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Retail, Sales, Marketing
I’m curious about the retail/sales/marketing side of cosmetics:
- numbers - even gross estimates - are always helpful.
- please specify which sub-market you’re talking about, if possible.
- What can you tell me about the unique aspects of cosmetics retail/sales/marketing?
- What determines how well something sells? (product characteristics v. marketing)
- For a drugstore/Ulta/Sephora brand, how well is “well”?
- How long is an poor/average/good/great product lifecycle?
- How much of product cost goes into product, how much into packaging?
Thank you!
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2 Replies
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These are all just opinions of a formulator and may not be shared with cosmetic marketers. I don’t think scientists or business people really have answers to most of these questions but many people have opinions. Here are mine.
1. Everyone can make products that work just as good as everyone else’s product (at least big companies). Small companies usually (but not always) make inferior products. Now that you can fill orders online, it has never been easier to launch a cosmetic product. You don’t need retail but still, the vast majority of product is sold through large stores like Target & Walmart.
2. The marketing story sells the first bottle. The fragrance and experience sell the next.
3. P&G has a target of creating brands that sell $1 billion a year. They launch enough products to ensure that launch size. But I’d say if you can build a brand to $100 million a year, you’re doing alright.
4. 6 months good, 1 year average, more than that…not good.
5. Most of the product cost goes into the packaging and marketing. Formula makes up 1/3 or less in costs.
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From my limited experience in marketing.
1. Marketing makes your product seen. Retail guarantees your product will be seen to some extents.2. As Perry stated above. Marketing makes an impression and boots sales when needed. In highly competitive market, an established brand like Pantene etc. still do Marketing. You have to be relevant or you might end up being a one hit wonder.
3. For a drugstore/Ulta/Sephora - If you see a repeat L/C that is a good sign or if your product underperform they will politely tell you off when your contract is expired.
4. Product lifecycle - average/good/great depends on Marketing cycle. If it past a year or past half of expiration date and you don’t see money coming back that is not a good sign.
5. Most of the product cost goes into marketing.
If you order 10,000+ units basic model directly from packaging plant that will significantly lower your cost or if you want your own molding would be around 20k-30k extra for 1 design.
Promoting new facial moisturizer in some case use up to 70% in first month. But each company have their own way of working their strategies and now with online marketing it is easier to launch a cosmetic product from start-up business 50/50 of budget for product/marketing.
These are just my humble opinions.
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