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10 Small Business Opportunities in the Cosmetics Industry

The cosmetics industry is a recession-proof industry that generates billions of dollars a year in sales worldwide.
According to an estimate by Ernst and Young, the industry generated a whooping $245 billion in total revenues in 2012. And cosmetic sales are estimated to continue to grow in both the United States and other global markets, as many consumers feel that beauty products help in achieving social and economic goals.
Before now, the cosmetics industry used to be dominated solely by big, global brands like Unilever and Avon. But now, many small and medium-sized companies are also taking their share of the ‘pie’. If you are passionate about beauty and fashion and are looking to start your own business, then starting your own cosmetics-related business might be the best decision to make. There are numerous business opportunities within the industry. And here are 10 of them.

10 Small Business Opportunities in the Cosmetics Industry

1. Cosmetics retail-: Since cosmetics are always in huge demand, you won’t go wrong by opening your own cosmetic retail store. To succeed at this option, you need to conduct extensive research before starting out. This will help you figure out what products are selling in your locality as well as important information about your target customers, such as their income levels and preferences. Competition is another factor you need to study before opening your retail store.
2. Cosmetics wholesale distribution-: Provided you can acquire the huge startup capital required, you can go higher in the cosmetics production and consumption chain by starting a wholesale cosmetics business that sells to retailers rather than end consumers. This option is equally lucrative, but it can only do well in a locality where there are many cosmetics retail stores. In fact, starting a wholesale cosmetics business can be a smart way to avoid the fierce competition among retailers in your locality, and take advantage of it, instead.
3. Homemade cosmetics-: Do you pride yourself on being able to make unique and effective skin care or makeup products? Then you can start a homemade cosmetics business. Since, you will be running your business from home, the required startup costs will be minimal. You can sell to retailers in your locality, open your own store or kiosk for selling directly to consumers, or open an online store for selling to consumers over the internet.
4. Makeup artistry-: The demand for makeup services has always been on the high. Many people love to look beautifully different, but are unable to achieve this themselves. This leaves them with no other choice but to hire makeup artists whenever they need to wear that special look that gives them satisfaction. Also, makeup artists are hired in fashion outfits, modeling agencies, and on film locations. So, if you are really talented at makeup artistry, there are huge opportunities for you.
5. E-commerce-: Most consumers now prefer buying things they need over the internet rather than go out of their homes to local stores. Since cosmetics are among the items most commonly purchased online, starting an e-commerce store that sells cosmetics is a smart idea. You don’t even have to handle the shipping; you can accept the order, take your cut, and then forward the order to a retail store, which handles the delivery of the product. This model is known as drop shipping.
6. Affiliate marketing-: If you have a huge online audience in the form of blog visitors or newsletter subscribers, you can make money by promoting cosmetics products to them as an affiliate. Each time, someone purchases a product through your affiliate link, you get a commissions from the actual seller of the product. The difference between affiliate marketing and the drop-shipping model explained above is that you are not required to receive orders at all. Rather, you will direct potential buyers to the seller’s website.
7. Raw materials-: If you live in a city or state where cosmetics production companies abound, then you can take advantage of this situation by starting a business that supplies raw materials to these companies. However, before taking a plunge, you need to figure out which raw materials sell the most, which ones are readily available to you as the supplier, and which ones you have facilities to handle. You can start with one or two raw materials and expand your scope as your business grows with time.
8. Tutorials/courses-: If you are a guru when it comes to makeup artistry or any other cosmetics related service, a smart way to make money is to organize tutorial sessions and short-term courses for training those who are interested in becoming experts in those services.
9. Consulting-: Do you have several years of experience in the cosmetics business? Do you have a number of successful cosmetics related businesses under your belt? If you just answered ‘yes’ to any of these questions, then you can make even more money by starting a consulting service. For example, you can advise owners of cosmetics related business on how to grow their business, how to market their products and attract more customers, and so on.
10. Blogging-: If you have good writing skills and a passion for everything cosmetics, then you can start a beauty blog, where you will share helpful information related to cosmetics and their use. With time, you will build an audience of loyal readers and subscribers. Once your audience becomes large enough, you can start making money by promoting cosmetic products as an affiliate or selling advert space to cosmetic product retailers.

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