Building a premium beauty brand to global scale ensures that it remains an incredibly competitive space.

Numerous new companies enter the haircare, skincare, cosmetics, and fragrance sectors, all vying for the rapid growth that attracts major industry players. However, very few make it.

Those that do have to be acutely focused on, and excel at, their product development, brand positioning and go-to-market strategies.  

These areas alone can be significant barriers to entry in themselves.  

Adding infrastructure complexities, such as B2B and DTC fulfillment, may push an already stretched management team and divert crucial funds from core business needs.

Therefore, for the purpose of this discussion, we'll assume the decision has been made to use a third-party logistics (3PL) partner for fulfillment. This is often the best initial step, as it allows a brand to scale; bringing logistics in-house can be an option later.

So, what should a beauty brand consider when choosing a fulfillment partner? We have identified several key factors, from cost to data access, which we will explore below. 

Cost of Service: Assessing the Price of Beauty Fulfillment Solutions

Most  beauty brand owners don’t have expertise to know if a fulfillment quote is fair. To protect yourself, you should always get proposals from at least three different vendors.

When you review these proposals (often called RFPs),  it’s essential to consider several additional factors.

1. Courier Access and Service Level

Access to courier services and service level is one of the primary considerations when looking at the cost of potential 3PL providers.  

The 3PL partner may dictate which courier service is available and at what cost. Margin will be added on any cost pass through.

Plus, because delivery on the doorstep will be the only physical touchpoint between brand and consumer, this is a factor that should receive substantially more thought and interrogation than it often does.  

2. Automation Capabilities and Efficiencies  

In the absence of automation, a vast majority of any 3PLs cost base will be staff costs.  

In the UK, the National Minimum Wage, which serves as a good proxy for cost base, has increased by 28% between April 2021 to April 2024.

This is a cost that must be passed on to the client, so contractual protection must be sought to protect against future increases.  

A well-invested, automated provider may offer greater protection against rising inflationary costs.  

3. Hours of Work and Shift Patterns

The hours and days of work and shift patterns can significantly impact the levels of service provided by a 3PL provider.  

There is a fundamental conflict in any 3PL between service levels extended to clients,the cost base, and client profitability that comes with it (but more on this later).  

4. Quality of Packaging

Ever received a damaged parcel and have it tinge your perception of the brand you bought from?  

The quality of packaging must be considered within any pricing regime with reference to a robust system that will prevent a damaged delivery.

This is where the added value of a sophisticated 3PL provider must be considered beyond the price tag.  

Particularly for a beauty brand where the products inside could be damaged, the right cosmetics fulfillment partner can make all the difference to your brand loyalty level. 

Scale Potential: Is The 3PL Able to Adapt to Your Growth Ambitions?

Changing ecommerce fulfillment services will always incur costs and is potentially disruptive to continuity of supply, so you want to minimize the number of times you need to change solution.  

Key to this is considering the growth potential within the relationship of choice. 

Points to consider when assessing the scalability potential of a 3PL,are: the overall size of footprint, including existing surplus capacity as well as track record of growth and expansion. 

International Reach: Can The 3PL Help Build Your Beauty Brand Abroad?

The ambition of any brand will be to globalize, having established a successful model in the home market.  

Managing commercial relationships, technology and service levels across multiple 3PL partners globally should be unnecessary if adequately factored into that all important first move.

Consideration here should be given to existing footprint by country as well as length of time already spent in territory which will ultimately guide to local market knowledge.

Key also will be to examine courier relationships already in place and the cost and service levels attached to these, the latter of which is best determined by the time from order to delivery. 

Category Experience: Selecting Specialists in Beauty and Cosmetics Fulfillment

Most 3PLs will operate across multiple categories and the same skill sets will apply to most consumer categories.

That said, there are nuances that will impact on delivery success, particularly when it comes to the beauty industry.

For example, in beauty and cosmetics there is a propensity for products to be damaged in transit, with pump lids and fragile bottling being some of the usual suspects.

These risks often require bespoke packaging solutions within a standard box, so it’s wise to partner with a 3PL who can offer this level of cosmetics fulfillment specialism.

Additionally, HAZMAT delivery restrictions require consideration in beauty specifically.  

It is essential to ensure that the provider has the capability to deal with these products alongside non-HAZMAT items. 

