How to open a cosmetics store

For a small cosmetics store of about 25–40 m², it is reasonable to plan a startup budget of approximately UAH 350,000–950,000. This is an estimated range covering rent, fit-out, the checkout workstation, the first batch of goods, and a cash reserve. If the premises are ready, the store can be prepared in approximately 3–8 weeks. Renovation, furniture, supplier selection, and forming the initial assortment usually take the most time.

Is It Worth Opening a Cosmetics Store?

Demand for cosmetics and personal care products in Ukraine remains strong: the latest available data show a 14% year-on-year increase in the retail value of the market. At the same time, customers carefully compare prices, ingredients, product purpose, and expected results. A store needs a clear specialization and a reason why customers should choose its particular assortment.

For the first retail location, it is easier to work with several clearly defined categories: facial care, hair care, body care, decorative cosmetics, perfumes, or professional products. A large number of brands without sufficient stock creates many items that sell slowly.

A distinctive feature of cosmetics is the large number of product variants. One lipstick model may have dozens of shades, creams differ by volume and skin type, and hair dyes have different color numbers. Therefore, it is important to keep separate records for each item.

There is no universal market margin for a cosmetics store. It should be calculated separately for each category. If a product costs UAH 200 to purchase and sells for UAH 320, the markup is 60%, while the gross margin as a share of revenue is 37.5%. From this amount, the store still has to pay rent, salaries, taxes, acquiring fees, advertising, write-offs, and other expenses.

How Much Money Is Needed to Start?

To plan the budget, first determine the floor area, number of product items, and price segment. The following model can be used for a store of 25–40 m².

Expense item	Estimated amount	What it depends on
First month’s rent and security deposit	UAH 30,000–70,000	City, district, floor area, foot traffic, lease terms
Renovation, lighting, furniture, mirrors, product display	UAH 60,000–180,000	Condition of the premises and store format
Checkout workstation and retail equipment	UAH 20,000–50,000	Computer, scanner, receipt and label printing
First batch of cosmetics	UAH 180,000–500,000	Number of SKUs, brands, average purchase price
Packaging, price tags, consumables	UAH 10,000–25,000	Packaging format and stock volume
Advertising launch and store decoration	UAH 10,000–30,000	Customer acquisition channels
Reserve for the first months	UAH 40,000–100,000	Rent, salaries, taxes, stock replenishment

The total comes to approximately UAH 350,000–950,000. This is a planning model. It is not the average cost of opening a store in Ukraine.

It is better to calculate inventory separately. For example, 700–1,000 SKUs with an average stock of 1.5 units and a purchase price of UAH 180–300 require approximately UAH 189,000–450,000. If the supplier offers deferred payment or you start with fewer categories, the amount of required capital decreases.

Step 1. Business Registration

Sole Proprietorship or LLC

For one small store, a Sole Proprietorship is usually sufficient if the entrepreneur meets the requirements of the selected taxation system. An LLC is appropriate when there are several founders, an investor, a more complex ownership structure, or the business plans to operate as a legal entity.

A Sole Proprietorship can be registered online through the Diia portal. You need to log in, complete the application, select KVED codes and a taxation system, and sign the document electronically. Registration is carried out automatically.

Which Single Tax Group to Choose

Group 2 is suitable for a Sole Proprietorship that sells goods and employs no more than 10 employees at the same time. The annual income limit is UAH 7,211,598. The maximum single tax is UAH 1,729.40 per month, the military levy is UAH 864.70, and the minimum Unified Social Contribution is UAH 1,902.34.

Group 3 has an annual income limit of UAH 10,091,049 and does not limit the number of employees. The single tax rate is 5% of income or 3% for VAT payers. The military levy is 1% of income.

For a small retail outlet, Group 2 often fits the business model. If the expected turnover approaches its limit, a large number of employees is planned, or the business structure is more complex, it is worth checking the conditions of Group 3 with an accountant.

Which KVED Codes Are Required

The main KVED code for a specialized cosmetics store is 47.75 «Retail sale of cosmetic and toilet articles in specialized stores».

If the store will accept orders through its own website or other remote channels, add 47.91 «Retail sale via mail order houses or via Internet». If wholesale trade in cosmetics is planned, separately check KVED 46.45.

How to Submit the Documents

For a Sole Proprietorship, the shortest route is through Diia. After registration, check the extract from the Unified State Register, the taxation system, and the list of KVED codes. After renting the store, notify the State Tax Service about the business facility through which the activity is carried out.

Form 20-OPP must be submitted within 10 business days after obtaining the right to use the facility. This also applies to rented premises. The form can be submitted through the State Tax Service Electronic Cabinet.

Step 2. Permits and Licenses

No separate retail license is required for ordinary retail sales of finished cosmetics and perfumes. Cosmetic products are regulated by technical requirements concerning their safety, labeling, placing on the market, and traceability.

The transitional period for implementing the Technical Regulation has been extended until July 31, 2027. From December 13, 2026, a resolution providing for a longer adaptation period until August 3, 2030, is expected to take effect.

For an ordinary store, the main task is to check the goods when purchasing them. The distributor must check the expiration date, comply with storage conditions, ensure supply traceability, and verify that the products meet the established requirements.

Do not demand an abstract «cosmetics certificate» from the supplier as the only proof that the goods are legal. Ask who the manufacturer, importer, and responsible person are, which documents confirm the origin of the batch, and whether the labeling and notification requirements have been met.

If an entrepreneur imports cosmetics independently, sells them under their own trademark, or modifies a product in a way that may affect its compliance, the scope of obligations increases. In this situation, the status of the responsible person, safety assessment, documentation, and product notification requirements should be checked separately.

