Okay, so let’s say you have bought lots of lovely high end wholesale makeup from MAC, Benefit etc through the brilliant suppliers you have found. You are ready to sell your stash but you are not sure how best to go about pricing it. You want to get the best possible profit margin, while still ensuring your prices are competitive enough to encourage as many customers as possible to buy their beauty and cosmetics goodies from you instead of elsewhere.
When asked recently about my thoughts on pricing for wholesale makeup, and I must admit that it is something that kind of stumped me for a definitive answer. I have been selling wholesale makeup for so long now that I just instinctively set a price without working through any given formula. On reflection, I would say that the following are the main factors that go into my instantaneous melting pot when setting a selling price:
1. Cost price. Work out the total cost of the item to you including any shipping and taxes. I usually just divide the shipping and taxes amount by the number of items and add that proportion of cost onto each item.
2. Desired markup. Obviously the selling price must always be higher than the cost calculated above. No exceptions. My minimum desired markup is 2x (i.e. 2 times cost or 100% markup). The markup is always AFTER any selling fees and paypal fees (if appropriate) have been deducted from the selling price. Usually, if I do not think that I can achieve the minimum desired markup I would not by the item in the first place. Exceptions to this are high end wholesale makeup products which I know I can sell quickly at a profit, even if the profit is not 2x. Those types of items represent easy profit with minimum stock holding cost. For example, if I can make £50 profit on a £100 order that will likely sell out in a couple of days, then it would be rude not to. Luckily, sometimes it is possible to achieve a much higher markup than 2x on rare or in demand cosmetics items. Examples would be discontinued brands like Prescriptives, or MAC special editions – when you see these snap them up before someone else does and charge the highest price possible!!
3. Customer and marketplace. Who I am selling to, and where, will determine any selling costs (e.g. eBay and Paypal fees), and the top price which the customer is likely to pay (based on the competition in the marketplace, i.e. what any other sellers are charging for the same makeup or a similar cosmetics or beauty item). So on eBay the customer is very price conscious, there is lots of competition and my price range and selling fees are largely predetermined. Alternatively, if I sell privately to friends or colleagues my competition and fees are pretty much zero as long as I can undercut the general mainstream high street or online selling price.
These are just guidelines and hopefully a useful starting point for testing your wholesale makeup pricing. In reality you will soon discover the correct price level for any beauty product because if it is priced too high for your market it will not sell. If it is priced too low you will sell out quickly and kick yourself for not pricing it higher. Patience is a virtue and a slow but sure trick is to keep either increasing or reducing the price for the same product until you find the optimum price point.
My main tips would be to minimise your cost price by buying wisely from trusted wholesale cosmetics sellers such as those you will find on Cheap Slap, and also to always sell in a marketplace with minimum competition so you can command a higher selling price.