How to Sell on Nykaa?

Nykaa presents a compelling opportunity for brands aiming for growth and visibility in the beauty and fashion sectors.

1. Premium Position in the Market

Nykaa commands a premium market position, setting it apart from platforms like Purplle or MyGlamm. Unlike those platforms, which often prioritize their in-house Direct-to-Consumer (D2C) brands, Nykaa offers external brands a genuine chance to build and expand their brand recognition.

2. Sell High ASP Products

It's an ideal platform to sell high-ASP (Average Selling Price) products. Nykaa's primary audience consists of upper-middle-class Indian women aged 18-50 who are actively seeking and willing to invest in quality skincare, wellness, and trending beauty and fashion items. This makes it a perfect fit for brands with authentic, high-quality offerings in these categories.

3. Brand Recognition

Selling on Nykaa significantly boosts your brand recognition. The platform's established trust and credibility extend to the brands it hosts, making customers more inclined to discover and try your products. This association helps foster strong consumer confidence and loyalty.

Before initiating the seller registration, ensure your business meets Nykaa's eligibility requirements:

1. Registered Business Entity: Your business needs to be a formally registered entity, such as:

• • Sole Proprietorship
  • Partnership
  • Limited Liability Partnership (LLP)
  • Private Limited Company

2. GSTIN and Business License: You are required to obtain a GSTIN (Goods and Services Tax Identification Number) and a valid business license.
3. Product Categories: Your products must fall within the beauty, skincare, personal care, wellness, or fashion categories.
4. Compliance: All products must adhere to BIS (Bureau of Indian Standards) regulations, and edible beauty products (like supplements) must also comply with FSSAI standards.

To register as a seller on Nykaa, you'll need to complete a separate application for each brand you plan to sell. This meticulous process underscores Nykaa's commitment to brand authenticity.

1. Fill out the application form

Start by completing the initial application form at nykaa.com/sellonnykaa/lp . This is the first of four forms you'll need to submit to get your account live. On this form, you'll provide basic information like your Registered Company Name, GST Number, Brand Name, any Instagram Account and Website URL you have, and your estimated marketing budget for launch.

2. Select Product Category

Next, you'll select your product categories, choosing from options like body & bath, skincare, or haircare. While you can offer items across multiple categories, be ready for significant documentation. If you're selling your own brand, a trademark certificate is necessary; for products from other brands, you'll need a brand authorization letter.

3. Application Approval

After submitting your details and necessary certificates, keep an eye on your email for the approval confirmation. This process typically takes 5-7 business days, assuming all provided information is accurate.

4. Cataloging Process

This is the stage where your products become visible and ready for purchase on Nykaa. You'll need to provide a detailed description for each product, a compelling product title, and a high-quality product image.

To successfully complete your Nykaa seller registration and ensure compliance, you'll need to prepare the following essential documents:

• GST Number: For tax compliance.
• PAN Card: For identity verification and tax purposes.
• Address Proof: To verify your registered business address.
• Letter of Authorization: If selling products from other brands.
• Trademark Certificate: If selling your own brand's products.
• Digital Signature with Company Stamp: For digitally signing agreements.
• Cancelled Cheque: To verify banking details for payments.
• A Current Account in a Bank: A dedicated business bank account.

Nykaa's fee structure for sellers primarily revolves around a commission model, typically varying from 15% to 30% based on the specific product category.

1. Shipping Charges:

Here's the shipping charges:

2. Marketing Fees

Nykaa also provides various marketing aids designed to boost product visibility and sales. The cost of these marketing services varies depending on the product category and the specific promotional activities undertaken.

Nykaa offers two primary selling models, each with distinct operational and financial implications for brands:

1. Marketplace Model (Dropship Model)

Under the Marketplace Model, brands maintain full responsibility for order fulfillment. When Nykaa receives a customer order, it issues a Purchase Order (PO) to the brand, detailing the product quantity, price, and customer contact information. Upon receiving this PO, brands initiate their internal procurement process.

The steps involved in this model are:

• PO Generation to Vendors: Brands generate Purchase Orders to their own vendors, ensuring accurate details regarding price and quantity for seamless product acquisition.
• Quality Check of Received Goods: A crucial step where brands perform an internal quality check to ensure that only high-quality stock enters their warehouse.
• Label Generation: Brands generate labels containing essential information like Stock Keeping Unit (SKU) numbers and pricing, vital for efficient order processing.
• Invoice Generation: Brands create invoices, ensuring accurate transaction records, legal compliance, and smooth handling of payments and returns.
• Shipping Label Generation: Brands produce shipping labels with recipient details, shipping methods, tracking numbers, and barcodes, preparing the order for dispatch.
• Dispatching: Once prepared, the order is dispatched from the brand's warehouse and handed over to Nykaa's designated logistics partners for delivery to the end customer.

