If we talk about selling cosmetics, the first thing that comes to mind is that it is quite profitable, since every woman almost every month buys some cosmetics for herself, and let’s not forget about gifts from men. But there is another side to this business – competition. The presence of large cosmetic stores in large cities, with huge advertising budgets, sales programs, and other things, significantly complicates the start in this business for a novice businessman. In this article we will talk about how to properly start a business plan for a cosmetics store and not go broke. Let's discuss all the main points of this direction.
Outlet format
If you want to start a business selling cosmetics in a small town, then you have every chance of success, you need to make your store a little better than your competitors and offer people a more convenient service and customers will definitely choose you. But in big cities, it is almost impossible for a small entrepreneur to get ahead of large retail chains, which is why we recommend choosing a narrow specialization and only in this case will you get your clients.
Examples of narrow niches:
- natural cosmetics without chemicals. Yes, the cost of such products is higher than conventional cosmetics, but recent years there is a trend towards a healthy lifestyle and that’s it more people moving towards healthy eating and the use of cosmetics based on natural elements. In large cities, this is a very promising direction, especially since this niche can also be used to launch an online cosmetics store, which will increase sales.
- cosmetics for children. There are a huge number of different creams, shampoos and other cosmetics for children on the market. Open specialty store and carry quality goods, there will be customers no matter what. In this direction, the main thing is correct advertising.
- sale of a certain group of goods. For example, perfumes or nail polish. At the same time, you should have as wide a range of these particular products as possible.
If you are launching in a small town, then you need to stock all groups of products and create a one-stop cosmetics store.
Place and premises
You will also need to tinker with the choice of place for trading. Free-standing stores are practically a disastrous solution for a novice businessman. To attract buyers, you will simply need huge investments in advertising, which at first, as practice shows, is not there.
The best solution would be to rent a small retail space in a popular shopping center. Yes, you will pay more for rent, but you will immediately get buyers and sales.
The area of the room should be starting from 20 sq.m. and more. Often, a standard retail outlet of this type has a size of 30 – 50 sq.m.
Another advantage worth adding is that when renting in a shopping center, you will not need to invest money in renovating the premises, which is also important.
Equipment for a cosmetics store
The lion's share of the budget for furnishing the premises will be taken by display cases and shelving.
Below is a list of the basic furniture and equipment you will need:
- glass and wooden shelves. The style of shelves will depend on the format of your store. If it is healthy cosmetics, then wooden shelves self made will come in handy. The style must be adhered to, as your clients will definitely pay attention to it. The cost of shelves starts from $15/piece. and higher.
- shelving – from $40 per section.
- special display cases with scrolling – from $100/piece. They are used to present the most popular solutions or new products.
- lighting for the store. Correct lighting– this is a very important part in this business. All display cases and shelves must be illuminated - from $800.
- a bright, eye-catching sign - from $100.
- table and 2 chairs for seller and consultant - $200.
On average, you will need about $1800 - $2000 for equipment.
Product range
To draw up the correct assortment map, you need to carefully study all offers on the market from wholesale suppliers. Contact them and find out at least the approximate pricing policy of a particular brand. Your assortment should include both professional cosmetics manufacturers and newcomers to the market. Important rule! Do not forget to ask about the availability of product quality certificates; if they are missing, we do not recommend purchasing this product. You are planning to work in the health and beauty industry after all, so quality should come first.
In terms of pricing, you should also have variety so that you can offer both cheaper solutions and more expensive options. Clients will be different, so all this should be.
Recruitment
Employees need to be recruited based on the types of products you will sell. So, for example, to sell natural cosmetics you can hire women aged 35 and above. Customers will have more confidence in them than in young salespeople. To sell nail polish, for example, it is still advisable to hire the younger generation.
From the staff you will need:
- 2 salespeople with a shift work schedule;
- 2 consultants also, with a shift work schedule.
Vendors can clean the premises. Salaries for staff are based on sales volume.
You can either do your accounting yourself or outsource it.
You can also budget for the development of an online store and its subsequent promotion.
Financial plan
Starting investments:
- purchase of equipment - about $2000 - $3000;
- registration as an entrepreneur - $250;
- purchase of the first batch of goods - $15,000 - $20,000.
Monthly investments:
- rental of premises and public utilities– from $500;
- salary - $2000;
- taxes - $250;
- advertising budget - $400.
In total, at the start you will need to invest about $25,000.
The average customer check is $8 - $9. About 25 sales are planned per day. You can earn $5,500 - $6,000 per month. If you subtract monthly expenses, then we get net - about $2200.
The payback period will be 12 months or more.
People, having taken care of themselves, their appearance, their appearance, want to look “brand new”, and are ready to achieve these goals without sparing financial resources.
There are several ways to organize a business selling cosmetics:
- Cosmetic store;
- Distribution of cosmetics using direct marketing method;
The second way has a higher level of profitability and requires less financial investment in starting a business.
A cosmetics business has three main goals that should be followed in planning:
- Product search;
- Possibility of selling additional products, accessories, providing consultations and cosmetologist services;
- Compiling and filling a client base, which will allow you to maintain strong and long-term relationships with regular customers;
An important point in a cosmetics business plan is that in addition to knowledge about the market, you will also need economic and financial knowledge.
The basis of the business plan will be cosmetics, which you and your employees and consultants will need to know absolutely everything about. In addition, cosmetic products must meet standards and be certified, because By selling low-quality products, you expose your business, yourself, and, first of all, your customers to danger, because low-quality cosmetics can significantly harm the health of the consumer and cause both him and you a lot of problems and troubles, which will subsequently have a detrimental effect on the success of sales cosmetics.
The business plan must also reflect the investments, costs and income of the activity.
