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Brick & Mortar, Profitability

7 Quickest & Easiest Ways To Know If A Beauty Shop Is Profitable 

 March 5, 2021

By  Mark Njoroge

Over centuries, there has been a mixture of obsession, perfectionism, and push to create more luxurious and artistic beauty products.

The inventions moved from obscure skin mutilation to artistic design of pieces like earrings and colorful tattooing.

People have shifted from applying colorful muds on their bodies to modern appliances of all sorts of alluring beauty care products.

Over time, these shifts have continuously shaped the beauty industry, awakening a business opportunity. The rule of demand and supply of beauty products was met.

But you may wonder…

…is a beauty shop profitable? With the right market conditions, you can make Ksh. 6000 a day from a small beauty stall located in a busy street. And with a profit margin of 40% on average, in a month working for 6 days a week, you are likely to make Ksh. 62,400 in net profits. In a year, you can gross to Ksh. 1,872,000.

However, the above profit margin depends on many factors like the flow of customers, whether you have stocked trendy beauty products, you are consistently opening your shop, and which marketing strategies you are using to market your products.

As you can tell, there is more into the variables of the profitability than the highlighted factors. But we won’t get into the details of these factors in this article.

Instead, I share the 7 quickest and easiest ways to know if opening a beauty shop will be a profitable business idea for you.

So, brace up as we dive deep into the topic.

Here are 7 Quickest and Easiest Ways to Know If A Beauty Shop Is Profitable

1

POPULATION SIZE AND INCOME LEVEL JUSTIFIES THE DEMAND FOR BEAUTY PRODUCTS

To start a beauty shop, we must go back to the numbers. You must first understand the market – your prospects. Where they are, what size, and how much is their income.

By being meticulous with these details, you can start your beauty shop in a location that will bring you bragworthy revenues.

So, let’s first look into where your prospects are and in what sizes.

The Population Size and Their Locality

According to WorldoMeters, the world population stands at 7.8 billion. In another report by Hannah Ritchie and Max Roser, updated in 2019, over 4 billion (55%) of this population live in urban areas.

In the latest census done by the Kenya Bureau of Statistics in 2019, the Kenyans population stood at 47.5 Million, with 27.51% living in urban centers.

These statistics show there is a population to support the purchase. And second, the high numbers of people in the urban sectors means that’s good news. There are more people making money.

That may not make sense now, but let me clarify that below.

Take for a case of a person working in a formal working space. Probably this person is working in a corporate sector in a big city like Nairobi. Such an individual is likely to invest heavily in beauty products than a farmer somewhere deep on the slopes of Elgeyo Marakwet.   enormous

In other words, people in urban areas always have pressure to look attractive and uplift their confidence. Unquestionably, an enormous percentage of them work in a formal sector that demands a specific code of conduct.

The appearance conduct ranges from how you must dress to how you smell. It is more of an ethical culture to promote the image of the company and enhance customers relation. Clothes and beauty products make this work easier.

Likewise, setting a cosmetic shop in Nairobi will attract more customers than the shop located deep in your village.

Not that in rural areas there won’t be customers, or setting a cosmetic business in a busy town is an iron-clad for success, certainly not. But in rural areas, a cosmetic shop will be a little slow.  Its growth rate with all factors constant to a business in the urban sector is not comparable.

Regardless, the significant point is to note the population level in your town and the type of activities people are doing.

For instance, a fast-growing town with banks, supermarkets, big retailer shops, hotels, and busy businesses; sets a greenlight signal that the market is ripe to set a cosmetic business. The opposite holds.  

With that, let us explore the second portion of the size of income.

The Population Income

According to the Economic Survey report released in April of 2020 by the Kenya National Bureau of Statistics, the estimated real average wage earnings per employee in both the private and public sectors was Ksh. 380,859.4 in 2019. That’s roughly an average of Ksh 31,738.28 per month, cutting across the board of lower-income earners, middle level, and high-income earners.

That means there is some money in circulation.

When you combine all the facts, the evidence points that there is money to spend even on beauty products.

Besides the size of the population and the earnings, if you happen to visit our urban areas, you will notice that most people are influenced by western culture.

