Dropshipping - is it the best business strategy for your skin care business? 

Do you feel ready to start your small skin care brand, but concerns over the storage and shipping process are holding you back? 

Our guide below outlines the process of dropshipping for skin care businesses from beginning to end. We explain dropshipping in-depth, the biggest pros and cons, and how Genie Supply can make dropshipping easy and convenient for your brand.

To find out if dropshipping is the right path forward for your business - just keep reading!  

What Is Dropshipping? 

Dropshipping is a logistics strategy that involves a third party (often the supplier) storing and shipping your customer skin care orders on your brand’s behalf. 

Although dropshipping is typically not as cost-effective as handling all of the storage and shipping in-house, it can be worthwhile if storage space or the shipping process represents a significant bottleneck for your business. 

Before you sign a dropshipping contract, take time to understand all of the pros and cons and carefully consider whether or not this is the best route forward for your skin care business. 

Are you completely new to the skin care game and not sure where to start? Check out our full 6-step guide to manufacturing skin care here. 

Is Dropshipping Suitable For Your Skin Care Business? 

Dropshipping contracts vary slightly from one supplier to another but generally, the pros and cons are similar. Here are five of the most common dropshipping benefits and two of the biggest downsides for skin care brands: 

Dropshipping Pros:

1. Reduces Financial Risk 

One of the main advantages of dropshipping is that it reduces your financial risk if your skin care business ultimately fails. If you choose the dropshipping route, you only need to purchase stock on a sale-by-sale basis.

This eliminates the risk of wasting your resources on inventory that doesn’t sell well. 

2. Lower Costs At The Initial Phases Of The Business

Paying for stock on a customer-order basis has a second significant benefit for your business. It’s normal for new and small skin care brands to operate on a set limited budget at the early stages of operation.

Although dropshipping cuts into profit margins, it requires less financial capital at the beginning stages as you do not need to purchase the stock before you make any sales. 

3. Test A Wider Product Range 

New brands often fall victim to the paradox of choice during the skin care product selection process. Struggling to narrow down a limited range of skin care products? Dropshipping is a great opportunity to test different options with your consumer base and identify the best sellers and the biggest flops.

Even if dropshipping is just a short-term strategy for your business, it can be useful as a limited-risk testing method to find products that truly sell well. 

4. Saves Time And Space 

The most obvious advantage of dropshipping is that it saves valuable time and storage space for your business. Inventory management and daily drop-offs to the postal service are time-consuming. Spend that valuable time on activities that bring your business forward instead - marketing, networking, and planning future skin care collections.

5. Easier To Scale Operations 

Because a third party handles the storage and shipping, it’s easier to scale your business through dropshipping. Avoid pouring time into negotiating with shipping companies and searching for more storage space - you can easily scale by ordering more stock from the wholesaler as a higher volume of orders comes through.

If you notice an uptick in success, communicate this with your dropshipping partner ASAP to ensure stock levels stay replenished.  

Dropshipping Cons 

1. Dropshipping Reduces Profit Margins  

Dropshipping is not the best strategy if you prioritize maximizing profit margins above all else. Compensating your supplier for the additional costs and labor required to store and ship products from their warehouse will cut into your profit margins.

Nailing your pricing strategy is important for any business - but this is particularly the case if you decide to dropship. Charge a price that is appealing to customers but still allows your brand to make a profit after accounting for all of the expenses - and dropshipping certainly adds to the expenses. 

2. Less Control Over Your Business

The success or failure of your dropshipping skin care business is strongly linked to your supplier's quality, professionalism, and consistency:

• Product quality should be impressive and consistent

• Orders should be fulfilled in a timely fashion

• Packaging should be branded correctly and securely packed 

Naturally, this involves a lot of trust on your part. 

Dropshipping requires a good working relationship with the supplier and the ability to relinquish some element of control. Pay close attention to all customer feedback to ensure your skin care is shipped correctly and that all of the products arrive as they should. 

