Order Fulfilment for Cosmetics: A Definitive Guide

22/12/2023

Order Fulfilment for Cosmetics: A Definitive Guide

Cosmetics is one of the largest segments in eCommerce. The beauty and personal care market stood at a $511 billion valuation in 2021 and it’s estimated to cross $784.6 billion in 2025. Estimates show a growth rate of 4.75% globally.

Worldwide market value of beauty and personal care products

The industry has significantly grown in the past few years. It experienced stagnation during the pandemic. But, it bounced back with even higher year-on-year growth in 2022.

Percent change in overall market growth of beauty and personal care industry

What is the Importance of Ecommerce Order Fulfilment in Cosmetics?

The growth of the eCommerce industry post-pandemic can be largely attributed to the rise of eCommerce sales. While the percentage change has declined. The value of cosmetics eCommerce sales has consistently increased. The revenue from online sales in cosmetics is estimated to cross $99.12 billion in 2023.

Retail ecommerce sales of health, personal care and beauty products

In the US, the biggest market for cosmetics eCommerce, online sales accounted for 21% of all retail sales in 2022. On average 42% of consumers prefer to shop online for cosmetic products. Online purchase decisions are heavily dependent on order fulfilment for cosmetics.

Deciding factors in online purchase

Cosmetics fulfilment and reverse logistics play a major role in influencing purchasing decisions. Ecommerce cosmetics shoppers show a preference for brands that offer fast shipping, free shipping and free returns. 

Each of these factors depends on the fulfilment solution for cosmetics. Let’s see what are the major logistics factors that affect eCommerce order fulfilment for cosmetics.

6 Crucial Factors for Cosmetics Fulfilment

Cosmetics product fulfilment is unique. The contents and packaging of these products are sensitive to environmental conditions. Cosmetics products require special handling during storage and transportation. Let’s look at some of the most important factors for eCommerce order fulfilment for cosmetics.

1. Time Constraints

Cosmetic products are more time sensitive compared to other products. The contents of cosmetic products are perishable. Hence, they are marked with an expiration date. Using these products past the expiration date can be harmful to the customers. 

Furthermore, you also need to consider the shelf life of the products after opening.

The shelf life of these products plays a crucial role in order fulfilment for cosmetics. The products should reach the customers with maximum possible shelf life.

Impact of shelf life on cosmetics order fulfilment

These time constraints are crucial for warehousing, inventory management, and shipping. You need to optimise the inventory management process to reduce the time in storage. This will help you reduce overstocking and wastage.

For warehousing, you need to consider the product’s shelf life and the time in use. You need to factor in these windows when picking products for shipping cosmetics. In order fulfilment for cosmetics, older products are shipped first. 

You need to lay out a cosmetics fulfilment centre for easy access to older products. This will help you reduce the picking and packing time. As a result, you can provide faster fulfilment solutions for cosmetics.

2. Regulations & Compliances

Many cosmetics products need to follow storage and shipping compliance regulations. The applicable laws would differ from country to country. The logistics company handling fulfilment for cosmetics needs to adhere to these regulations.

For example, cosmetics fulfilment in Europe needs to adhere to Regulation (EC) No. 1223/2009 of the European Parliament and of the Council. This regulation mandates temperature control, traceability, and condition monitoring. 

You need to identify the applicable regulations for eCommerce order fulfilment for cosmetics. Then you need to make provisions to uphold these regulations. Or you can partner with an order fulfilment service that can facilitate the necessary conditions.

You also need to consider customs regulations if cosmetics fulfilment involves international shipping.  These regulations would be applicable for export, international shipping, and import. 

You also need to understand the standardisation of shipping documents for cosmetics fulfilment. This is because many cosmetics products are classified as dangerous goods. So you need proper certifications, documents, and labels for the international fulfilment of cosmetics.

3. Environmental Conditions

Cosmetic products are sensitive to temperature, moisture, and other environmental conditions. These factors can have a significant impact on the shelf life of these products. Hence, most warehouses store cosmetics products separately from other items. 

In many countries, these conditions are mandatory to fulfil regulatory requirements. The temperature is usually maintained between 15 to 25° C. And the humidity between 35% to 65% RH.

You also need to monitor environmental conditions for shipping cosmetic products. This can prove more challenging compared to warehousing. Hence, it is best to keep shipping cycles as short as possible.

You need to optimise the logistics distribution strategy to control the shipping time. If the cosmetics fulfilment centres are closer to the target markets, you can reduce the shipping time. This will allow you to reduce environmental exposure while shipping.

