Should Beauty & Personal Care Brands Replace Distributors with Direct Retail Relationships?
For many beauty and personal care brands, international expansion follows a familiar path.
A distributor is appointed to import the products, navigate local regulations, sell to retailers, manage logistics, invest in marketing and build the business over time.
But as brands grow, a question inevitably arises:
"Should we continue working through distributors, or is it time to sell directly to retailers?"
It's a question I've encountered throughout my career, from consumer retail brands at Wella, to helping build distributor networks at Glanbia Performance Nutrition, rationalising international markets at Church & Dwight, and now advising brands through Xenos Business Development.
There isn't a universal answer.
Going direct can improve margins and strengthen control, but it also transfers significant operational, regulatory and financial responsibilities back to the brand.
The decision shouldn't be driven purely by margin.
It should be driven by capability.
Why Brands Consider Going Direct
There are usually five reasons brands decide to bypass distributors.
Higher gross margins
Greater control over pricing and promotions
Direct relationships with retailers
Better visibility of customer data
Greater control over brand execution
On paper, it looks attractive.
Remove the distributor margin and profitability improves.
Unfortunately, reality is rarely that simple.
The distributor isn't simply earning margin.
They're performing a long list of functions that someone still has to carry out.
The Distributor Isn't Just a Sales Organisation
A good distributor typically provides:
Importation
Customs clearance
Warehousing
Local logistics
Credit management
Sales teams
Merchandising
Retail relationships
Regulatory compliance
Marketing execution
Forecasting
Customer service
Local market intelligence
If you remove the distributor, every one of these responsibilities still exists.
The only question is:
Who is going to perform them?
The First Challenge: Importing into the European Union
For brands manufacturing outside the EU, importing products into Europe is often the first major hurdle.
Unlike domestic distribution, products cannot simply be shipped to retailers without considering who is legally responsible for bringing them into the European market.
That includes:
Customs clearance
Import VAT
Duties
Product compliance
Documentation
Some major retailers have their own importation capability.
Others don't.
Importer of Record
Somebody must act as the Importer of Record.
The Importer of Record assumes legal responsibility for ensuring products comply with EU legislation before entering the market.
This includes ensuring appropriate documentation exists, duties are paid and products meet applicable regulations.
If the retailer won't assume this responsibility, the brand must either:
Establish its own EU importing capability
Appoint a specialist logistics provider
Use a third-party importer
Continue working through a distributor
Many brands underestimate how significant this responsibility can become.
The Responsible Person
For cosmetics sold in the UK and EU, every product requires a designated Responsible Person.
The Responsible Person is legally accountable for ensuring cosmetic products comply with relevant cosmetic regulations before they are placed on the market.
Responsibilities include:
Product Information Files (PIF)
Safety assessments
Regulatory documentation
Product notification
Cosmetic compliance
Market surveillance
Product traceability
If your distributor previously fulfilled this role, you'll need an alternative solution before moving to direct retail.
Labelling Requirements
Labelling is another area that becomes significantly more complex when brands go direct.
Labels may need to include:
Responsible Person details
Country-specific language requirements
Ingredient declarations
Batch coding
Product function
Warnings
Nominal contents
Period After Opening (PAO) or expiry information
Language requirements alone can vary considerably across Europe.
A label suitable for one country may not be compliant in another.
Brands serving multiple European markets often require either:
Multi-language packaging
Country-specific artwork
Stickering solutions
Local packaging adaptation
These decisions affect both cost and supply chain complexity.
Understanding Incoterms
Incoterms become increasingly important when dealing directly with retailers.
Who pays freight?
Who clears customs?
Who assumes risk?
Who pays duties?
These responsibilities vary depending upon the agreed Incoterm.
Common examples include:
EXW (Ex Works) The buyer assumes almost all responsibility from the manufacturer's premises.
FCA (Free Carrier) The seller delivers goods to a nominated carrier.
DAP (Delivered at Place) The seller arranges transport to the agreed destination, but import formalities generally remain with the buyer.
DDP (Delivered Duty Paid) The seller assumes responsibility for transport, customs clearance, duties and taxes until delivery.
Many retailers increasingly expect suppliers to operate on DDP terms.
For brands exporting from outside Europe, this requires significant operational capability.
