customers will come in somehow.
You will need to invest in your networks. Look for clients who work in offices and offer them door-to-door deliveries. You might even want to start your own small fashion blog so that you can tap into a wider market.
*How Lucrative Is This Business?*
Competition is quite stiff because of the sheer number of suppliers especially in major towns. But that should not worry you at all because demand is increasing steadily every day.
Most of the products sold in a cosmetics shop have a wide profit margin. Take for example sleek/mac ponds, kapriz and studs which have more than 200% return on investment.
Other fast moving products like the weaves and hairfoods have 20% return on investment.
So yes, this is still a very lucrative business. And don’t forget that you can create your own perfumes and start selling them in there as well.
*How Much To Invest*
If you start as a freelancer then a capital base of Ksh.50,000 will be more than enough.
However, if you want to open a stall or fully-fledged physical outlet then that budget may vary from as low as Ksh.100,000 in an estate like Makongeni in Thika to as high as Ksh.500,000 in Nairobi CBD.
*How Much To Expect*
If you are aggressive, you can make sales of up to Ksh.5,000 per day out of a small freelance or online based business.
The profit margin is 40% on average. So per month we can talk about Ksh.50,000 net profit.
If you have a small stall in a good location then the sales can go to as high as Ksh.15,000 per day but with a profit margin of 25% due to the high cost of running the business.
As I always say, there’s no marathon race that has ever been won by those who did not start the race. If you like the idea discussed above and you have what it takes to actualize it… then don’t wait to start… just do it.
By Justine Nyachieo
Business Man & Mentor