The goal of a cosmetics store is to satisfy the buyer's desires with quality products.
Downloads
Which includes brief information about the point of sale, the main activity. Investment amount – 1 million rubles. Attention is paid to calculations for personnel, fixed assets and basic economic indicators of activity.
In addition to a cosmetics store, you can open a beauty salon. Very detailed plan beauty salon With detailed list all services provided and further expansion. Present detailed calculations throughout the list necessary equipment, sales plans, bonuses and other business factors.
Aimed at describing basic information and problems of this business. Best suited for beginners in this business. The downside is the absence of any calculations for financial and economic activities.
An example of opening a branded luxury cosmetics store, as well as providing the services of a beauty salon with staff trained abroad or by specialists. The example is full of all kinds of information and calculations, which can greatly help you. The advantage of this project is the description of risk factors.
Set out accessible language and terms that will be understandable even to people who do not have much knowledge in the field of cosmetics. A business project can serve as a template for writing your own, and diagrams can help you better understand the business.
* The calculations use average data for Russia
From 580,000 ₽
Starting investments
300,000 ₽
60,000 - 100,000 ₽
Net profit
10 months
Payback period
Cosmetics are a popular product on which you can always make money. This is an excellent option for a women’s business that even a beginner can handle. What do you need to open a cosmetics store?
Selling cosmetics and perfumes can be a profitable business. Every year the beauty industry develops and becomes popular, new cosmetic products appear - all this contributes to the growing demand for cosmetics and perfumes. According to sociological surveys, women are willing to spend 15% of their income on cosmetics every month.
The Russian cosmetics market has expanded significantly in recent years: today the number of retail and production organizations segment is growing not only in large cities, but in small populated areas. This entails increased competition, and therefore you need to consider many factors before opening your business.
To open a cosmetics store from scratch, you have to, firstly, choose a specialization, and secondly, solve all the main stages that all retail entrepreneurs face. Namely: register a business, find a suitable premises, arrange a retail space and purchase equipment, form and purchase an assortment, hire employees. Next, we will consider all the tasks in detail.
How to choose the specialty of a cosmetics store
At the preliminary stage, you need to decide on the direction of the store and its assortment. This choice directly depends on the amount of investment, location and ability to supply a particular product. Some stores offer wide range, while others, on the contrary, choose a narrow segment and specific products. In large cities there are not only single cosmetics stores, but also entire retail chains. Therefore, it is better to open a store there with a narrow focus, forming an assortment of unique offers. This will allow you to compete with large chains. If you are planning to open a cosmetics store in a small town, then it is better to give preference to the classic store model in order to reach a wide range of target audiences.
What else you need to pay attention to when choosing the direction of a cosmetics store:
Location. For example, if a retail outlet is located in a residential area, it is more appropriate to focus on a wide selection of products and affordable prices. In the city center you can open a luxury cosmetics and perfumery store.
Competition. Trade in unique goods will be successful only in the absence of direct competitors.
Main formats of cosmetics and perfumery stores:
- Elite cosmetics and perfumery store. The target audience is clients with above-average income. Products offered must be high quality, belong to famous and luxury brands. Therefore, such a store will require serious investment. It is best to open a luxury cosmetics store in the city center or in prestigious areas.
Professional nail cosmetics store. Target audience: nail design studios and private manicurists. To open you will need small area, even an island in a shopping center will do, and minimum costs. Such a retail outlet may be part of a salon where manicure and pedicure services are provided or located next to them.
Natural cosmetics store. Natural cosmetics is in very high demand due to the popularity of the topic of environmental friendliness and a healthy lifestyle. But to win your customer, you will need to devote special attention advertising. The topic of environmental friendliness is popular.
Brand store of decorative cosmetics. You can become an official representative of a famous brand. Today, many cosmetic brands offer cooperation. The advantage of this idea is that from the very start your business gets a recognizable name and a good reputation. However, the downside is dependence on a partner and competition - if you want to cooperate with any brand, you may find that there is already a representative in your city. To open such a store, you need to enter into an official agreement confirming the dealership.
Medical cosmetics store. These stores specialize in pharmaceutical and medicinal cosmetics. For point of sale will be required small room or a department in a large pharmacy supermarket. It is recommended to locate a medical cosmetics store near pharmacies, health centers, cosmetologist’s offices, and dermatological clinics.
Shop of Arabic or oriental cosmetics and perfumes. Recently, cosmetics from a certain country have been gaining popularity. For example, Korean or Japanese cosmetics stores, an Arabic perfume boutique, etc. Trade in specific goods requires the availability of appropriate suppliers. This is the main difficulty. The advantage is the opportunity to stand out in the market among competitors and attract your target audience.
Ready ideas for your business
Professional cosmetics store for makeup and makeup artists. The retail outlet focuses on highly specialized specialists providing makeup and make-up services. It is advisable to locate a professional cosmetics store next to beauty salons. You can expand the range professional equipment and tools.
Handmade homemade cosmetics store. Handmade goods always attract the interest of buyers. But due to the specifics of production, the choice of means is often limited. Product certifications should also be carefully checked. Therefore, in in this direction Some difficulties may arise. The most popular product in this segment is soap making.
Store of natural ecological or organic cosmetics. Today, ecological and organic cosmetics are very popular. Natural products are often unreasonably expensive, but are still in high demand. Therefore, the sale of such cosmetics is considered a profitable business.
As you can see, there are many directions to open a cosmetics store. Choose what you understand and where competition is minimal. Today is the most the right way win your consumer - sell cosmetic brands that are not represented or are almost unavailable in Russia. You need to offer the consumer something exclusive, and then he will be interested in your store. Well defined target audience and assortment is the basis of your success.