If you’re not sure about this, try to pay attention to what they eat, what they wear, and even the type of music they listen to.

The consumption behavior can be translated to what type of makeup, spray perfumes, and deodorants someone has the preference over the other.

All the above information will inform the buying behavior of a given person.

Here is a quick summary for this section

  • Check for the busyness of your locality – if your town has more people working in the cooperate sector and high-income informal sectors, the more likely the business will be a success. The vice versa holds.
  • The income level of the community will determine cosmetics consumption behavior – similarly to the busyness of the town, the more people are in the income bracket, set by the employment status and income of a business, the more likely they will buy beauty products.
  • The influence of the Western culture – the western culture has influenced the way people consume beauty products. In the millennial era, this is not a question. In almost all towns, beauty products will have high demand.

2

THE MODERN WOMAN HAS BEEN EMPOWERED: SHE HAS CASH TO SPEND ON HERSELF

Our generation is different from the old one.

What ladies did not have 60 years ago, now they have access to. They have acquired formal education, work in civil service, inherit property, drive cars, apply for loans on their own names, and so much more.

Essentially, what this means, what a man can do, a woman can do it even better.

Time and events have also demanded a man to share former chauvinistic privileges with a woman.

Furthermore, both men and women have united to push for gender equality all over the world.

All these factors have increased the woman’s cash flow.

Now than ever, she has become more financially independent.

Since you cannot separate a woman from a beauty product, and with the empowerment in her favor, she can spend a portion of her income on cosmetics of her preferences.

Even aged women will invest heavily to look a year younger. They always have pressure to look beautiful, presentable, and comfortable. Especially if the expenditure is justified by a formal job or a high-earning business in the informal sector.

Nevertheless, even modern men are more concerned about how their daughters and wives look. A fairly reasonable man will always set aside a cosmetic budget for their daughter(s) or wife. It is in the man’s DNA to fall in love with beauty. Spending a portion of his money to uplift his loved ones is out of the question.

Generally, this is the reason why most skincare products, hair products, and facial makeups have become more profitable in our cosmetic market today.

Here is a quick summary for this section

  • The modern woman is more empowered – She has more financial privileges than before. As a result, she can purchase any beauty product as she wishes. More ladies are financially independent.
  • With status, a woman has pressure to look more beautiful – she has to spend money to look younger and attractive.
  • A reasonable man will set aside some budget to spend on his loved ones – men fall in love with beauty.

3

BEAUTY PRODUCTS HAVE BECOME A HOUSEHOLD ITEM

Let me explain.

In the morning, you had a shower, right?

And what type of lotion, skin oil, deodorant, or perfumed did you apply afterward?

For you ladies, maybe you didn’t stop there.

You took an extra step to be a little bit playful, a bit more artistic.

  • You picked up your makeup pouch,
  • moisturized your face,
  • applied a light coat of foundation,
  • highlighted it with concealer,
  • for those who wanted a flawless completion, you didn’t skip applying foundation powder.
  • afterward, you applied your matching lipstick,
  • and not forgetting your eyes- so you decide to go ahead and perfect them with eyeshadows, eyeliners, and eye pencils.

The process is more of an obsession, an art by itself. For those addicted to it, it is somewhat a must-do exercise.

Did I mention the whole exercise will be repeated in the mid-day and in the evening while going home?

And this is not done by just one lady; it’s done by hundreds of thousands if not millions of potential clients.

That by itself presents a market. An opening to sell and generate revenues.

As a household item, whether you are team natural or you take a little bit of time on yourself, a cosmetic product is a must-buy item.

Here is a quick summary for this section

  • Cosmetics products have become a household item – they have become an essential commodity indirectly without even realizing it.
  • Since cosmetics have become household items, this presents a market opportunity to start the business and make some fairly enough profits.

4

LOCAL MARKET IS PRODUCING ITS OWN PRODUCTS

As you can tell, sometimes our local market is flooded with international products.

However, there is a percentage of people who prefer only local products.

This section of people prides in consuming products made in their own country. It gives them a sense of patriotism.

Besides, most local products pride themselves in all-natural production. They promise superior outcomes in skincare, hair care, and better health benefits like a cure against skin irritation.