4. Sustainable & Ethical Practices

Sustainability and ethical practices are among the biggest concerns of cosmetics brands. They are one of the most crucial factors in all aspects of the cosmetics supply chain. These practices are mandatory to fulfil regulatory requirements. They are also necessary to acquire certifications to distribute cosmetic products.  

Additionally, consumers show a preference for cosmetics brands that adhere to ethical and sustainable practices. 42% of consumers look at the sustainability practices of a brand when shopping for cosmetics. And 26% of cosmetics consumers are more likely to purchase from a brand that supports social causes.

Top purchase influencers for beauty shoppers

The scope of sustainable and ethical practices goes beyond manufacturing. Brands must adhere to these practices for storage, packaging, and eCommerce order fulfilment for cosmetics. This requires using sustainable materials for shipping packages. It also involves ethical and environmental responsibility for storage and transportation. 

5. Trend Management

The demand for cosmetic products is often driven by trends and seasonality. This can create challenges for inventory management. Logistics operations for cosmetics fulfilment centres need to strike a balance between supply and demand. This is necessary to prevent overstocking or understocking.

As cosmetics products have a limited shelf life, overstocking may lead to dead stock. And these products incur significant maintenance expenses. Overstocking also reduces the time available for the customer to use the product. 

At the same time, stockouts can result in poor customer experiences. Such scenarios can damage the brand’s reputation and margins. Cosmetics supply fulfilment needs to react to market trends. This is necessary to control the inventory levels in cosmetics fulfilment centres. 

6. Fast Delivery

Fast shipping has a major influence on all eCommerce purchase decisions. Cosmetics consumers are no different. 26% of buyers want fast eCommerce order fulfilment for cosmetics. This means customers expect delivery within two days of placing the order. Adhering to these standards requires streamlined logistics operations.

At the same time, consumers also favour free shipping. These expectations can be quite expensive to manage. On average shipping costs are responsible for 7.77% of the total revenue. Cosmetics fulfilment needs to be fast and cheap. This is necessary to ensure profitability for the brand and satisfaction for the consumer.

8 Best Practices for Order Fulfilment for Cosmetics

Streamlined order fulfilment for cosmetics has several benefits. It can reduce costs, ensure compliance, and reduce delivery time. You need to optimise several logistics processes to achieve this. 

The best practices of cosmetics fulfilment involve distribution, warehousing, inventory management, packaging, and shipping. Let’s look at some tactics to help you improve eCommerce order fulfilment for cosmetics.

1. FIFO / FEFO Inventory Management

FIFO stands for first in first out. It is an inventory management system for cosmetics product fulfilment. In this method, you arrange the stock and pick products based on the receiving schedule. The products that are stocked first are the first to get picked.

FIFO inventory management method

Fulfilment solutions for cosmetics can also use the FEFO — first expired first out — method. In FEFO, you first pick the products that are closest to the expiry date. 

You can employ these methods in your cosmetics fulfilment centres. And you need to implement it for each SKU. It can help you reduce the risk of stocking expired products. It also facilitates your customers with the maximum possible shelf life.

2. Lot Tracking

Lot tracking is a system to trace the inventory. It can link the products to their sources. These include suppliers or manufacturers. Lot tracking can also establish a link between products and their attributes. These can include the production date, expiration date, ingredients, etc. 

Cosmetics fulfilment centres can use barcodes and scanners for Lot tracking. This can help you organise the inventory in your warehouse. It can also assist in picking inventory for shipping. You can organise the inventory based on demand, expiration date, storage requirements, and so on. The lot makes it easy to store and ship products for eCommerce order fulfilment for cosmetics.

The lot tracking also facilitates complete visibility over stored inventory. You can also track the inventory committed for order fulfilment. This data coupled with demand forecasting can help you manage cosmetics supply fulfilment.

Lot allows you to track the inventory spread across several cosmetics fulfilment centres. This is crucial for efficient logistics distribution. You can still track your inventory even if you are using a 3PL company for cosmetics fulfilment.

3. Strategic Logistics Distribution

Logistics distribution involves planning the storage and transportation of inventory. You need to identify the ideal locations for your cosmetics fulfilment centres. These locations should be based on different target markets.

Impact of delivery location on logistics and order fulfilment for cosmetics

Then you need to organise cosmetics supply fulfilment to these locations. The flow of supply should be based on the demand forecast in target markets. So instead of storing a lot of inventory in one location. You will have distributed inventory to micro-fulfilment centres in various locations.

Then your order-processing can assign fulfilment to the location closest to the customer. This also reduces the shipping distance. Hence, you can complete eCommerce order fulfilment for cosmetics faster and cheaper. 