Legal issue in opening a cosmetics store
Before taking any action to open a store, you should understand the legal nuances. The first step in opening a cosmetics store is registering a business. You can register as an LLC or individual entrepreneur. For a small store, an individual entrepreneur will be enough, but for large ones it is better to choose an LLC. When registering, you will need to indicate the activity code according to the OKVED-2 classifier: 47.75.1 “Retail trade in cosmetics and perfumes, except soap in specialized stores.”
As for the taxation system, the simplified tax system or UTII is suitable. The last option is convenient if the area of the room is no more than 150 sq.m. But for a cosmetics store you won’t need any more premises.
No special permits are required to conduct retail trade. To open a store, you need to collect a package of documents, which includes a sanitary and epidemiological conclusion from Rospotrebnadzor, permission from the fire inspectorate, and regulatory documents for the store. The entrepreneur must prepare a lease agreement or property documents, a sanitary passport of the premises, an act from the BTI confirming the commissioning of the premises. Contracts for the removal of solid waste, disinfestation and deratization of the premises will also be required. In addition, you need to open a bank account and purchase cash register, which is subject mandatory registration at the Tax Inspectorate.
Ready ideas for your business
In general, registering a cosmetics store is quite simple, and at this stage no difficulties should arise. It is also necessary to remember that all cosmetic products must be certified, and when concluding contracts with suppliers, it is necessary to check documents and pay attention to the products’ compliance with current requirements.
Since July 2012, the Technical Regulations of the Customs Union have been in force, which detail the procedure for mandatory certification of cosmetic and perfume products, as well as requirements for the preparation of documents for goods, and the application of labeling to products. It also describes the requirements for packaging, which should contain comprehensive information about the product.
Product certification is carried out by special state laboratories under Rospotrebnadzor. The generalized range of goods subject to mandatory certification is as follows:
cosmetic products – products that help care for the skin of the face, body and hands, hygiene products for oral cavity and teeth, hair and scalp care products;
decorative means- everything that is used for makeup, nail cosmetics
perfumery - perfume, eau de toilette, deodorant, cologne;
toilet soap- liquid, solid, soap paste or powder;
Any cosmetics store is required to have a complete package of documents for each batch of products.
How to choose a premises for a cosmetics store
As with any retail establishment, the location of a cosmetics store plays an important role. A favorable location determines 70% of the success of a retail outlet. When assessing a location, you need to take into account the characteristics of the area, ease of parking, intensity of pedestrian traffic, visibility and notability, and proximity to similar businesses.
The main selection criterion is location commercial premises. It definitely needs to be in an area with a lot of foot traffic. What are these places? City center, densely populated residential area, shopping centers, etc. As a rule, premises for shops are rented on the ground or first floor apartment building or an area in a shopping center. An excellent option would be to open near beauty salons, because your target audience is concentrated there. The advantages of locating a store in a shopping center: high traffic, concentration of the target audience. The advantages of locating a store in a residential area: savings on renting retail space, walking distance for residents of the houses.
%20(1).jpg)
Before making a choice in favor of a particular premises, be sure to monitor competitors: it is better to avoid proximity to cosmetic hypermarkets, branded cosmetics stores and your direct competitors. Also explore performance characteristics premises. There are no special requirements for premises for a cosmetics store.
The minimum area for rented premises is 40 sq.m. if you are planning to open a store with a good assortment. For small trading floor 25 sq.m. will be enough. It is important to remember that in addition to the sales area, the rented area should be enough for a warehouse and premises for household items. needs. Rent of retail space with a total area of 40 sq.m. on average in Russia it costs about 30-40 thousand rubles per month.
Average rental value of commercial premises different sizes in Russia, rub.*
*according to analysis of advertisements on the Avito website as of September 20, 2018
You should pay attention to the layout - the sales area should be square or rectangular shape, without unnecessary bends - this will allow you to more conveniently place the display case and make the most efficient use of the available space. It will be a huge plus if the room has large display windows. This will allow you to design a store window that will attract customers from the street. It is also recommended to look for renovated premises to speed up the process of launching the project and save on finishing works. Special requirements there is no need for renovation - the room needs to be clean and tidy. But there must be high-quality lighting.
How to design a retail space for a cosmetics store
The retail space should be well lit and have a pleasant interior that would highlight the product. Also, if the room allows the creation of a glazed showcase, you should design it too.
Basic principles of cosmetics store design:
island zoning of the retail space - each brand has its own stands, decorated in the appropriate style;
color gradation of prices for goods (for example, super offers are highlighted with green price tags, economy positions are highlighted in yellow, etc.);
contrasting colors in the design (white and black, red and white, etc.). But at the same time, it is undesirable to use too bright and flashy shades, which will distract and irritate buyers.
What equipment is required for a cosmetics store?
The main element in the design of a cosmetics store is retail equipment - racks, display cases, shelves, a cash counter, a cash register. When determining the amount needed commercial equipment, it is necessary to rely on the volume of goods. It is not recommended to place them too close to each other so that a potential buyer can easily see each sample. The most popular models should be placed in the most prominent places in the display case.
All products are arranged according to the type of product (racks with decorative cosmetics, shelves with perfumes, etc.) or sorted by brand. If the store operates in a self-service format, retail areas should be equipped with open display cases, island-type and wall-mounted shelving. If you plan to have a classic store format, you will need to install special glass display cases.
Ready ideas for your business
In order to equip a trading floor with an area of 30 sq.m., you will need to spend about 150 thousand rubles. Keep in mind that, according to statistics, losses from theft can range from 5 to 10% of a retail outlet’s turnover, so if possible, it’s worth investing in anti-theft equipment.
