Should I expand into niche beauty retail? Tips for retailers and e-commerce sellers

The beauty industry is flourishing in 2024, courtesy of social media. Skincare and makeup products are going viral every other day, and millions across the globe are learning what niche brands have to offer with just a click. The desire to own the same products as one’s favorite influencers is as strong as ever, especially among the younger demographic.

If you sell beauty products, online or offline, you should definitely consider whether stocking more niche international products such as K-Beauty, J-Beauty, and French skincare products can change the trajectory of your store.? While the prospect may initially sound daunting, it is extremely important to be bold in your decision-making if you want to stay alive in this highly competitive industry.

Why should retailers and e-commerce stores stock niche products?

Experimentation is a major driver of the beauty industry, and most customers love the opportunity to try out new brands and expand their collections. Retailers and e-commerce sellers should take this into account and not limit themselves to big popular cosmetic brands.

Niche brands, especially those that are frequently discussed on social media or endorsed by content creators, are highly appealing to those who want to explore all that the beauty industry has to offer. Here are a few compelling reasons why you should stock niche products in your beauty-focused retail or e-commerce store:

1) Stay ahead of your competitors

Having a wide range of niche products available for purchase will give you an advantage in the market. Shoppers who closely follow beauty trends and are looking for non-mass-market brands that have gone viral will seek out your store once they realize they can depend on you.

Some niche beauty items are quite rare, or they are not imported regularly in certain countries. Being the exclusive store in such cases will indeed be quite rewarding.

2) Maintain a loyal customer base

Social media has played an important role in uniting people with similar interests, even if they live halfway across the world from each other. As such, certain products are wildly popular in the beauty community on Reddit, YouTube, and TikTok, irrespective of their country of origin. The demand for these is growing, and you can capitalize on it by stocking popular niche beauty brands such as RoundLab, an emerging Korean cosmetic brand. Customers will appreciate the opportunity to purchase niche products locally, and they will always come back to your store.

3) Excellent profit margins

When it comes to running a business, money is the deciding factor for every step you take. And, in this case, your initial investment will definitely pay off. Shoppers are willing to pay a bit more for exclusive international niche lines, especially those that are perceived as premium or luxury. You can set higher prices, which will also drive up your profits in a fairly short time. Exclusivity is a great bargaining chip, so make sure to broaden your portfolio at every chance you get.

4) Higher traffic due to enhanced brand image

Brick-and-mortar retail stores want higher foot traffic, and online e-commerce websites are hungry for engagement and clicks. Ultimately, both of these convert to sales. And, stocking niche products will aid in this regard either way.

Many find niche brands to be glamorous and sophisticated — qualities they will begin associating with your store if you choose to become a stockist. Having niche product lines on display will cement your image as a trend-setter and attract customers who are looking to update their beauty regimen.

5) Social media boost and more marketing opportunities

Niche products, especially those that are trendy at the moment or have gained a cult following in other countries, generate a ton of buzz on social media. This will boost your store’s visibility and attract more customers. Niche brands will make you more appealing to different consumer segments, and you will have the opportunity to advertise directly to them.

6) Long-term growth and success

Stocking niche beauty products and maintaining good business relationships with brands from across the world will be highly beneficial for your long-term business goals. You will always have something new and fresh to offer to customers, and returning customers equals greater revenue. Longevity in the beauty industry is a tricky concept, but diversification is the key to making your store indispensable to customers and resilient to market fluctuations.

Tips for stocking niche beauty products

If you have made up your mind about stocking niche beauty products, this section is for you. Diversification can be a rewarding venture, but you must take care to not take any undue risks. Here are some tips to help you successfully stock and manage niche products:

1) Research trends and customer demands

It is imperative that you conduct market research to identify the niche beauty products that are currently trending and in demand.? Visit discussion forums, read credible beauty blogs, and study industry reports to gain valuable insight into the state of the market. You can also refer to videos uploaded by popular influencers who are reputed to be honest and transparent. If you are open to collecting primary data, you can also survey your customers to understand their preferences.

