Last Updated on July 25, 2023
Step into the world of beauty and business. If you’ve ever wanted to get your slice of the profit pie in the billion-dollar makeup and skincare industry, then a Sephora franchise might just be your ticket.
In this guide, you will get to know just beyond “if there is anything like a franchise in Sephora” and the secrets to starting your own Sephora franchise, including costs, potential profits, and fees to set you up for success- basically making money with the brand.
Let’s dive into the glamorous world of the Sephora franchise where beauty knows no limits.
Is Sephora A Franchise?
No, Sephora is not a franchise. It’s a chain of cosmetic stores owned by LVMH. People often think Sephora is a franchise because it has many stores worldwide, but each store operates independently. Sephora doesn’t let others use its store and trademark concepts, so it’s not a franchise.
However, they did partner with an Indian company to open franchises in India. They now have nearly 50 locations in India, mostly in New Delhi.
Sephora: A Brief History
Founded by Dominique Mandonnaud, Sephora is a French beauty store with a unique name meaning “the most beautiful wife of Moses.” It all began in 1970 in Limoges, where they sold personal care products.
Sephora’s groundbreaking “try before you buy” approach set them apart from others, and in 1995, they launched their own brand of bath and body products. Their flagship store in Champs-Élysées, Paris, became a huge hit among locals and tourists alike.
Over the years, Sephora expanded its offerings and now features almost 300 brands, along with its own private label. They cater mainly to women, offering a wide range of beauty products like makeup, skincare, fragrances, and more.
Under the umbrella of LVMH Moët Hennessy Louis Vuitton, Sephora’s presence expanded to 29 countries, with headquarters in Montreal and New York. They now offer an impressive 16,000 products from over 250 brands, with three free samples for every online purchase.
In the United States, Sephora operates about 400 stores, including mini-stores inside JCPenney. Their loyalty programs, like Beauty Insider, VIB, and Rogue, reward loyal customers with various benefits and exclusive access to events.
Sephora’s international journey began in the Middle East in 2007, and they later set up stores in Latin America, including their first in the Dominican Republic in 2010. In 2018, they also expanded to India, opening their first store in Hyderabad.
Can Sephora Be Franchised?
As of now, Sephora does not offer any franchise opportunities in the United States. But don’t worry, if you’re in India or any other country, you can still consider opening a Sephora Franchise.
To get started, you can send your application to the company, and they will review it and give you feedback after a few days. In India, Sephora looks for a good location in a busy area with lots of people passing by. They want to make sure your franchise gets plenty of customers.
Once you’re approved, a franchise consultant will be assigned to help you set up your new Sephora Franchise. They’ll provide assistance and guidance throughout the process, making it easier for you to get started.
So, while Sephora doesn’t offer franchises in the United States, in countries like India, it’s possible to get a Sephora franchise.
How much does a Sephora Franchise Cost?
Sephora doesn’t offer franchises in the U.S. right now, so there’s no cost for starting a Sephora franchise in the U.S. at the moment. However, the company might decide to start offering franchise opportunities in the future.
On the other hand, if you’re in India, then you can reach out to Sephora directly as the company doesn’t give out this info unless via direct contact.
How does Sephora operate?
The Sephora business model focuses mostly on retail sales and direct-to-customer sales of brand products. They have a business model that combines both physical stores and online sales.
How is Sephora Profitable?
Most of Sephora’s profits come from retailing. In 2020, they made a whopping 5.01 billion U.S. dollars from retail sales in the United States alone. Here’s how it works:
Sephora buys products from brands at a wholesale price, which is usually 50-65% less than the retail price. Then, they sell these products to customers at the same price the brand sells them, making a profit in the process.
To keep things fresh and attract more customers, Sephora frequently partners with smaller brands, celebrities, and influencers.
Now, aside from selling products from other companies and brands, Sephora carries its own home brand; Sephora Collection. Popular products like eyeliner, lipstick, and face masks contribute to a steady income.
Their customer base includes young women between 18-34 years old, seeking quality luxury products, and businesses looking to partner with a registered and established company to expand their reach.
Sephora’s value proposition revolves around providing customers with high-quality and reasonably priced beauty products, while also offering established brands a platform to grow.
They reach customers through physical stores, a website, and a mobile app, maintaining relationships through customer service, social media, and mobile interactions.
The key resources of Sephora include the brands they carry, store employees, and technology developers. Their main activities involve in-store and online sales, supporting the business model. Sephora also collaborates with cosmetic brands, makeup influencers, and dispatchers as essential partners.
How much does a Sephora franchise make?
The income of a Sephora store can vary depending on several factors. These factors include the store’s location and the dedication of its staff members. It’s important to note that Sephora does not have franchise owners, so we cannot determine exactly how much a Sephora franchise makes.
However, in countries like India, where Sephora operates successful franchises, the average store earns around $2 million in revenue each year. Keep in mind that this figure is specific to the Indian market and may not apply to all locations.
