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Online shopping for beauty products is a growing market in New Zealand. You may decide to launch your own beauty store to offer your products to your target customer base. Naturally, there will be the usual concerns of starting an online business. However, you need to understand regulations specific to cosmetics before you can legally sell them in New Zealand. There will be a lot to keep track of, especially in the early stages of your business. Therefore, it is crucial to develop a good business plan for your online beauty store. This article will detail six questions to ask yourself before launching an online beauty store.

1. What Are You Going to Sell?

First, you need to determine what kinds of products you will sell and how. Figure out how you will source your products, whether that be through:

  • making your own products; 
  • paying a manufacturer to create your designed products; or 
  • dropshipping.

For example, cosmetics can be a good product for a dropshipping business. You buy and advertise a wholesaler’s makeup products on your website, and customers purchase them from your store. The wholesaler is in charge of producing and delivering their products while you pocket the price difference. 

It may be helpful to find a niche in the market and align your beauty products accordingly. That way, you can stand out amongst other brands and develop a strong customer following. For example, you may only sell beauty products free from animal testing.

2. Where Are You Going to Sell?

Just like you would browse for an appropriate physical space to open up your store, you need to determine the best place to sell your beauty goods online. You have the options of:

  • using an eCommerce platform;
  • building your own website; or
  • selling on an online marketplace.

When you are just starting out, it may be useful to sell both on an online marketplace and from your own store website (whether that be through an eCommerce platform or a website you have built). You can bring already existing customers from an online marketplace to your own website for a greater product range.

3. How Can Customers Pay?

If you are operating from your own store domain, you need to ensure that you can securely process online customer payments. If you accept credit cards, you need to make sure that any payment system you use is PCI compliant. You also need to encrypt any connections where customers send you their personal information.

4. When Will You Allow Returns?

If you sell consumer goods, such as makeup or skincare products, you make certain implicit consumer guarantees about the quality of these products. According to New Zealand law, when a customer complains to you about a faulty or undelivered product, you need to provide them with a remedy. This may be a:

  • return;
  • replacement; or 
  • refund.

However, you may decide to provide such a remedy in other situations as well. If you solely operate online, one of the drawbacks is that customers cannot test your products. This may be challenging for certain beauty products, such as needing to match foundation to skin tone.

Therefore, it may be worth considering allowing customer returns/exchanges in other situations outside of when the law requires. This can increase customer satisfaction and encourages purchases.

5. What Regulations Apply to Your Products?

Selling online comes with its own set of laws that you need to follow, such as:

  • meeting consumer guarantees;
  • not misleading your customers;
  • accurately portraying your products; and
  • other laws specific to your goods.

There are also regulations specific to selling beauty products and cosmetics. If they contain any hazardous substances, you need to ensure that they meet Cosmetics Products Group Standard. This standard regulates substances that may cause harm, such as skin irritancy. The overall requirement for this standard is that your cosmetic products do not cause harm to your customers. Look into your obligations under this standard, and ensure that your products meet them.

6. Do Your Products Meet Labelling Standards?

You should clearly label the products you sell and include any necessary care instructions. You need to provide warnings against allowing the product to get into customers’ eyes or mouth and a recommendation to test for allergies first. Your packaging also needs to be suitable and prevent leakages.

Your labels should be:

  • in English;
  • durable; and
  • easy to read.

You also need to include:

  • the product name;
  • hazard information;
  • a list of ingredients;
  • a batch code;
  • disposal recommendations;
  • contact details for the manufacturer; and
  • details of any nanomaterials.

If you do not deal with the products yourself, you should gain assurances from your manufacturers that they meet their legal standards. Most international brands will meet these requirements. However, if something goes wrong, you will be liable, so it is essential to take due care.

Key Takeaways

Launching an online beauty store can be an excellent way to get your beauty products into the market. Cosmetics are also a good choice for dropshipping due to their size and relative portability. However, you need to carefully plan your online beauty business and ensure that you meet any relevant regulations. If you would like more information or help with your online beauty store, contact LegalVision’s eCommerce lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is an online beauty store?

An online beauty store is an online shop where your customers can buy beauty products, such as makeup or natural skincare products. You may make the products yourself, hire a manufacturing company to make them for you, or operate the store through dropshipping.

What is PCI compliance?

The Payment Card Industry Data Security Standard (PCI DSS) is a regulation that all businesses that deal with credit card details need to meet. It is a standard that promotes data protection and aims to prevent credit card fraud online.

What laws apply to selling beauty products online?

Various laws will apply to selling beauty products online. Consumer guarantees apply, as do laws against misleading your customers or making false claims about your products. There are also laws that apply specifically to cosmetics labelling standards and those that require a certain level of safety when selling products containing hazardous substances.

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