This strategy can also help you distribute cosmetics supply fulfilment between different locations. It can also counteract overstocking or understocking at cosmetics fulfilment centres.

4. Compliance Management

Cosmetics products are classified as industrial chemicals in many countries. These products are regulated by government bodies. For instance, cosmetics products are regulated by the FDA in the USA. Similarly, they are regulated by TGA and ACCC in Australia.

These regulations are applicable at several stages of the product’s lifecycle. It includes sourcing, procurement, manufacturing, storing, packaging, and shipping. You need to comply with applicable regulations for cosmetics fulfilment.

Compliance management for order fulfilment of cosmetic products involves:

  • Warehouse condition compliance
  • Protective, leak-proof, and durable packaging
  • Segregated packaging for hazardous materials
  • Shipment tracking
  • Shipping declaration
  • Temperature control
  • Appropriate labelling
  • Shipping documentation & certifications
  • Quantity compliance
  • Handling personnel qualification
  • Handling equipment compliance

Compliance management for cosmetics fulfilment also depends on the mode of transport. For instance, USPS does not allow domestic air freight for perfumes containing alcohol. However, you can ship them by road freight.

Ecommerce order fulfilment for cosmetics also needs to follow hazmat shipping regulations. These regulations are applicable for both domestic and international cosmetics fulfilment.

5. Hazmat Shipping

Cosmetics products are classified as hazardous materials by many regulatory bodies. These include local governance and international transportation authorities. This means you require special handling, labelling, and packaging for cosmetic product fulfilment. The below table shows labelling requirements defined by the European Union.

Hazmat Chart

Cosmetics products also require special packaging and handling during transportation. These regulations are defined by domestic and international transport regulatory bodies. The regulations may differ based on region and modes of transportation.

If you are shipping dangerous goods internationally by sea, you need to adhere to the International Maritime Dangerous Goods (IMDG) Code defined by the International Maritime Organisation (IMO). On the other hand, if you are shipping hazardous materials by air, you should follow the Dangerous Goods Regulations (DGR) Manual defined by the International Air Transport Association (IATA).

As cosmetic products are hazmat, you also need to declare these products for shipping. This declaration is part of several documents such as:

  • Commercial Invoices
  • Cargo Reports 
  • Air Waybill (for air freight
  • Bill of Lading (for sea freight)
  • Certificate of Origin

You also need to declare hazmat for import and export customs clearance. You also have to pay customs duty for order fulfilment of cosmetic products. These charges can increase the cost of shipping. 

Hence, you need to estimate these charges when pricing the products. Or, you can hire a logistics company to provide fulfilment solutions for cosmetics. This can help you manage international distribution cost-effectively. It also relieves you of the burden of hazmat compliance for cosmetics fulfilment.

6. Sustainable & Efficient Packaging

Packaging is one of the most crucial aspects of order fulfilment for cosmetics. It affects compliance, handling, shipping costs, and customer experience. The most important aspects of packaging to consider include:

  • Protection
  • Compliance
  • Sustainability
  • Efficiency

The shipping packages are a part of tertiary packaging. They have to protect the products as well as other layers of packaging. The shipping packaging is also crucial for conditions control for cosmetics product fulfilment. 

Protective packaging is also mandatory under government regulations. Cosmetics products need to withstand several hazards during transportation. These include environmental conditions and physical shocks. That is why fulfilment solution for cosmetics often requires special packaging. For instance, you will often find silicone bags in the packaging. These little pouches protect the products from moisture.

Another important factor for cosmetics packaging is sustainability. It is a part of ethical practices and adds to the appeal of the products. Sustainable packaging has a significant influence on the buying decisions of cosmetics shoppers.  26% of beauty shoppers prefer to buy from a brand that uses sustainable materials.

Factors driving cosmetics purchases

You can also use sustainable materials to create a unique unboxing experience. You can use wrapping paper, threads, grass, sawdust, etc. for packaging. This would add to the appeal of the product. It can especially accentuate the perception of organic and natural products. 

Finally, you need to focus on efficient packaging for cosmetics fulfilment. This can help you control storage space and shipping charges. You can use different types of packaging for different stages of cosmetics fulfilment.

For example, you can switch a box with a polybag for last-mile delivery. This will reduce the volumetric weight of the package. It is also easier to pack and handle. You can further improve packaging efficiency by kitting products at the cosmetics fulfilment centre for shipping.