These products range from a collection of solutions like:

  • herbal body lotions,
  • creams,
  • deodorants,
  • perfumes,
  • henna,
  • hair moisturizers,
  • hair conditioners,
  • natural oils, among others.
 Examples of some local natural hair beauty brands include;
  • Marini naturals – they pride on creating all-natural African hair products for kinky, coil, curly, colored, and loc’d hair for both men and women. They produce beauty products in the category of hair cleansers, conditioners, moisturizers, stylers, and pure butter and oils.
  • Mosara – the company manufactures hair products from coconut oil. A fruit harvested in the coconut’s plants along the shores of Kenyan’s Indian ocean. It’s in their name that makes the company’s productS feel special for, by itself, it is an African name from Nigeria, meaning coconut.
  • Bu.ke – it is formerly known as Shea by Asal. The founder was driven in an obsessive quest to find a skincare product for her son ailing from skin irritation. Soon, she will unearth the gold as a wide range of beauty products with rich health benefits made from African natural inputs like honey, baobab, purple tea, among others. The name itself is a crafty curation of buy and Kenya. A motivation for natives to buy their own.
  • Cinnabar green – they pride themselves on having over 12 years of producing natural cosmetics products. They make a wide variety of beauty products ranging from bar soaps, avocado & lemon bath soap, rosemary shampoos, Wild Frankincense essential oil, and over 20 products in the category of hand sanitizers, body care, face care, hair care, skincare, and home care.
  • and many more

Here is a quick summary for this section

  • More people prefer local products over foreign products because they promote national patriotism while offering promises like health benefits and all-natural. As a result, this opens a new frontier with a unique competitive advantage over the imported products.

5

BEAUTY PRODUCTS CAN SELL IN BOTH LOCAL AND INTERNATIONAL MARKETS

The consumption behavior of beauty products differs from one person to another, fueled by varying tastes and preferences. This, therefore, creates a high demand creating an opening in both local and internal markets.

To take advantage of these market frontiers, all you have to do is understand how to market exceptionally.

For the case of the local market, the options are limited to the customers in your locality.

With limited capital, you will opt-in for a small stall alongside a busy street. The beauty about it, there is always a lady or a man interested in a beauty product.

However, if you have the financial muscle power, you may decide to invest in a cosmetics wholesale store. This by itself presents an enormous opportunity compared to a retail store. You will be able to compete on prices and sales volumes.

But beware, you will be in competition with existing well-established wholesalers. Some of the existing local wholesales include; Best Lady, Mac Wholesalers, Beauty Wholesale Kenya limited, Beauty Options, and Mega wholesalers.

Nevertheless, because of the size of the capital required to invest in this type of venture, rest assured you won’t find mushrooming wholesalers like retailers. You will enjoy a broader market share and even get retailers as your primary customers alongside the usual prospects.

With the international market, things are a little bit different. The opportunities are endless. To take advantage of this, you can build a virtual store to promote your products. An obvious option will be a website. Rest assured, you will make sales around the clock, year-round, and to the whole world regardless of race, age, taste, and preferences.

Here what matters is your prowess in digital marketing. The topic is the ocean. There is so much to say like:

  • product design and packaging,
  • website design and content delivery,
  • text or video or audio content delivery,
  • paid traffic versus organic traffic,
  • onsite community cultivation versus building a community on social media,
  • and many more elements specific to digital marketing.

But the bottom line is, with the mastery of digital marketing, the opportunities are endless. The most important thing is, it opens new frontiers for your products. We will discuss that topic in the next point.

Here is a quick summary for this section

  • High demand for beauty products opens a marketing opportunity in both local and international markets.
  • For a local market with limited capital, you can open a stall along a busy street which will always payback.
  • For a local market with comfortable funds, you can open a wholesale business to take advantage of customers in the lower tier of the supply chain. Both the retailer and the customer.
  • To take advantage of the international beauty products market, you will have to leverage the power of digital marketing.
  • Digital Marketing opens endless possibilities like an open store all year-round, sell the product as you sleep, sell to the whole world without border limitations, and many more.