Basics of product display in a cosmetics store:
position the product so that it is clearly visible;
create organized product compositions;
take into account the compatibility of products, take care of a successful product neighborhood;
use retail space, display cases and equipment wisely and rationally;
Monitor the availability of the entire list of goods, as well as its quality (content in proper conditions, compliance with expiration dates, etc.).
When arranging products, remember that products that are located at eye or hand level are purchased unconsciously. Therefore, it is worth placing more expensive goods there, and lowering the cheapest ones to the lower shelves. It is also beneficial to create display cases and shelving that offer seasonal products to visitors. For example, in the summer it will be deodorants, tanning products, and in the winter - hand creams, hygienic lipsticks, etc.
How to create an assortment in a cosmetics store
The assortment of a cosmetics store is determined based on the format of trade and the size of the premises. The main condition is that the display cases are completely filled, but there is no clutter of goods. Half-empty stands can scare away customers, and cluttered display cases can be very difficult to navigate. The first batch of goods should not be too large. Until you know how much demand a particular product will be in, it is better to purchase a small batch and analyze sales. Based on the specifics of demand and the conditions of suppliers, it will be necessary to purchase additional goods. The main thing in this matter is to correctly calculate the required volume of goods in order to diversify the assortment, but to avoid oversaturation of product shelves.
Before forming an assortment, you should conduct a thorough analysis of the market, suppliers and assortment of competing stores. This will allow us to determine consumer demand and select products in such a way as to create a unique offer on the market. A competent approach to choosing an assortment will allow you to avoid unnecessary inventory, reduce the likelihood of illiquid stock, increase turnover, create competitive advantages and attract a potential buyer. Carefully study reviews of suppliers and the quality of their products. According to statistics, about 30% of all cosmetic products are contraband or counterfeit.
Forming an assortment may seem difficult, but don’t worry. Over time, you will find the most successful combination of goods on store shelves, but first you should focus on proven and popular products of mass demand and advertised new items.
The initial purchase of goods will require about 300 thousand rubles. The assortment should include products of various price categories, here is their approximate ratio:
Cheap goods – 50%
Average cost – 30%
Expensive goods – 20%.
The percentage depends on many factors, such as the location of the store, population size, economic situation in the country, etc.
decorative cosmetics (lipstick, mascara, powder, eye shadow, etc.);
skin care;
body care;
hair care;
perfumery.
As for trade margins, for cosmetic products they are usually 20-50%, for perfumes - 50-100%. In addition to the cosmetics and perfumes themselves, you can sell various accessories - this will increase your profits. You can diversify the assortment with jewelry, glasses, cosmetic bags, hair accessories and more.
Another important point when purchasing goods - searching for suppliers. Ideal option there will be cooperation with major wholesale suppliers, which have already proven themselves in the market. You can find everything on the Internet necessary information: terms of cooperation, catalogues, reviews. Work only with those suppliers who can provide you with a quality guarantee. In addition to well-known brands that are widely available on the market, try to find a brand that is not listed in other stores. A unique offer can become your competitive advantage.
How to choose cosmetics store staff
Competent staff is the key to the success of a cosmetics store. Therefore, the selection of personnel should be approached with special responsibility. The main personnel in the store are sales assistants. The number of sales consultants depends on the size of the store and its work schedule. For example, for a small store with an area of 40 sq. m., four sales consultants working two after two will be enough. In addition, to ensure business processes, you will need an accountant, personnel officer, and merchandiser. These functions can be performed by the entrepreneur himself, if necessary.
Portrait of a sales consultant: a young girl, smiling and polite, knowledgeable cosmetics and able to convey information to the buyer in an understandable form. Practice shows that it is this type of seller that inspires the greatest confidence among the average buyer. Key criteria when recruiting personnel – communication skills, responsibility, politeness, ability to work with people. Before starting work, sellers must undergo training, familiarizing themselves with the range of products, their characteristics and sales technology.
To help the buyer, consultants must know the product, its characteristics, and be able to correctly answer various questions. Therefore, staff training may be required. If there is financial opportunity, you can send your employees to various trainings. During the training, staff not only become familiar with sales technology, but also receive highly specialized knowledge on types of perfumes and cosmetics products. Famous brands Cosmetics regularly conduct trainings and seminars for employees of the beauty industry. Some of these events are free to attend.
The preparatory stage lasts about two months, during which it is necessary to go through registration procedures, establish partnerships with suppliers, search for suitable premises, select personnel, purchase equipment and goods, as well as design a retail space.
How to promote a cosmetics store from scratch
Tools for store promotion are selected depending on the advertising budget. What methods can be used to promote a cosmetics store from scratch:
Use a special SMS messaging service that will notify potential customers about the opening of a new store.
Place information about the store in city electronic directories.
Attract visitors using discount and rebate programs.
A designed store window, which will attract the attention of potential customers, also acts as an advertising tool. According to marketing research, 70% of customers enter a store because they are attracted by a beautifully designed display. The cost of window dressing is on average 25,000 rubles.
Some distributors provide support to their partners and even partially cover advertising costs. The advertising budget of a cosmetics store in the first months of operation should be at least 30 thousand rubles. Afterwards, you can reduce advertising costs to 10 thousand rubles per month.
It will take an average of 2 to 5 months to promote the store and reach the desired sales volumes - during this time, customers have time to learn and get used to the new outlet.
How much does it cost to open a cosmetics store from scratch?
To open a cosmetics store, you need to calculate the amount of initial investment. To do this, you need to determine the costs of purchasing equipment, the initial purchase of goods and advertising promotion. The main items of initial costs are shown in the table.
Initial Investment
Also, as part of the business plan for a cosmetics store, it is necessary to calculate the approximate amount of monthly expenses. They are divided into variables and constants. Variable expenses consist of the costs of purchasing goods and transporting them. Fixed expenses consist of rent, utility bills, fund wages, advertising expenses, taxes and depreciation.