Access Data and Reporting to Monitor Fulfillment Performance 

To adequately measure and monitor performance from any 3PL, it is important to define a reporting suite that delivers the right information at the right frequency.

As a minimum, daily reporting should be available - showing % of orders processed and dispatched within the agreed timeframe, split down by delivery type. Additionally, time from dispatch to delivery at the doorstep should be available.

Reporting on inventory health and compliance is also important and is often manifested by order shorts where the inventory SKU could not be found in location.  Additionally, it’s beneficial to have reports on any inbound delays and inventory items that are not available for resale. 

Service Levels and Impact on The Customer

Unlocking Customer Lifetime Value Through Fulfillment

Using THG Commerce’s fulfillment solution, we recently conducted a study across our Beauty and Nutrition clients to quantify the impact of repeat purchases on customer lifetime value (CLV).

The goal: To determine the true value of a customer who returns after their first purchase—especially given the high acquisition costs often associated with that initial sale.

The findings were compelling:

After the first purchase, predicted CLV stood at £51.

Following a second purchase, CLV more than doubled to £104.

After a third purchase, it rose to £159.

By the fourth purchase, CLV increased exponentially to £477.

In short, customer acquisition costs become far more sustainable when a customer returns.

This highlights a critical challenge for both marketers and brand managers: 

It's not just about how fulfillment supports repeat purchases and retention—it’s also about how it can influence acquisition costs, which are key to building a profitable and scalable business model.

Here are the key considerations moving forward

1. Quality of Service

Quality of service will manifest in whether the delivery is made within the timeframe indicated and in the expected pristine condition.  

The customer will hold the brand responsible for any failure here no matter how remote the brand is from the process.  

2. Speed of Service

You may ask: does speed of service even matter?

The largest, and arguably most successful, ecommerce business on the planet has built its entire proposition around speed and reliability of service.

If this isn’t sufficient alone, it can be proven that CLV increases proportionately with speed of service. But can speed of service be used as an acquisition tool?  

3. Service as an Acquisition Tool

It may come as a surprise to many that, according to the same  study, current ecommerce shopping behaviors indicate that 70% of all daily transactions take place after 2pm.  

It's akin to a leisure activity. Indeed, approximately 25% take place between 10pm and midnight.  

A 3PL recently won an award for innovation, acknowledging the nature of its partnership with a beauty brand for its ecommerce fulfillment.

Upon closer inspection of the brand’s service levels, it is stated that the daily cut-off time for a next-day delivery is 2pm and that this service is not available on a Sunday.  

This means that a next-day service is only available to 30% of all daily transactions and none on a Sunday.

Any first-time buyer (or even returning customer) looking for that product who wants it quickly will likely shop with a competing brand if they offer a better service.  

In this example, there is an obvious conflict between cost and service.

Shift patterns have been narrowed to the bare minimum with cost the only consideration. It is possible, with appropriate processes and consideration, to satisfy both requirements.  

Fulfillment cannot be viewed as an afterthought, or as a commodity given to procurement teams to select on cost alone.  

Marketing teams and brand managers must take an active role in understanding how fulfillment supports their goals. They should be directly involved in selecting and evaluating any 3PL fulfillment partner, keeping the above considerations at the forefront. 

THG Commerce: Specialists in Beauty Fulfillment at Scale 

THG Ingenuity has been trusted by beauty brands to deliver world class end-to-end ecommerce fulfillment and courier management services for over 20 years. 

We’re obsessive about delivering your customer promise, putting them at the center of decision making and using operational data to drive a brand’s commercial performance. All through the lens of a fellow brand owner. 

Beauty customers have praised the service we give to them, with over 19,000 five-star Trustpilot reviews last year alone, giving Cult Beauty and LOOKFANTASTIC overall positive ratings of 90% and over. 

We carry this passion through to all our partnerships, enabling clients to be asset light whilst leveraging THG Commerce’s best-in-class automated facilities and software, which have been developed with a DTC customer-first view. 

Our clients also benefit from leading UK delivery service levels and a sophisticated courier management system, all built to provide the non-negotiable quality levels today’s consumers expect. 

Optimizing fulfillment and overcoming complexities is a dynamic challenge.  

Reach out our experts for a comprehensive introduction to our services.