Online sales of cosmetic and personal care products continue to grow despite the return to retail shopping following the COVID-19 pandemic. As reported by data gathering and visualization platform Statista, “in 2023, the cosmetics and beauty e-commerce industry in the United States is expected to generate roughly 86 billion U.S. dollars in sales, and this figure is forecast to reach over 94 billion U.S. dollars by 2026.”
Further, Statista reports, “the revenue in the 'Personal Care' segment of the E-commerce market in the United States was forecast to continuously increase between 2023 and 2027 by in total 22.7 billion U.S. dollars (+42.4 percent), and after the ninth consecutive increasing year, the indicator is estimated to reach 76.2 billion U.S. dollars and therefore a new peak in 2027.”
But where are US consumers most likely to purchase cosmetic and personal care products when shopping online? “According to a survey conducted in 2023, consumers in the United States are most likely to complete beauty purchases on Amazon.” The survey determined that “almost one in four reported purchasing beauty products on Amazon, while around 23 percent revealed doing so on Walmart.”
Considering that Amazon and Walmart’s digital storefronts therefore comprise nearly half of US consumer purchases in these categories, it is exceptionally valuable that manufacturers and suppliers to these industries understand the nuances of how brands can successfully navigate these online storefronts.
To learn more about what cosmetics and personal care product manufacturers and suppliers should consider regarding where brand formulators sell their products, special considerations that should be made regarding specific ingredients and e-commerce sales, and how to navigate the changing landscape of regulatory compliance on digital sales platforms, CosmeticsDesign spoke with Denny Smolinski, founder of beBOLD Digital, a full service Amazon and Walmart Agency that serves the e-Commerce needs of beauty, health, and wellness brands for his insights.
CDU: Can you briefly share your industry background and experience?
Denny Smolinski (DS): I am a software engineer turned beauty product entrepreneur. I started selling everyone else's products on Amazon back in 2008 (which makes me a dinosaur).
As everyone else figured out how to sell on Amazon, I created my own brand of products which I sold through professional distribution, HSN (Home Shopping Network), D2C and of course Amazon.
In 2018, I start beBOLD Digital, which is a Full Service Amazon and Walmart Agency with focus only beauty and health & wellness. Each team member of beBOLD has some type of beauty experience whether as a digital marketing, working for a beauty brand or experience in the beauty industry. beBOLD is passionate about helping brands succeed both on Amazon and Walmart.
beBOLD offers a free analysis of your beauty brand to give you the best way to achieve your goals.
CDU: Should manufacturers and suppliers to the cosmetics and personal beauty care product industries take into consideration where brand formulators are selling their products? Why or why not?
DS: Yes, manufacturers and suppliers to the cosmetics and personal beauty care product industries should definitely take into consideration where brand formulators are selling their products. The choice of distribution channel plays an integral role in how a brand is perceived by consumers.
For example, a brand selling primarily on Amazon or Walmart.com may be seen as more accessible and budget-friendly, while a brand that opts for distribution through high-end retailers may cultivate an image of luxury and exclusivity.
Understanding these dynamics allows manufacturers and suppliers to align their strategies accordingly, from pricing to packaging design, and to create products that resonate with the target audience of each sales channel. Therefore, the choice of platform is not merely a distribution decision, but an essential part of brand positioning and market strategy.
CDU: Are there any common cosmetics or personal beauty care product ingredients that require special consideration when brands seek to list products on either platform? If so, what are those ingredients and what considerations should be made before listing them?
DS: Yes, there are several common ingredients in cosmetics and personal beauty care products that require special consideration when brands list products on platforms like Walmart and Amazon. Both platforms will require you to provide an SDS (Safety Data Sheet) to ensure there are no banned ingredients.
Ingredients such as Hydroquinone, used for skin lightening, and certain types of Parabens, used as preservatives, may have restrictions due to potential health risks. Brands should thoroughly research and comply with the specific rules and regulations set by these platforms and governing bodies in their respective markets.
Any products that contain CBD cannot be sold on Amazon or Walmart.com because CBD is not federally legal (as of yet). My feeling is that both platforms would love to sell CBD products but legally they cannot.
Amazon and Walmart have their own specific labeling requirements that must be met for certain types of hazardous ingredients, so it is important to familiarize yourself with the policies before listing any products.
Furthermore, some items may require additional testing and/or certification in order to be sold on the corresponding platform. For example, Amazon requires third-party testing for cosmetics and personal care items, whereas Walmart does not require any additional testing for these items.
Therefore, brands must review the requirements of each platform before listing their products to ensure compliance.
CDU: Are there any upcoming changes to either platform that B2B cosmetics and personal care product companies should be aware of regarding ingredient formulations? If so, what are those changes?
DS: While specific upcoming changes regarding ingredient formulations are not announced publicly by either Amazon or Walmart, both platforms are consistently updating their policies to align with global regulatory changes and consumer safety norms. As a result, B2B cosmetics and personal beauty care product companies should actively monitor updates from both platforms.
Amazon's Seller/Vendor Central and Walmart’s Supplier Center regularly post policy changes, including those related to product ingredients. Furthermore, shifts in consumer demand towards more natural and organic products are driving many platforms to reassess their policies around ingredient disclosure and toxicity. Therefore, it's recommended that companies in this industry stay informed and prepared to adapt their formulations as needed.
CDU: Are there any upcoming regulatory changes (like MoCRA) that will impact B2B or B2C cosmetics and personal care product company’s relationships with these platforms?
DS: While exact details of upcoming regulatory changes specific to platforms like Amazon and Walmart are not usually declared publicly, there are broader trends in the regulatory landscape that could potentially impact B2B or B2C cosmetics and personal care product companies.
For instance, the potential passage of the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) in the U.S. could introduce stricter regulations on product ingredients and necessitate more transparent labeling practices.
These changes would affect all companies selling cosmetics and personal care products, regardless of the platform they use for sales. Therefore, companies should be proactive in monitoring these regulatory trends and be prepared to adapt their business practices accordingly to maintain compliance and good standing with these platforms.