Fixed costs of a cosmetics store
Thus, fixed monthly expenses will amount to 177,000 rubles.
How much does a cosmetics store make?
The calculation of future income is based on the fact that the trade margin for cosmetic products and perfumes is 30-100%. Be prepared to operate at a loss or with meager profits for the first few months, as it will take some time to attract buyers.
The store's daily income is 10 thousand rubles per month. With an average check of 700 rubles, for such a volume of revenue, 14-15 clients are needed. Then your monthly income will be 300 thousand rubles. From here we subtract monthly expenses and the cost (purchase cost) of goods. We get a net profit of 60-100 thousand rubles.
Monthly income – 300,000 ₽
Net profit – 80,000 ₽
Payback – approximately 10 months
The average level of profitability of this business is 10%, that is, you can recoup the initial investment of 600 thousand rubles in about 10 months.
It should also be noted that before holidays (March 8, February 14, New Year) revenue will be significantly higher. Popular stores can earn quarterly revenue in the two-week pre-holiday period. Take this into account when drawing up a business plan for a cosmetics store to open shortly before the holidays, when sales are expected to increase.
After you have thought through all the stages of launching a project and drawn up a business plan, where you calculate how much money will be needed for implementation, you need to draw up calendar plan. This is done in order to understand exactly when you can open a cosmetics store. Typically, it takes 4-5 months to launch such a project.
What risks can a cosmetics store owner face?
When planning a business, you must take risks into account. The main threat to this business is high competition. Since the cosmetics market is quite saturated and competition is high (in particular, due to large retailers), the behavior of competitors can influence strong influence. To minimize it, you need to create your own client base, constant monitoring of the market, competent and flexible pricing policy, availability of a customer loyalty program, exemplary service, formation competitive advantages and creating unique selling propositions.
Another risk is associated with increased purchase prices for goods from unscrupulous suppliers. In the first case, there is a risk of increased costs and, as a result, the selling price, which may negatively affect demand. In the second case, the risk is associated with interruptions in the trade process due to a shortage of goods. It is possible to reduce the likelihood of these threats by choosing suppliers wisely and including all necessary conditions, which provide financial liability supplier if they are violated.
%20(1)%20(1).jpg)
The next risk is insufficient level demand - is one of the most likely and can arise both because of the low solvency of demand and because of high distribution costs. Risk can be reduced through careful planning of store activities and financial results, competent formation of the assortment and selection of retail space, holding various promotions and discounts, stimulating repeat purchases, flexible pricing.
If you are leasing a retail space, you must consider the risk of your retail space being rejected or the cost of rent increasing. Loss of space threatens losses: firstly, these are the costs of moving equipment; secondly, the move will take a certain time, during which the store will not function and, therefore, will not make a profit; thirdly, the loss of a place familiar to clients and additional costs for advertising to promote a new place. All these consequences can lead to significant losses. To reduce this risk, you need to enter into a long-term lease and choose your landlord carefully. In the future, it is worth considering the possibility of purchasing your own retail space.
Since good staff is the key to trading success, you should pay special attention to the formation and management of personnel. There is a risk of problems with employees, which may arise due to low qualifications, staff turnover, and lack of motivation. The easiest way to reduce this risk is at the recruitment stage by hiring employees who meet all the requirements. It is also worth considering improving the qualifications of employees and their bonus motivation.
Another risk is a decrease in the store’s reputation among the target audience due to errors in management or a decrease in the quality of services. It is possible to mitigate the risk by constantly monitoring the quality of goods and service, receiving feedback from store customers and taking corrective measures. By knowing about possible risks and taking measures to prevent them, you can avoid serious financial losses and build a stable, profitable business.
748 people are studying this business today.
In 30 days, this business was viewed 240,955 times.
Calculator for calculating the profitability of this business
Legal aspects, equipment selection, assortment formation, premises requirements, production processes, sales Full financial calculations.
Recognizable brand. More than 330 partners in the Russian Federation and the CIS. Own production according to European standards.
15% is the part of income that women are willing to spend monthly on purchasing cosmetics. Some of them are ready to save on entertainment, clothing and food in order to spend this money on cosmetics. In this business plan you will learn how to open a cosmetics store with minimal investment. We will carry out a detailed calculation and tell you where you can save money and achieve maximum business profitability.
Difficulties in business
When starting a cosmetics store, you may encounter some difficulties that will ruin your business in a few months.
The first thing you will encounter are competitors:
- Large stores
- Small shops
- Hypermarkets with a cosmetics and perfume department
- Online stores
The cosmetics and perfumery market cannot be called new. Major players such as L'Etoile and Rive Gauche have long understood how to attract customers, what range to provide and how to work with their employees. Smaller players are also not asleep and have occupied all the most advantageous places in shopping centers.
Also, if you want to open a natural cosmetics store or some other store, then you will have to compete with hypermarkets, since very often they have departments that sell these products.
In addition to regular offline competitors, you will also have to fight with online stores that sell their products cheaper, since they save on the number of employees, rent and utilities.
In addition to problems with competitors, other risks await you:
- The owner of the premises can increase the cost of rent
- Suppliers may increase the cost of goods
- Difficulty attracting clients
- Due to the crisis, the purchasing power of customers may decrease and they simply will not have the money to buy your product
- Incorrectly selected assortment that no one buys
As well as standard problems for any business:
- Business registration
- Recruitment
- Employee training and motivation
- Search for suppliers
- Selecting a location
- Repair
You must clearly understand that opening your own cosmetics store is a very difficult matter, which requires you to invest a large amount of your time, effort and money. There are options to make your life a little easier, namely, cooperate with some kind of franchise that will help you at every stage, or create an online store, then you can save a lot of money. First, let's talk about how to open a cosmetics store from scratch, and then we will tell you about franchises and online stores.