In this model, sellers adhere to a payment cycle, typically receiving payments around 25 days post-dispatch. Brands must strictly comply with Nykaa's Terms and Conditions, including a tight Turnaround Time (TAT) of 24-48 hours for order processing.

2. JIT (Just-In-Time) Model

The JIT (Just-In-Time) Model involves Nykaa directly buying products from brands and then selling them at its chosen price. This benefits brands by reducing exposure to price fluctuations, ensuring immediate inventory value recovery, and lowering storage costs.

The JIT Model offers a more direct selling approach where Nykaa directly purchases products from brands known for their high-quality offerings. Nykaa then sells these products on its platform at its desired price.

For example, if Nykaa purchases a product for Rs. 50, it might sell it for Rs. 70. This model provides significant benefits to brands, as it reduces their reliance on price fluctuations for sales. Brands can instantly recover the value of their inventory, a process that might take longer under the marketplace model. This also helps brands minimize inventory storage costs and free up warehouse space for new stock.

Key aspects of the JIT Model include:

• Inventory Reservation: Unlike the marketplace model where order processing begins after a PO, brands in the JIT model must reserve inventory for Nykaa immediately upon receiving an order, without waiting for a formal PO (standard purchase agreement). This requires careful management of inventory commitments across multiple sales channels.
• Dispatching Through the Nykaa Warehouse: After receiving Nykaa's PO, brands send the products directly to a Nykaa warehouse. Here, Nykaa takes over fulfillment responsibilities, conducting internal quality checks, packing, labeling, and dispatching the products to the end customer.

Getting onboarded with Nykaa is a significant step, but the operational journey comes with its own set of challenges that sellers often encounter:

1. Difficulty in Label Generation

You can't generate shipping labels until Nykaa confirms the order's authenticity. This verification, while ensuring genuine transactions, can delay the shipping process and pose a challenge for sellers aiming for swift dispatch.

2. Quality Check Delays

Sellers often struggle with efficient quality checks when new inventory arrives at their warehouse. Manual inspections are time-consuming and carry the risk of inadvertently stocking low-quality products, which can negatively impact customer satisfaction and lead to returns.

3. Wrong Order Processing

With a large number of SKUs, such as various shades of lipstick, picking errors can easily occur. Even a minor mistake, like selecting the wrong shade, can result in customer dissatisfaction and product returns. This issue is often exacerbated by disorganized warehouses and inaccurate inventory updates.

4. Difficulty in Return Tracking

The fashion and cosmetic industries typically experience high return rates, making efficient return management crucial. However, tracking returns can be a significant hassle. Verifying returned products and re-integrating them into inventory can cause confusion and tie up stock, leading to increased costs as products remain unsellable.

5. Lack of Centralized Inventory Visibility

Managing inventory across multiple sales channels, including Nykaa, without a centralized view, can be daunting. You might find yourself manually dividing and tracking inventory with every sale, increasing the risk of missing Nykaa's strict 24-48 hour fulfillment timeframe. This can lead to delays and potential penalties.

Achieving growth on Nykaa requires strategic effort beyond onboarding.

1. Leverage Reviews

Nykaa's consumers are highly review-driven. Positive reviews build trust and credibility, while negative feedback offers direct improvement insights, fostering customer relationships. Social media presence further supports this.

2. Bid For Homepage Visibility

Given fierce competition, bidding for prime homepage placement is crucial. Frequent homepage appearances boost brand recognition and can convert new customers into loyal patrons.

3. Manage Expiry Dates Effectively

For time-sensitive products, implement a FEFO (First Expired, First Out) system to ensure fresh products are always dispatched, avoiding customer dissatisfaction.

4. Plan Festive Season Cataloging Early

Avoid last-minute changes to product listings before festive sales, as Nykaa may freeze them. Plan your cataloging well in advance, including product selection and license uploads, to maximize visibility during peak seasons.

5. Optimize Listings with SEO

Use relevant keywords in product titles and descriptions (e.g., "hair serum for frizzy hair") to improve visibility and attract your target audience effectively.

Navigating the Nykaa platform offers a significant opportunity for beauty and fashion brands to tap into a vast, engaged audience. To make the most of Nykaa's top spot and good reputation, brands need to fully grasp the registration process, follow all rules and paperwork, pick the best-selling model, and handle operational challenges effectively.

For sustained success and maximizing profitability on Nykaa, implementing growth tips—from using customer reviews to optimizing listings for search—will be key.