The global popularity of Korean cosmetics continues. Let’s learn about the distribution structure of the Korean cosmetics wholesale market to help those who want to sell Korean cosmetics online or in offline stores.
Distribution channels of Korean cosmetics
The distribution channel at the wholesale stage consists of brand companies -> wholesalers, vendors, and exclusive agents. In the case of Korean cosmetics, brand companies are actively selling them to customers directly.
Brand Agency
Some large cosmetics brands have agencies. This is the case for many large brands such as Amore Pacific or LG Household & Health Care. This type mainly exists in mid-priced brands rather than low-priced brands. Distributors supply products to salespeople called door-to-door salespeople, and the salespeople sell products through their acquaintances or through their own methods. In the case of these exclusive distributors, they act as retail stores that sell to consumers, but in some cases, they also supply products to wholesalers.
Wholesale Supplier
Products are supplied directly from brand companies or from brand agencies or vendors. However, the price is not very expensive. In the case of cosmetics distribution, the profits earned by wholesalers are usually very small, so if you want to purchase various brands at once or do not have a large quantity at once, most products are purchased through wholesalers. There are a huge number of wholesalers in Korea, and most of them require a 100% advance payment or a 50% down payment because the structure is to place an order and then receive the product. This is understandable from the seller’s point of view, as orderers often do not receive the actual product after ordering. However, from the buyer’s perspective, it is burdensome to pay a large amount of money in advance before trust is established. This part must be coordinated through mutual consultation. However, as there are so many wholesalers, there are cases where the product may not be paid on time or the advance payment may not be returned, so you must always be careful.
Vendor company
There are vendor companies called distributors in some overseas regions or platforms. This is not just limited to overseas, but depending on the brand, there may be one or several vendors in Korea as well.
Offline wholesale market
A representative offline wholesale market is Hwagok-dong Wholesale Market. In fact, there are not a huge number of wholesale stores, but only a few large stores. However, there are not many types of products and the prices are not cheap. However, there is an advantage to purchasing in small quantities. There are a few stores in Namdaemun and Dongdaemun that carry them, but they mainly sell low-priced products rather than famous and popular products.
I want to buy cosmetics wholesale, but how do I find a supplier?
It would be nice if there were a forum where wholesale cosmetics sellers could exchange information, but in fact, there is no forum in Korea that performs that function. In Korea, there is a forum called Naver Cafe operated by a portal site called Naver. There are active Naver cafes for most topics, but there is no active Naver cafe for cosmetics wholesale distribution. In some Naver cafes, you can get information about some wholesale retailers, but they are not very active. Also, if you are not familiar with Korean, it will not be easy to find a distributor in a place like this.
Find a distributor that fits your business model
If you want to distribute products from one or two brands in large quantities, it is worth contacting the brand company. Something to consider here is that some brand companies impose conditions that require you to purchase not only the representative product but also products from various SKUs. In the case of brand headquarters, this can be difficult to meet because there are many different standards required.
If it was like that big, u actually wouldn’t be reading this.
This applies to most people reading this. Someone who want to import only representative products from various brands in small quantities and sell them online through a platform or in your offline shop. Or you can sell through social media. If you want to purchase products from various brands in small quantities, it is best to contact a wholesale distributor who ships the products locally or in Korea. Some distributors even provide direct delivery to end consumers. In this case, you can sell it without any inventory burden.
I hope this article helps you.
If you have more questions or need help with this topic, please contact me.