Business registration
The first stage of our cosmetics store business plan that you must overcome will be business registration. You can register as an individual entrepreneur or LLC. For large stores you can choose LLC, and for small individual entrepreneurs.
If the area of the premises is no more than 150 sq.m., then we recommend choosing the UTII taxation system. It will be the most profitable option for you.
OKVED codes for a cosmetics store will be as follows:
- 52.33 – “ Retail cosmetic and perfumery products";
- 52.33.1 – “Retail trade in cosmetics and perfumes, except soap”;
- 52.33.2 – “Retail trade in toilet and laundry soap”;
If you are going to sell your products via the Internet, you will also need the following code:
- 47.91.1 - “Retail postal (parcel) trade services.”
As for accounting in this case, you can save money by hiring a full-time accountant. You can do your own bookkeeping, but if you don't have the time, hiring a third-party accountant is a great option.
Before starting a business, you will need to go through the following list:
- Open a bank account
- Obtain permission from Rospotrebnadzor
- Obtain permission from the fire inspectorate
- And get permission from the SES
If you choose an individual entrepreneur, then in total at this stage you will have to spend 3,000 rubles, for those who chose LLC the amount of costs will be slightly more than 20,000 rubles.
Selecting a location
The second thing we need to do to open a cosmetics store is to find a suitable premises. In offline business, this stage is the most important, since the location of the store directly affects the daily number of visitors and, accordingly, profit.
Like any other business, it is most profitable to locate a cosmetics store where there are more people. For example:
- Shopping centers
- Close to metro or stops
- Densely populated neighborhoods
- City center
Most of the target audience of cosmetics and perfume stores are women. Therefore, if you know some places in the city where there are a lot of them, an excellent option would be to open there. For example, girls often visit beauty salons. It makes sense to open next to such a salon, then you will earn money not only from visitors, but also from the employees of this salon, who buy consumables every week.
There are no important requirements for choosing premises for cosmetics stores. Typically, a small room measuring 45 sq.m. is suitable for such needs. where most of it goes to the shopping area and the smaller part goes to the bathroom and warehouse.
It will be a huge plus if they are inserted into the walls large windows. The interior of the store and its assortment will attract customers from the street, and pleasant sunlight will fall on those already inside.
Also, before opening, you need to take care of the renovation and interior. If your budget does not allow you to hire professional designer and do some interesting design, then you need to try to do everything minimalist, but beautiful. The interior should create comfortable atmosphere indoors and not to bother clients.
In total, simple repairs will cost you 200,000 rubles, and monthly rental of the premises will cost approximately 40,000 rubles.
Required equipment
Once the premises have been selected, it is necessary to purchase equipment. No one will give you a clear list of what equipment you need to buy for a cosmetics store. The exact list of equipment depends on the interior design concept. Some people need to buy wooden display cases, some need glass ones.
It is worth noting that closed display cases will reduce the number of thefts in your store, but they have one major disadvantage. Potential buyers will not be able to twirl and touch the product in their hands, and this can lead to a decrease in sales.
Particular attention should be paid to lighting. When testing samples, visitors should see all shades undistorted. Also, you need to place a large number of mirrors.
If you have a very small space in the room, then there is no need to fill it with shelving and display cases. There is no need to turn the store into a warehouse, since a huge number of illiterately arranged goods will not lead to an increase in sales. The best option will reduce the assortment and concentrate on selling the most popular goods.
By purchasing used equipment you can save a lot of money. The most important thing is that it looks fresh and doesn’t make customers feel like the store is a thousand years old.
An example of a list of required equipment can be seen below.
| Name | Sum |
| Glass rack (4 pcs.) | 15.000rub |
| Low showcase (5 pcs.) | 20.000rub |
| Showcase island (2 pcs.) | 10.000rub |
| Table and chair at the cash register | 10.000rub |
| Simple computer | 10.000rub |
| Lighting | 20.000rub |
| Cash register | RUR 5,000 |
| Signaling | RUR 5,000 |
| Mirrors | 20.000rub |
| Air conditioner | RUB 30,000 |
| Total: | RUB 150,000 |
Assortment
Some entrepreneurs want to open a Thai, Korean or Belarusian cosmetics store. You may well sell cosmetics from manufacturers from a specific country, but you should not focus on this. For example, if you name the store “Korean Cosmetics”, make a huge sign with this name, design the website, banners, and interior in Korean style and in the end no one will buy cosmetics from you - it will be a complete failure. To change an assortment that is not in demand, you will have to change everything and start from the very beginning.
You will spend approximately 400,000 rubles on your first purchase, but until your store is operational, you will not have data that you can analyze. You will not be able to know exactly which products will sell and which will not. Therefore, before making your first purchase, it is important to analyze the market and determine which products and manufacturers are in demand and which are not. If for some reason you are not able to independently analyze the market, competitors, websites, forums and social networks in order to understand what is in demand now, then we recommend hiring a specialist who will do this for you.
The first batch of goods should not be too large. There is no point in buying 100 pieces of one lipstick when you don’t even know whether it will sell or not. The best option would be to purchase a small batch and in the future buy additional goods that are selling well, and accordingly, not buy additional ones that are not selling.
The assortment should look like this:
- Cheap goods - 50%
- Average cost - 30%
- Expensive goods - 20%
The percentage will depend on many factors, including the size of the city's population, the location of the store, the economic situation in the country and other factors.
Product categories:
- Makeup (lipstick, mascara, powder, etc.)