Retailers Expect More Than Products
One of the biggest surprises for brands moving away from distributors is the level of commercial support expected by retailers.
Distributors frequently provide:
Merchandising
Promotional execution
Field sales
Retail training
Sampling
Planogram management
New product launches
Local marketing
Without a distributor, those activities become the brand's responsibility.
Large retailers increasingly expect suppliers to support:
Promotional calendars
Digital content
Shopper marketing
Social media campaigns
Beauty advisor training
Category reviews
Retail media investment
Direct retail relationships require significantly greater investment than many brands anticipate.
Should You Grant Retail Exclusivity?
Some retailers request exclusivity.
Sometimes it's justified.
Often it isn't.
Exclusivity may make sense where:
The retailer commits significant marketing investment.
The brand is entering a new market.
Premium positioning depends upon selective distribution.
However, exclusivity also reduces flexibility.
It may limit future expansion into other channels and increase dependence on a single customer.
In most cases, carefully defined channel or time-limited exclusivity offers a better balance than open-ended agreements.
Different Brands Need Different Retail Strategies
Not every retailer suits every brand.
Premium Beauty
Prestige beauty brands typically focus on:
Department stores
Selective beauty retailers
Premium perfumeries
Luxury online retailers
Scarcity often supports premium pricing.
Broad distribution may dilute brand equity.
Mass Beauty
Mass-market brands usually succeed through:
Drugstore chains
Grocery retailers
Health & beauty chains
Large omnichannel retailers
Here, distribution breadth often drives growth.
Availability matters.
Budget Brands
Value-led brands generally perform best through:
Discounters
Variety retailers
Cash & carry
Value supermarkets
These channels demand exceptional operational efficiency and highly competitive pricing.
The route to market should reinforce your brand positioning—not undermine it.
Distributor or Direct Retail?
Ultimately, this is a value chain decision.
Working Through Distributors
Advantages
Lower investment
Local expertise
Existing retailer relationships
Regulatory capability
Importation expertise
Local warehousing
Reduced operational complexity
Lower financial risk
Disadvantages
Distributor margin
Less pricing control
Less visibility of customers
Potentially slower decision-making
Dependence on distributor capability
Selling Direct to Retail
Advantages
Improved gross margins
Direct retailer relationships
Greater pricing control
Better customer insight
Stronger brand control
Faster decision-making
Disadvantages
Higher operating costs
Greater regulatory responsibility
Increased inventory risk
Credit exposure
Need for local infrastructure
Higher marketing investment
More complex logistics
Greater management resource
Don't Focus Only on Margin—Focus on the Whole Value Chain
Brands often look at distributor margin and assume it represents lost profit.
It doesn't.
Distributor margin funds a wide range of commercial activities.
When moving to direct retail, many of those costs simply move from the distributor's profit and loss account to your own.
A proper value chain analysis should include:
Manufacturing costs
Freight
Insurance
Customs duties
Import VAT
Warehousing
Sales costs
Marketing investment
Merchandising
Retail rebates
Promotional funding
Customer service
Credit risk
Returns
Obsolescence
Regulatory compliance
Only then can brands make an informed commercial decision.
So, When Is the Right Time?
In my experience, brands should consider direct retail only when they have:
Sufficient sales volume to justify the investment.
The financial resources to support retailers properly.
Robust regulatory and compliance capabilities.
A clear logistics strategy.
Strong demand from retailers.
The internal expertise to manage complex customer relationships.
If those capabilities don't yet exist, a strong distributor remains one of the fastest and most effective routes to sustainable international growth.
Final Thoughts
Choosing between distributors and direct retail isn't a binary decision. Many successful beauty and personal care brands use a hybrid model—working directly with key strategic retailers in major markets while partnering with distributors in smaller or more complex territories.
The objective shouldn't be to eliminate distributors. It should be to design the route-to-market model that best supports your brand's ambitions, resources and positioning.
The strongest international brands recognise that every stage of the value chain has a cost. The real competitive advantage comes from understanding which activities create value for the consumer, which can be outsourced effectively, and which should remain under the brand's direct control.
In international expansion, the smartest route to market is rarely the cheapest—it is the one that delivers sustainable, profitable growth.