6

DIGITAL MARKETING OFFERS ENDLESS POSSIBILITY TO MAX YOUR BEAUTY BUSINESS PROFITS

In the previous point, we saw that digital marketing is an eye-opener for beauty products.

And like I noted, the topic of digital marketing is so vast. It is not a topic to fully cover in a small section of an article. We better leave it to the professionals and a dedicated topic or book.

However, I want to sprinkle some seeds in the soil for you to water and germinate. First, the internet is a blessing to beauty products. It presents two broad ways to marketing.

  • Either marketing using social media outlets
  • or using your own website that has a hosted virtual store and a blog.

To digest this information effortlessly, let us first tackle how social media can help you max your profits.

The social Media Approach to Marketing Beauty Products

The manufacturer, wholesalers, retailers, and freelancers stand in a better position to take advantage of social media to market beauty products to their audiences.

One of the best approaches to popularize a product is through creating community and followers.

A platform like Pinterest, Facebook, Instagram, and YouTube will give you a monumental opening to market your products.

Something to note, you can complicate the process, or you can make it easier. I advise you make your marketing process effortless.

First, you need to limit your options.

For a Kenyan audience, start by creating a community around a Facebook page or start pinning captivating pictures in your Pinterest account.

Both platforms will rely heavily on images to grow fast and gain traction quickly. So, you must learn how to create clean and crisp images for your products regularly.

Also, try to contract some beautiful models worth a stare. They will create the virality you need to grow your audiences and increase Pinterest pins share.

If you want to spend money to build an audience and promote your product, learning each’s platform paid ads model will be a massive boost. However, if pursuing social media marketing is not an option, I suggest hiring an experienced ads manager for your preferred platform. Though it will be costly, you will get quick results.

When it comes to paid publicity, you will spend a couple of thousands of shillings before getting the results you want. But when the ROI for ads expenditure is high, you will laugh all the way to the bank. I’ve tested the model, and I can assure you, it works when executed with professionalism.

The above step is easier said than done. Also, there are so many variables not said. However, regardless of your experience with social media marketing, I have sparked some ideas in your head.

Let us handle the website marketing in the next section..

The Website Approach to Marketing Beauty Products

Besides social media, this option will be great for wholesalers, beauty product freelancers, and manufacturers.

For retailers, unless you are doing freelancing, this will be too much of a burden to carry. I suggest you stick with social media marketing unless the website is a hobby.

Nevertheless, for freelancers, wholesalers, and manufacturers, a website will give you a platform for two things.

  1. Host a virtual online shop
  2. Share mini-stories.

A virtual shop is the same as a normal shop, but it is hosted online.

Unlike the traditional brick and mortar business, where customers have to physically avail themselves to pick the products, virtual store customers have to opt for limited shipping. Either you will offer free shipping costs, or they will have to pay an extra fee for shipping.

When it comes to the marketing bit of it, that’s where we can write several books on the topic.

But let’s simplify the process by tackling the mini-stories in succinct.

For instance, an article like this one is a part of BiasharaTalk mini-stories. It is hosted on the website’s blog. However, I have a store and a virtual academy where I host digital premium products like eBooks and courses (Everything in place, writing and shooting courses in progress).

In the same manner, you also owe to share invaluable insights about the beauty niche. In the process, you link back to your store. People reading your mini stories will be inspired and definitely want to buy from you.

The second portion is what we call advertisement.

Advertisements can be either through social media marketing campaigns or from Google ads or Bing Ads and other ads and traffic channels.

Regardless of the channel, the end goal is to drive traffic to your mini-stories or product landing pages.

This part of the article has been a scratch on the surface of digital marketing. It is as wide as many words I have tried to squeeze in this section.

But here is something worth remembering from this section. Because of the popularity of beauty products, adopting digital marketing strategies will be a sure bet to boost your revenues.