7. Kitting Products

Kitting involves grouping different products based on certain criteria. These can be promotions, free samples, cross-selling, or product subscriptions. You can apply this method at many stages of eCommerce order fulfilment for cosmetics. You can use it for inventory management, warehouse management, product packaging, and cosmetics product fulfilment.

Examples of kitting for cosmetics products

You first need to identify the products that can form a kit. These are usually the products that people purchase together. You can sell these products as a kit or a gift set. This can help you increase the average order value of the products. It also improves order accuracy at your cosmetics fulfilment centre. Furthermore, such kits can also encourage subscriptions to your brand.

Product kits can significantly improve inventory management and warehouse organisation. You create kits to arrange the products in a cosmetics fulfilment centre. This will help you speed up the picking and packing process. Kitting can also help you ship more products together. This improves packaging efficiency and reduces shipping costs.

8. Cosmetics Order Fulfilment & Reverse Logistics

Consumers’ decision to shop online heavily depends on fulfilment solution for cosmetics. 66% of cosmetics consumers show a preference for free shipping. 23% of consumers want fast shipping. And 11% of consumers are attracted by free and easy returns. 

Each of these falls under logistics. But offering these services is neither easy nor cost-effective. It requires exceptionally streamlined operations throughout the supply chain. For cosmetics fulfilment you need to streamline the following operations:

  • Inventory Management
  • Picking & Packaging
  • Shipping
  • Last-Mile Delivery
  • Reverse Logistics

Each of these operations contributes to the efficiency of the other. For example, efficient inventory management makes picking easier and faster. This reduces the chances of shipping the wrong products. Consequently, it reduces the return rate.

Similarly, efficient reverse logistics can help with inventory management. You need to catalogue returned products. This will help you to manage them based on their condition. If the product is in proper condition, you can add it back to the inventory. 

But, you need to follow the FEFO method at the cosmetics fulfilment centre. This will ensure that you catalogue the returned products based on their expiry date. You will accurately ship products that are closer to the expiry date. It will help you reduce wastage. 

Another crucial aspect of eCommerce order fulfilment for cosmetics is product subscriptions. Many cosmetics consumers sign up for product subscriptions. This can be for individual products or kits. The product subscription trend is prevalent among cosmetics consumers.

Shoppers who signed up for one or more subscription services

You need to deliver these kits periodically to the customer. Some customers may even demand early or late delivery for subscribed products. Your fulfilment solution for cosmetics should facilitate the customer's demands. 

Product subscriptions play a crucial role in customer retention and brand loyalty. These in turn have a direct impact on revenue. A missed delivery or a delay can create an unsavoury customer experience. Managing these subscriptions requires efficiency with inventory management and shipping schedule. 

You can set up a delivery schedule with your vehicle fleet that runs independently from other shipping operations. Or you can hire a 3PL logistics partner to manage eCommerce order fulfilment for cosmetics subscriptions. 

Use a Logistics Partner for Efficent Cosmetics Order Fulfilment

Use a Logistics Partner for Efficent Cosmetics Order Fulfilment

The demand for cosmetics products is higher than ever. At the same time, consumers have also become more demanding. Ecommerce order fulfilment for cosmetics plays an important role in managing customer satisfaction. But, it is also one of the biggest cost-aggravating factors.

Logistics operations are resource intensive. You need a fast and efficient fulfilment solution for cosmetics. It is necessary to keep up with customer demand as well as to maintain profitability. You can avail of eCommerce fulfilment services by PACK & SEND for your cosmetics brand. You can get cost-effective domestic and international fulfilment solutions without compromising on speed and efficiency.

FAQs

How to do order fulfillment for cosmetics?

Cosmetics order fulfilment can be a little tricky. It necessitates several precautions and compliance measures. You need efficient inventory management system to process the cosmetics order fulfilment. You also need a reliable logistics solutions to deliver the products to your customers without damage.  

How much cosmetics order fulfillment costs?

The cost of cosmetics order fulfilment depends on several factors. These include product type, hazmat requirements, volumetric weight, and shipping distance. Cosmetics order fulfilment costs also depend on your distribution strategy. You can use this postage calculator to find the shipping cost for cosmetics order fulfilment. 

Which courier services I can use to do order fulfillment for cosmetics?

You need a reliable courier service to do order fulfilment for cosmetics. These products have special handling and storage requirements. They also need to be shipped with speed and efficiency. You can use PACK & SEND’s order fulfilment solutions to complete order fulfilment for cosmetic products.

Image sources: Common Thread Collective, Dotcom Distribution, Buzzfeed, Red Stage FulfilmentRakuten, SpringerOpen

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