The fact that Sephora doesn’t offer franchises in the U.S. doesn’t mean that you can’t make money with the brand. There are two other ways you can make money distributing with Sephora:
- Selling with the Sephora Brand
- Investing in Sephora Stocks
By now, you already know what Sephora’s business model is, and how they operate. What this means is that there is an avenue for startups to get their products into the Sephora store; In other words- sell their products under the Sephora brand in Sephora stores.
But then again there are some steps you need to take to get this done.
How to sell with the Sephora brand
Want to sell your products in Sephora stores? Not to worry, here’s a brief four-stage plan to getting started with Sephora.
1. Find the Right Fit and Differentiate Your Brand
Research Sephora’s customer base and competitors to understand preferences. Showcase your brand’s unique selling points clearly to stand out.
Create an impressive sample package with full-size products and a compelling brand story. Don’t underestimate the power of a well-thought-out sample package. After sending your package, be strategic with follow-ups, politely checking if they received it and expressing your excitement to connect further.
Once Sephora expresses interest, prepare for the next step – an in-person meeting at their San Francisco offices. This face-to-face interaction significantly increases your chances of leaving a lasting, positive impression.
2. Make a Wonderful Presentation and Build a Personal Connection
Craft a powerful presentation covering essential aspects of your brand, products, and target consumers. Practice your delivery, be personable, and show genuine passion.
Practice your presentation thoroughly, allowing your passion for your product to shine through. Be personable, engaging, and show genuine enthusiasm during the meeting.
After the presentation, don’t forget to express your gratitude by sending personalized thank-you notes to each interviewer. Follow up diligently, addressing any unanswered questions or concerns via email, and maintain communication with the Sephora team as you move forward.
3. Navigating Contract Negotiations with Sephora
Negotiating a contract with Sephora can be challenging, but don’t be intimidated. Remember that persistence is key. Sephora often includes a non-negotiable clause in their contracts, but that doesn’t mean you can’t push for changes that are in your brand’s best interest.
Work closely with your lawyer or adviser to navigate this process successfully. Focus on understanding what aspects of the contract are open for negotiation, such as pricing, launch strategy, in-store positioning, advertising, shipping, EDI requirements, and sales parameters.
Be prepared to discuss these aspects with your Sephora buyer, and know your brand’s worth. Stay firm on the points that matter most to your brand while remaining flexible on less crucial matters.
4. Manufacturing, Shipping, Marketing, and Tracking
Before moving into mass production, thoroughly review mock-up samples to ensure the final product meets your standards. Set early deadlines with your manufacturer, allowing for potential delays and ensuring that everything is ready on time. Personally check the final products to avoid any unforeseen issues before shipping them to Sephora’s distribution centers.
When it comes to shipping, follow Sephora’s guidelines carefully to avoid any penalties. Provide testers and samples as requested, and make sure to communicate with your Sephora team regarding the distribution process.
Additionally, set up your brand page on Sephora.com, providing all the necessary assets and information. Educate Sephora’s sales staff (called cast members) about your product through in-store demos and training sessions. Don’t forget to track your numbers regularly and communicate with the Sephora team about sales performance and strategies for improvement.
Lastly, plan and execute a comprehensive marketing campaign for your Sephora launch. Utilize social media, influencers, and custom landing pages to create excitement around your brand.
Investing in Sephora Stocks
If startups are not your thing, or you’re not interested in selling anything with Sephora, and you’ve got the skills as a stock broker, then investing in Sephora’s stocks might just be your thing. So how do you do this…
Investing in Sephora directly is not possible, but you can invest in the company that owns Sephora. Sephora is part of a larger company called Moët Hennessy Louis Vuitton, also known as LVMH.
Since Sephora is not publicly traded on any stock exchange, you won’t find it listed separately. Instead, you can buy LVMH stock, which is traded on the Euronext Paris exchange under the ticker symbol LVMH. If you’re a US investor, you can purchase LVMH shares through the over-the-counter market, using trading apps like Stash and Robinhood.
Just search for the ticker name “LVMH” to find and invest in the company that includes Sephora within its luxury goods conglomerate.
Frequently Asked Questions
Can Sephora make you a millionaire?
Yes, selling with the Sephora brand or investing in its stocks can make you a millionaire if you know what you are doing.
Who owns Sephora?
Sephora is owned by LVMH Moët Hennessy Louis Vuitton, which we usually call LVMH. This French company was started by Henri Racamier and Alain Chevalier and it’s like a parent to many luxury brands like Louis Vuitton and Dior.
Right now, Sephora’s CEO is Guillaume Motte, and he’s been leading the company since Jan 1 2023.
This sums it up for the topic “Sephora franchise: how to start, cost, profit, and fees”. While you can’t actually get a Sephora Franchise in the U.S (if you’re in India then you might get lucky), there are still other ways you can make money with Sephora such as getting your products into the Sephora Brand and investing in their stocks.
Just make sure you do your homework properly before you jump in and you’ll be fine.