UNDERSTANDING HOW COSMETICS BUSINESS WORKS
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.
Remember the rule is: start small, grow with it. Start your small cosmetics shop using the least possible capital.
To succeed in any business, you need to know how it works and how you can win the competition. You can start by researching online and talking to people buying beauty products. Understand what potential customers want and the figure out how best you can deliver.
Also, talk to those in the business, find out what they are selling and at what price. Also, understand the market gap. Then find ways you can address the problems in the cosmetics industry.
You can succeed in the cosmetics business if you know the tricks and risks involved. It becomes easy to navigate your way and grow your business.
The first step to starting any business is to understand how it works. Fortunately, there are a few ways to do that.
You can start by studying everything you can online. Look up for cosmetics sellers and dealers online, and learn everything you can about them.
Where are they from? Where do their products come from? How many employees do they have? What does their distribution channel look like?
Next, look for the most popular beauty stores in your area and study them, too. Get familiar with their marketing, their staffing, their product selection… basically, your goal is to learn literally everything you can about the most successful cosmetics businesses in your area!
Then – and here’s the fun part – go buy some products from them! Experiment. Play. Have fun and see what kind of magic you can pull off by giving your friends makeovers.
But the absolute best way to learn about the industry is to work in it.
Remember those stores you were studying? Go get a job at one of them! Learn their sales tactics, how they target customers, how they establish their sales projections, how they handle their ordering.
Know who their suppliers are, and what kind of prices they pay.
And learn as much as you can!
If you want to start a cosmetics business from home, then start researching which company you want to work under e.g Forever Living
This is a GREAT option for those with limited budgets but huge social networks and people skills!
Once you have decided on which model you are interested in pursuing, whether you want to open a brick and mortar cosmetics store, start a home based cosmetics business, or even create one online, then it’s time to create a plan.
*What Legal Fees Are Required To Set Up A Cosmetic Business?*
Running a cosmetic business does not require special licenses.
The only mandatory license is a single business permit. The license can be obtained from the relevant county government offices.
The fee charged depends on the size of the business, the county government at stake and location within the county. Generally, the annual fee ranges from Ksh.3,000 to Ksh.15,000.
Otherwise you can start an online shop and be selling your cosmetics items on Facebook or an ecommerce website to avoid these overheads.
*Select a Suitable Location*
Location determines the success of any business. It is best to get a stall where you can display beauty products and has a high influx of people.
Get a storefront where there is high foot traffic. You can also start your business inside a mall, plaza, or in a kiosk. Look what works best for you and ensure that your option is within your budget.
Essentially, look for a visible place from the street, has a parking area, easy to access, and has high foot traffic.
Also 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.
*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.
To get your invested capital back in a short time, here’s what to sell in your cosmetics store. They move like wild-fire.
• Makeup and Skin Care Products – Stock brands that are loved. You can get this info from your suppliers
• Quality Hair extensions
• Haircare Products
• Beauty Accessories
• Body lotion
• Conditioners
• Relaxers
• Deo sprays
• Hair lotions, food and sprays
• Srub
• Soap
• Beads
• Artificial Nails
• Removers
• Perfumes
Did I miss anything? You need to stock that too.
*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.
If you don’t have so much time to window shop for the best prices then you can just make a direct order from this recommendation list.
*Best-lady Cosmetics*
Address: Ronald Ngala
Phone: 0740470002
*Beauty Wholesale Kenya Limited*
Address: Jubilee House, Ground Floor, Mama Ngina St, Starehe
Phone: 020 2224441
*Reones Beauty & Cosmetic Supplies*
Address: Shop # B1 & B2, Beaver House, Tom Mboya Street, Opp. Eureka Highrise Hotel Basement Floor after Troy Chemist (Same building with Beauty Point College Nairobi)
Phone: 020 2185076
*Mega Wholesalers*
Address: Fourteenth St, Nairobi
Phone: 0720 667958
*Mac Cosmetics*
Junction Mall Parking Hall, Ngong Rd, Nairobi
Located in: City Walk – The Junction
0714 949251
*Beauty Options*
Address: Old Mutual Building, Ground, Kimathi St, Starehe
Phone: 0717 451141
However, the best way to go around the beauty business & to actually make profits would be to source for the cheapest merchandise.
If you have time, Visit Uganda to compare prices.
*Products in the market.*
There are different types of products in the market.
1. Original – genuine products from the original manufacturer distributed via official channels.
2. ‘Backdoor’ original– genuine original products from the manufacturer but distributed through unofficial channels.
3. Original but independently distributed – it occurs mainly with international brands that are not officially represented in the country.
4. Generics – cosmetic products with the same ingredients as the original one but with different brand names.
5. Fakes – it refers to counterfeit products. Most of these products are common e.g perfumes.
*How to Stock Your Beauty Shop without Spending So Much Money*
Because there is so much demand for beauty products, there is a certainty that your beauty shop will scale so fast that you may not meet some of your orders.
But remind me again, what’s the reason why you wanted to start the cosmetics business?
Is it to make money?
Then you must make sure that all orders are met.
One of the easiest ways to ensure that you have enough stock to serve your demand is by partnering with cosmetics manufacturers & wholesalers.
Show them that you can move their products fast and they may send to you free consignment to pay when you sell.
Some companies allow monthly payments. Others insist on weekly payments.
The best part about this deal is, you only pay when you sell. But you too have to move products faster & build an empire.
So, be enthusiastic, sell the most products & make prompt payments.
Written By
Justine Nyachieo
Business Man & Mentor
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