The Top 5 Challenges in Beauty and Cosmetics Fulfillment
Globally, the beauty and cosmetics market was valued at 262.21 billion dollars in 2022, with an expected growth rate of 4.2% from 2023-2030. This constantly expanding industry has experienced its fair share of growing pains, including challenges with beauty and cosmetics fulfillment.
Beauty and cosmetics brands have a lot to consider when choosing a fulfillment partner. High SKU counts, expiration date management, and climate-control compliance are just a few of the many challenges companies need to overcome to have effective distribution channels for cosmetic products. Partnering with the right third-party logistics (3PL) provider can ease these challenges, allowing for a more streamlined and reliable supply chain.
Beauty and Cosmetics Fulfillment Challenges
Positioning a cosmetics brand for success is heavily reliant on being able to successfully distribute product. If supply chain challenges put up roadblocks, it becomes nearly impossible to build a brand that is a trusted consumer choice. Knowing the challenges of beauty fulfillment and how a 3PL provider can help ease those challenges is key to a successful beauty brand.
Problem: Temperature sensitivity
Beauty and cosmetics products often have ingredients that are extremely sensitive to fluctuations in temperature. Being exposed to high temperatures can cause premature spoilage and degradation of quality. Warehousing and order fulfillment for cosmetics and beauty requires a climate-controlled environment without exposure to extreme temperatures.
Solution: A climate-controlled facility.
A distribution and fulfillment partner with a climate-controlled facility will assist in ensuring beauty and cosmetics products’ quality. These facilities will stay in a specific temperature range, preventing those products from experiencing extreme heat or cold.
If beauty and cosmetics products need to be kept at a specific temperature according to their formulas, a temperature-controlled facility will be a better option. A temperature-controlled facility will keep products at a specific temperature until they are ready for transport and delivery.
Problem: Expiration management
The cosmetic and beauty industry experiences a great deal of product spoilage. In fact, Global Cosmetic Industry reports that the industry has the highest amount of lost inventory at 6.2% – an approximate value of 4.8 billion dollars. Expiration dates, lot management, along with the ability to call back products subject to recall are all vital to successful beauty and cosmetics fulfillment.
Solution: A robust lot lifecycle management system
For effective inventory management, and to reduce the amount of product spoilage, beauty product fulfillment should include a full lot lifecycle management system. A 3PL or 4PL with this system will be able to manage expected expiration, and work on a first-expired-first-out (FEFO) or first-in-first-out (FIFO) distribution system, keeping inventory fresh and stable until it’s ready to be transported.
This also allows beauty brands to meet retailer requirements. Often, a retailer will require that they receive cosmetic products a certain number of days ahead of expiration. A lot lifecycle management system will organize this information and help to meet the regulations set out by retail partners.
Problem: SKU management
The SKU breadth in the beauty industry is tremendous. Each product can have multiple color and size options, creating hundreds of SKUs. At the same time, inventory density of these SKUs is relatively low, which necessitates a single location for all products to support expiration management and streamline distribution and fulfillment.
Solution: A strategic location and powerful technology solutions
A strategically located warehouse will allow beauty and cosmetic companies to fulfill product orders faster. As customers have come to expect shorter fulfillment times, the importance of a centrally located space has become more apparent. Major city hubs like Dallas-Fort Worth, TX and Indianapolis, IN are ideal locations – aiding order fulfillment by reaching 98% of the United States in 3 days or less.
The distribution and fulfillment partner of choice can have enough space to manage all product SKUs. It’s important not to split warehousing and fulfillment between multiple locations based on channel – ecommerce, retail, or otherwise. Having more than one location can significantly and negatively impact expiration and inventory management. With an omnichannel fulfillment approach, a 3PL/4PL will be able to store beauty products in a single location, while fulfilling orders from any channel – whether it be retail, brick and mortar, or ecommerce.
Beauty and cosmetics products are often sent as gift items, especially come holiday season. Gift bags, boxes, and holiday kits are a significant portion of business sales and come with a host of challenges. Adding in virtual SKUs from ecommerce can further complicate inventory management, as many virtual SKUs require additional kitting services.
Beyond kitting, customizations are seen in the marketing inserts, promotional materials, and packaging for beauty products. The unboxing experience of beauty products is a significant promotional opportunity, necessitating specific and brand-centric packaging options. With the packaging varying from product-to-product, many different warehouse flows need to be created and optimized.
Solution: Kitting as a service, with the ability to customize operations
Experienced distribution companies will offer kitting as a service. Individual components will be put together in a kit designed to match the exact specifications laid out by each beauty and cosmetics company. Whether the shipment is a subscription box, gift bag, or something else entirely, the right 3PL/4PL will be able to create a packaging experience for the customer.
The right provider will also be able to send samples, flex between build-to-stock and build-to-order, include necessary promotional items, and truly support the beauty brand’s growth through customization and optimization of distribution and order fulfillment.
Problem: Sustainability requirements
Many cosmetics brands are leaning heavily into sustainability, both with the products themselves and with packaging. It can be challenging to find a distribution and fulfillment partner that supports recycled packaging, tape, and dunnage, or one that can eliminate paper use with packaging.
Solution: A 3PL/4PL that values sustainability, and has the technology and packaging to support those efforts
While finding a symbiotic partnership where sustainability is a main focus may sound challenging, many beauty and cosmetics fulfillment partners will have recycled options. The right partner for a sustainability-focused beauty brand will offer the recycled packaging, tape, and dunnage that is needed.
If removing the physical paper from packaging is of high importance for the brand, the 3PL/4PL chosen should have options. One such option is to work with a partner than can either print the pack slip on the back of a shipping label, or support efforts to digitally send pack slips.
ITS Logistics is the top choice for cosmetics and beauty fulfillment
At ITS Logistics, every piece of beauty product fulfillment is customized to fit the brand. The newest warehouse location in Dallas Fort-Worth, TX offers a climate-controlled space, optimized to support the flows needed for omnichannel fulfillment of cosmetic products. All of the ITS warehouse locations are AIB food-grade locations, ensuring proper handling, cleaning, and pest management among other requirements.
At the very start of a cosmetic fulfillment & distribution inquiry, the team at ITS Logistics begins to build out a customized footprint and set of requirements for the brand. Storage, picking and packing, kitting, sustainability requirements, and all other needs are considered, and the beauty brand is presented with a custom solution designed to specifically meet its needs. Technology is woven throughout the process, streamlining the process of expiration and SKU management.
Looking for a new fulfillment provider?
Call ITS Logistics today at (775) 204-5378, or reach out online. A cosmetics and beauty fulfillment expert is standing by to walk through what offerings and customizations are best suited to support brand expansion.