- Skin care
- Body care
- Cosmetics for adult women
- Cosmetics for men
- Perfumery
There is an option to purchase directly from manufacturers, but then you will not be able to boast a diverse assortment and the target audience of your cosmetics store will become much smaller.
The purchase of the first batch of goods will look something like this:
| Name | Price |
| Foundations | 25.000rub |
| Powders | 16.000rub |
| Blush | 10.000rub |
| Eyeshadow base | RUR 3,000 |
| Shadows | 7.000rub |
| Lipsticks | 15.000rub |
| Mascara | 20.000rub |
| Pencils for eyes, eyebrows, lips | 20.000rub |
| Tonics | 10.000rub |
| Moisturizer | 10.000rub |
| Nourishing cream | 10.000rub |
| Body cream | 9.000rub |
| Anti-aging cream | 40.000rub |
| Hand cream | 15.000rub |
| Anti-cellulite cream | 10.000rub |
| Face mask | 13.000rub |
| Perfume for women and men | RUR 170,000 |
| Total: | 403.000rub |
In addition to the cosmetics and perfumes themselves, we can sell various accessories, this way you can increase your profits. Accessories should be selected based on the audience that visits you. For example, young girls can be offered handbags, bracelets, simple jewelry, glasses, etc. At the very beginning, we recommend concentrating on specialized products, that is, cosmetics and perfumes, and later, when the business is established, you can add some new products.
Merchandising
If this is your first business plan for a cosmetics and perfumery store, and before that you have never been involved in any business, then you need to study the science of arranging goods on shelves.
It seems that there is nothing complicated in this, but nevertheless large companies Every year, huge amounts of money are invested in research to determine which arrangement of goods will lead to the greatest profit. In our case, we do not yet have huge funds for research and the object of study itself, but nevertheless, several rules are worth studying:
- Products should be arranged in some logical order; they can be sorted by brand, purpose, or something else.
- The same type of product should only be in one location. For example, all the lipstick that is in the store is on a specific shelf. There's no point in putting 10 lipsticks on the other side of the store. The only exception in this case can be showcases where discounted goods are located.
- The buyer should have a feeling of a clear system. Namely, all goods must stand exactly on one straight line. If a product is bought, then something else should immediately take its place.
- Products that are located at eye or hand level are purchased unconsciously. The buyer himself does not know exactly what he wants and chooses what is easier for him to get. Therefore, goods sold at a discount, or if the product is about to expire and needs to be sold urgently, must be placed at eye or hand level.
Staff
To open a small professional cosmetics store, you will need a small staff. As mentioned earlier, we hire accountants outsourced, but it’s worth saving on the administrator at first. Until the business organization is perfected, you can perform the role of administrator yourself.
The most important employees of a cosmetics store are sales consultants. As a rule, these are young girls of pleasant appearance who understand cosmetics. To begin with, it is enough to hire only two salespeople with wages 20,000 rub. To motivate them to help customers more, you can pay a percentage of each sale.
For sellers, it is worth coming up with a strict dress code that they must adhere to. It could be some kind of dresses, T-shirts, shirts or trousers. Since this is a cosmetics store, the dress code can be mandatory requirement that girls should wear bright makeup.
Of course, no business can do without a cleaning lady. If things go really badly and you don’t have an extra 10,000 rubles. to pay for her work, then you can take over her responsibilities.
In total, we will have to spend approximately 50,000 rubles. to pay employees every month.
Attracting clients
The final stage in creating a cosmetics store will be attracting customers. The store itself is built in good location and this will attract potential buyers, but to get more of them you need a little work.
The most important thing to do is to buy a large illuminated sign that will be located above the doors to the store. This is especially important if the entrance to the room is on the street. During the winter season it gets dark very early and a bright luminous sign will attract attention in the dark.
Also, standard methods of attracting clients include distributing flyers and placing advertisements on banners.
An excellent way to attract attention is the Internet. It certainly wouldn’t hurt to create your own website or at least communities on social networks where you will post news about your store.
A good option would be to advertise in urban communities or on city websites. Most importantly, advertising must be original and attract attention. For example, simply the information that a new cosmetics store has opened on Pobeda Street 6 is unlikely to interest anyone. People need to be hooked with something, for example, a banal 25% discount.
To turn a casual visitor to your store into a regular customer, you can offer loyalty programs. For example, upon your first purchase, you issue a discount card for the buyer and the discount amount will increase with each new purchase.
You can see the marketing plan in the table below.
How much does it cost to open a cosmetics store?
| Name | Sum |
| Initial costs | |
| Equipment | RUB 150,000 |
| First purchase | 403.000rub |
| Repair | RUR 200,000 |
| Business registration | RUR 3,000 |
| 40.000rub | |
| Attracting clients | RUR 70,000 |
| Salaries of employees for the first month | RUR 50,000 |
| Total: | 916.000rub |
| Monthly expenses | |
| Rent of premises for the first month | 40.000rub |
| Salary of employees | RUR 50,000 |
| Utility payments | 4.000rub |
| Total: | 94.000rub |
As a result, the initial costs will be 916,000 rubles, and monthly expenses will be 94,000 rubles.
Revenues and payback
In this paragraph we will figure out whether it is profitable to open a cosmetics store or not? It is impossible to answer this question precisely, since the success of your store will be influenced by a huge number of factors: location, competitors, cost of goods, economic situation in the country, trends and much more.
When opening a cosmetics and perfumery store, you need to rely on the following calculations: the store’s daily income is 9,000 rubles, monthly income is 279,000 rubles, from here we subtract monthly expenses and get a net profit of 185,000 rubles. Also, we need to replenish the store with a new assortment, which means that we will have to invest approximately 85,000 rubles on the purchase of new goods, as a result, real net profit will be equal to 100,000 rubles.