Here is a quick summary for this section

  • There are two broad avenues to market your beauty products – using social media and using a website.
  • Social media marketing is favorable for freelances, retailers, wholesalers, and manufacturers. To be more successful, limit your options to few working platforms. Start with Facebook and Pinterest first. Get results, then expand. If you do not have experience and have a fair amount of money, hire an expert to do outreach and ads. Otherwise, invest in learning and scaling in incremental steps.
  • A website is a more involving platform as it needs a lot of attention. It is favorable to freelancers, wholesalers, and manufacturers. To reap more benefits from it, host a store and blog to complement each other. Let the blog drive traffic to the products. You can also use paid traffic by creating ads, just as in social media marketing.
  • To reap the benefit of both website and social media, run them concurrently. Own your audiences by channeling the social media audience to your website.

7

THERE ARE VARIETIES OF COSMETIC PRODUCTS TO SELL

Have you ever come across someone who is extremely particular about their tastes and preferences for a beauty product?

For example, such a person will express sentiments like... I prefer using shear lipstick because it gives my lips a soft and hydrated appearance than creamy, mate, or lip stains lipstick. In a different example, another may add, I need a liquid foundation number 3 because it blends well with my skin, unlike number 1, which is for light skin people.

The sheer amount of description is specific to the individual desires. It makes them be who they are. May it that such attention to detail mean happiness or confidence to them, regardless of what it translates to, beauty products are of various types and quality. These minute refined details cuts across all beauty products; skincare, haircare, makeup, and fragrance.

Let’s have a closer to these categories.

Skin care Products

Skincare products are the highest demanded product in the market.

Both men and women need them daily to enhance their appearance.

Research shows that 30% of beauty products sold in the market are in the skincare category.

And depending on the different types of human skin - sensitive, itchy, oily, dry, or normal - there are custom skincare products for each category to serve the demand in the market.

Besides, bleaching and whitening products to make skin glow or look brighter are among the most popular products consumed by men and women.

A perfect example of these products includes toners, cleansers, skin moisturizers, body lotion, and anti-acne.

Makeup Beauty Products

Makeup products are also referred to as decorative cosmetics.

They are used by ladies to apply on their face, lips, eyes, and nails.

These products include mascara, foundation, lipsticks, eyeliners, eye pencils, face powder, brushes, makeup remover, nail polish, and many more.

Hair Beauty Products

Hair products are used by both men and women to take care of hair. They are used to maintain and enhance kinky, coil, curly, colored, and loc’s hairs.

An example of these products includes hair shampoo, treatment mask, conditioner, hair jelly, dyes, relaxer, weaves, and styling jelly.

They are used to clean the scalp and hair strands.

However, if you are keen enough, you will notice that saloons and barbershops are the biggest consumers of these products. Because they use these hair care beauty products daily.

Also, men nowadays have fallen in this category, especially those using these products to re-do their dreadlocks or maintaining their afro.

Fragrance

These are the type of beauty products which often receive a small percentage of sales. However, they make lucrative amounts of profits than you can ever imagine.

Examples of these products include citrus, woody, gourmand, perfumes, and toilette perfume.

As you can tell, there are many varieties of beauty products. However, every unique product is meticulously crafted to meet a specific demand in the market.

 All it means to a person like you, there is a market to sell your beauty product. And if there is a market, there is an opportunity to make a profit.

Here is a quick summary for this section

  • Beauty products have different categories that include fragrance, hair care, make-up, and skincare products.
  • The availability of more than a dozen beauty products in the market gives a trader a wide range of products to serve the market with different tastes and demands

Should You Start A Beauty Shop?

This has been a long and comprehensive article. I have tried to explore every point in-depth, covering the possibilities of each argument from all angles.

My hope is that the guide has given you insights and energy to start your own beauty shop.

Be the judge, but don’t take long to make a decision. Make haste while the energy is high.

Of course, there are challenges. However, what matters we’ve shone 7 positive reasons to start a beauty shop.

It’s now your turn to toss yourself in the market.

With that, perhaps you feel there is more to discuss. Or there is an extra item to add. Don’t hold that idea, just head to the comment section and drop us a message. And don’t forget to share this article with your friends and family.

Mark Njoroge

Meet Mark. He is one of the co-founders of Biasharatalk. He's on an adventure to make business ecosystem survivable because he believes the world is ruthless for another choppy startup. That's why he has sworn to make your business life painless, fun, and hopeful. Join him at Biasharatalk as he passionately chats about latest proven business strategies.

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