How Dropshipping Works 

Dropshipping (done well) is a 6-step process from beginning to end. 

1. Vet Multiple Suppliers And Reach An Agreement 

First, you must find a suitable supplier and agree to the terms of your contract. Look for a  wholesaler with high-performing skin care that appeals directly to your target market. Important considerations include:

• The number of products on offer

• The ingredients used in each formula

• Is the skin care produced ethically? Look for information about clean, vegan, cruelty-free, and environmentally conscious values

If you plan to formulate your skin care from scratch, isolate your search to suppliers that offer custom formulating services combined with dropshipping.

Otherwise, look for manufacturers that provide total turnkey private label services. This includes preformulated skin care, customized branded packaging, and packaging filling services. 

Once you have thoroughly vetted multiple suppliers’ products and selected your preferred skin care lab, it’s time to negotiate the cost of producing the skin care and dropshipping it directly to your customers. 

At Genie Supply, high-quality, clean, and ethically produced skin care is a core value of our manufacturing business. We have over 60 preformulated skin care products to choose from with our turnkey private label packages. We also offer custom product creation, custom formulating, and contract manufacturing services. 

2. List The Supplier’s Products On An Online Selling Platform

With a dropshipping agreement in place, it’s time to list your skin care on the agreed selling platform. This could be your own website or a third-party retailer.

Keeping track of which products sell well and which underperform is key. Periodically remove underperforming SKUs and replace them with new skin care products to test on the market. 

3. Marketing To Attract Customers

Dropshipping is the ideal business strategy if marketing is your strong suit. Leave the logistics to a third party and focus your time and attention on attracting new customers and retaining your existing customer base.

Pay close attention to your analytics to uncover your best-performing marketing strategies and track bestsellers and underperformers from each marketing funnel. 

4. Tracking Orders And Payments

Your product selection process and marketing efforts were a success! The orders are rolling in. What’s the next step? Carefully track every order coming through and ensure the payment system works correctly.

Online e-commerce platforms typically have order tracking systems to make this process easier for you.

5. Sending Order Details To The Supplier For Fulfillment 

As each order comes through, you need to send the order invoice and customer details to your supplier to begin the order fulfillment process. Set up an automated system to make this process more efficient and to prevent any mistakes and delays for the customer.

6. Shipping From The Supplier To The Customer 

When the supplier receives your customer orders, they should carefully pack and ship the skin care products to the customers as soon as possible. 

Dropshipping Made Easy With Genie Supply 

At Genie Supply, in addition to our preformulated and custom-formulated skin care manufacturing services, we offer a special form of dropshipping to make your business journey as seamless as possible. 

Amazon’s Fulfilled By Amazon (FBA) is a dropshipping service whereby a skin care business sells its products on Amazon. Amazon then ships the products directly to the consumer from their warehouse.

If you hope to sell through Amazon’s FBA program - we’re here to help! 

First, we will help your brand to comply with Amazon’s strict FBA rules. This includes: 

• Ensuring that your skin care packaging passes Amazon’s 3 feet drop test

• Providing the mandatory SKU label printing

• Producing the exact style of product images required to sell on Amazon’s platform

Secondly, we will prepare and send the first round of inventory straight to Amazon on your behalf. 

Learn more about our special Amazon package at Genie Supply here. 

What if dropshipping appeals to you, but you don’t plan to sell on Amazon? Get in touch with our customer service team here and we can discuss your dropshipping options. 

In sum, here are the 3 steps to effective dropshipping for small skin care businesses: 

• Decide if the pros of dropshipping outweigh the cons for your skin care business

• Understand the 6-step dropshipping process in detail 

• Choose between dropshipping on your own website or a retailer platform like Amazon

Ready to start your skin care development journey with the option for dropshipping? Genie Supply would love to collaborate with your brand. Learn more via email: customerservice@geniesupply.com or by calling: (812) 329 1105.