Income per month— 279.000rub
Net profit— 100.000rub
Payback— 10 months
Franchise of a cosmetics and perfumery store
Previously, we promised to tell you about creating a franchise cosmetics store. It should be borne in mind that by contacting the franchise throughout the entire period of work you will encounter positive and negative sides. Therefore, you must be prepared for this.
Let's start with the positive aspects:
The downside is that you will have to share the profits and you will have to coordinate all the changes that you want to make in your store. This means that you won’t be able to just change your employees’ uniforms or put up new products like handbags and bracelets for sale.
Before purchasing a franchise, be sure to read reviews about it. They can be found on the Internet on forums. Also, it wouldn’t hurt to find people who work or have worked with this franchise and find out how things really are there.
| Franchise name | Description | Price |
| Danaco | Korean cosmetics | 1,000,000rub |
| Demeter | Perfume shop | 1.600.000rub |
| Fresh Line | Natural cosmetics | 1,000,000rub |
| Mixit | Natural cosmetics | RUR 2,000,000 |
| TonyMoly | Cosmetics store | 1,000,000rub |
| Yves Rocher | Cosmetics and perfumes boutique | RUR 3,500,000 |
| Belarusian cosmetics | Belarusian cosmetics | 1,000,000rub |
| Flormar | Popular cosmetics brand | RUB 500,000 |
| Holika Holika | Korean cosmetics | RUR 1,300,000 |
| Lush | Handmade cosmetics | RUR 2,000,000 |
| L`Occitane | Perfumes and cosmetics | 4,000,000rub |
There are many other franchises, here we have listed only those that are worth starting the analysis with. It is impossible to say for sure which franchise will be better and which will be worse. They all have pros and cons.
Among those entrepreneurs who would like to start their own business in the retail sector, the idea of opening a cosmetics store is quite popular.
This is quite easy to explain; the standard of living in the country is increasing every year. And as a result, women, and men too, can spend more money on purchasing various cosmetics to take care of their appearance. Everyone wants to look beautiful and stylish, regardless of age or social status. That is why if you correctly think through all the steps to opening a cosmetics store, calculate planned expenses and expected income, write a business plan, etc., then this business can become a fairly profitable investment.
Selecting a location
When thinking about how to open a cosmetics store, you also need to remember that in this area of business the level of competition is at the highest level. The first thing to think about is the location. Opening a cosmetics and perfumery store in large cities with a population of one million will be an almost hopeless investment, since a single store simply will not be able to compete with large chain stores. IN competition he will lose. Network giants offer their customers a wide range of products, including products from elite cosmetic brands, perfume production, a series of professional cosmetics, exclusive cosmetics, etc. Networkers’ prices are often lower than in regular stores, plus they have savings cards with discounts, marketing and advertising techniques are used to attract customers and increase sales. Also, do not forget that almost all chain stores have online stores. Online sales make up a large portion of their profits. Recently, purchasing goods online has become very popular in our country.
Therefore, when choosing a location, you should think about the option of opening a store in small towns or regional centers, that is, in those places where chain stores have not yet opened their representative offices.
Marketing specialists identify the two most successful locations for opening a store:
- Rent of retail space in one of the medium or large shopping centers.
- Rent of premises in one of the densely populated residential areas of the city on the ground floor of a separate residential building. In this case, the premises should have a large storefront and be located on one of the main streets of the area, and not on the very outskirts.
In order to place a sufficiently wide range of goods on shelves and counters, the area of the rented premises must be at least 50 square meters. m. Enough attention should be paid to the decoration, design and arrangement of the sales area, since the demonstration of goods has a positive effect on the result of trade. Therefore, the product must be beautifully laid out. Samples and product samples are placed next to it. Each type of cosmetic product requires a rack that will demonstrate it to a potential buyer in the most impressive way.
Return to contents
Cosmetics store assortment and choice of suppliers
The wider the range of goods, the greater the chance of the store to survive in the market among competitors and prosper. You can also put on sale a small amount of professional cosmetics or luxury perfumes, but you should not focus on a specific category of goods. It will not be possible to immediately determine the required assortment. It will be possible to create a list of necessary goods after six months from the moment of opening, when it will already be clear what the store’s main customers need. It will be possible to say exactly which categories of goods interest buyers the most and bring greater profits, and which goods should be avoided from trading.
Regarding the supply of goods, you can contact either wholesalers or representatives of cosmetic brands. Orders can be made online. It is worth noting that some brands do not allow their products to be sold in brick-and-mortar stores. To enter into an agreement to sell these brands, the store must meet certain requirements set forth by the company. For example, it must have a certain decoration of the room, special shelving or the correct layout of products, etc. Some global brands sign cooperation agreements only with a specific networker. Therefore, only he has the right to sell these products.
Return to contents
Cosmetics and perfumery store staff
The number of employees will directly depend on the size of the business. Most stores are open 12 hours a day, seven days a week, so you will need to hire two shifts of sales assistants. The staff must be well versed in all categories of products sold. Cosmetics are not an easy product to sell. Some chain stores, after hiring an employee, send him to cosmetology courses so that the sales consultant can give the buyer good advice when selecting cosmetics.
Return to contents
Advertising and promotion
Like all other types of business, a cosmetic store needs advertising and promotion, especially one that has just opened. You can use such types of advertising as advertising on Internet sites, Internet forums, distribution of leaflets, billboards, banners, use of storefronts, etc. Issuing savings cards to customers will help in retention and acquisition regular customers. You can develop a plan for additional discounts during less frequented store hours.
When choosing a legal form for opening a company, preference is usually given to Individual Entrepreneur(IP) or Limited Liability Company (LLC).