2) Understand the legal aspects

You must look into the regulations and laws associated with stocking niche products for commercial reasons, especially if they are international. These usually differ from country to country. You have to ensure compliance with import regulations for cosmetics and skincare items. So, do learn about restrictions on ingredients and necessary certifications ahead of time. International products must also meet local labeling standards.

3) Prioritize quality

You do not want to take any risks with quality control when it comes to niche products. Your reputation will be closely tied to how you handle the launch of new brands in your store. You can choose to test new products personally, or you can reach out to a few existing customers for their help and feedback.? Once the niche products are available for purchase in your store, encourage customers to leave reviews.

4) Find and retain reliable wholesale suppliers

Consider reaching out to wholesalers like B Futurist who have access to plenty of branded products, and stock up your store with the latest and the best.

Sourcing products directly from brands has some advantages. You may be able to get exclusive and early access to certain product lines and a few special offers from time to time. However, you may have to fulfill high ordering requirements; they might require you to buy even unpopular stock. You may also face issues maintaining positive relations with multiple brands in order to maintain a good variety of products in your store.

Working with wholesalers has a lower barrier to entry, and you will not have to reach out to individual brands. And, if you want to try selling a new brand without having to make a long-term commitment, there’s no better solution.

5) Craft your pricing strategy carefully

We previously mentioned that it is possible to charge higher prices for niche products and brands based on their exclusivity. However, it is important to strike a balance here and not go so overboard that shoppers feel discouraged. Review your competitors and identify the pricing brackets that feel competitive but still profitable. You can even consider offering special discounts and loyalty programs to attract and retain customers.

6) Market the goods wisely

While product recognition may not be an issue any longer due to social media popularizing niche brands, you still have to connect with customers and let them know about this venture. Up your game when it comes to digital marketing and social media marketing, Collaborate with influencers and bloggers, or you can create educational short-form content to drive engagement.

7) Build an effective inventory management system

Since you may have to partner with multiple suppliers to keep your store well-stocked with international products, you must have a reliable inventory management system that can track sales, reordering schedules, and more. You should also follow seasonal trends, so you can make provisions to stock up accordingly.

8) Interact and engage with customers

When you start selling niche products, you should remain open to interacting with and getting feedback from potential and existing customers. You may have to answer many inquiries initially, but be patient as the process will pay off. If you are able to build a loyal community in a short period of time, you’ll know that your future as a stock of niche brands is secure.

9) Attend industry events

As social media puts it, the grind never stops. Attend beauty expos, trade shows, and related conferences so you can stay updated on recent trends, new products, and changing consumer preferences. You will also have the opportunity to network with a wide variety of people.

Success stories that will inspire you

Little Wonderland

Little Wonderland is a niche store based in the Netherlands that specializes in international cosmetics, skincare, and fragrances. It is one of the largest Korean skincare retailers in Europe and stocks both popular and lesser-known brands. The store claims to offer the biggest choice of K-beauty brands in Europe, including but not limited to COSRX, Purito, Innisfree, Klairs, Beauty of Joseon, Erborian, and Missha.

Yin Lu, the founder, set out to make K-beauty products more easily accessible in Europe when she realized that Western skincare had much to learn from its Korean counterpart. Korean skincare provided relief to her sensitive skin when everything else failed. Through Little Wonderland, Yin wants to teach shoppers about the benefits of Asian beauty products and offer them guidance.

Nykaa

One of the biggest beauty retailers in Asia, Nykaa stocks a wide range of niche brands on top of industry-standard & mass market brands. Nykaa’s portfolio has been growing exponentially in recent years, and they have bagged exclusive contracts with many international and niche brands. They stock luxury beauty brands like YSL, Dior, and Gucci; K-beauty brands like Innisfree, COSRX, and Laneige; American drugstore brands like Colourpop, ELF, and Flower Beauty; premium brands like Charlotte Tilbury, Fenty Beauty, and Bobbi Brown; and more.

In conclusion, yes, you should definitely start stocking international products in your beauty retail or e-commerce store if you want to remain ahead of the competition and grow your customer base in the coming years. The tips included in the article will prove invaluable to your journey.

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