If the assortment includes products that are legally classified as medicines, medical devices, disinfectants, or other regulated categories, separate rules apply to them. The category of such goods should be checked before purchasing.

Step 3. Premises

For a first cosmetics store, an area of 25–40 m² can be used as a practical benchmark. This is enough for a sales floor, checkout area, and a small stock reserve if the store does not keep large quantities of goods on site.

When choosing a location, assess customer traffic, neighboring retail businesses, entrance visibility, the ability to install signage, and the convenience of goods delivery. Lighting quality is also important for cosmetics because customers evaluate shades of decorative cosmetics directly in the store.

In the lease agreement, check the floor area and premises number, lease term, security deposit, procedure for increasing rent, utility payments, the right to install signage, access to the premises, and early termination conditions.

Organize product storage separately. Follow the temperature, humidity, and other conditions specified by the manufacturer. Goods with damaged packaging, expired items, returns, and testers should preferably be physically separated from stock available for sale.

After obtaining the right to use the premises, submit Form 20-OPP. Information about the retail location will also be required when registering a pECR or ECR.

Step 4. Checkout and Fiscalization

For an ordinary store that accepts cash or card payments, transactions must be processed through an ECR or pECR. Exceptions depend on the taxation group and the method of accepting payments. In particular, an ECR or pECR is not used by Group 1 Sole Proprietorships and when payment is made exclusively by bank transfer to an account using IBAN details.

For a stationary cosmetics store with a card terminal, in practical terms it should be assumed that fiscalization is required.

A pECR is registered through the State Tax Service Electronic Cabinet. An electronic application using Form No. 1-pECR J/F1316605 must be submitted. Before doing so, make sure that information about the retail location has been submitted to the State Tax Service.

If the pECR is connected to Torgsoft, the cashier processes the sale in the software and performs the fiscal transaction within the configured checkout workflow. This way, the inventory sale and the fiscal document are linked in a single transaction.

Failure to process a transaction through an ECR or pECR, issuing a receipt for an incomplete amount, or failing to provide the required settlement document is subject to financial penalties: 100% of the value of the goods for the first violation and 150% for each subsequent violation.

Step 5. Retail Store Equipment

A cosmetics store needs a checkout computer, barcode scanner, fiscalization solution, and equipment for cashless payments. A label printer and cash drawer depend on the store’s workflow.

• LEABON LB-W7 J4125 15.6'' 8/128 touchscreen all-in-one PC can be used as a checkout workstation where the salesperson processes sales, returns, and payments.
• Netum W6 X wireless scanner is used for quickly reading factory barcodes at the checkout, when receiving goods, and during inventory counting.
• Xprinter XP 235B label printer is needed if the store prints its own barcodes, price tags, or labels for goods without suitable factory labeling.
• Xprinter XP-58IIK USB+ RS-232 + Bluetooth + WiFi receipt printer is used if the store provides customers with a paper receipt.
• Maken CX-240 cash drawer is needed at a checkout that accepts cash and stores it at the workstation.

Before purchasing equipment, check the model, connection type, and compatibility with Torgsoft. This is especially important for printers, fiscal devices, and bank terminals.

For expensive perfumes, small items, and decorative cosmetics, it is also worth assessing the need for anti-theft equipment, video surveillance, and closed display sections. The required setup depends on the store area and the value of the assortment.

Step 6. Product and Cash Accounting

In a cosmetics store, inventory accounting should be organized before the first major purchase. Otherwise, identical products quickly turn into dozens of similar items that are difficult to receive, sell, and count correctly.

For each SKU, define the product card structure: category, manufacturer, trademark, product line, SKU, barcode, volume, shade, and other characteristics required for your particular assortment.

In Torgsoft, additional dynamic characteristics can be created for products. For cosmetics, these may include shade, volume, skin type, hair type, purpose, or product line. Receipt, sale, return, write-off, and inventory operations change warehouse data through the corresponding software documents.

Expiration dates require a separate store procedure. Employees check the date when receiving goods, regularly inspect shelves, remove expired goods from sale, and process their write-off. You should not rely solely on turnover analysis: a product may sell slowly while different units have different remaining shelf lives.

Testers should also be separated from saleable inventory. When a saleable unit is converted into a tester, record this as a separate business transaction and write it off from the stock available for sale.

Inventory counting in a small store can be performed with a scanner. The employee counts the actual quantity, after which the recorded quantity is compared with the actual quantity. For cosmetics, it is useful to check small expensive items and products with a large number of shades more frequently.

Every day, the owner should see at least revenue, number of sales, returns, stock balances of popular items, and cash movements. Once a week, it is advisable to check products that are running out, selling slowly, or need to be reordered.

Step 7. Suppliers and Assortment

For the first purchase, look for manufacturers, official importers, and distributors. Contacts can be obtained directly from brand websites, manufacturers, professional exhibitions, and industry suppliers.

Before agreeing on a purchase, check the origin of the goods. The supplier must clearly identify themselves, the manufacturer or importer, the product, and the supplied batch. Also clarify who the responsible person for the cosmetic product is and which documents confirm that the products were legally placed on the market.

The contract or commercial terms should specify the minimum order, delivery times, deferred payment, procedure for returning defective goods, handling of products with a short remaining shelf life, and provision of testers and promotional materials.

The first purchase should be based on customer needs. For example, for a skincare store, first create complete basic categories: cleansing, moisturizing, sun protection, hair care, and body care. Then add more specialized groups.

For decorative cosmetics, the main risk is the number of shades. Ten models with twenty shades each create 200 separate SKUs. If three units of each are purchased, the store immediately receives 600 units of stock in just one product group.

Use the first 4–8 weeks as a period for collecting your own statistics. Reorder items that sell repeatedly, and do not increase the stock of goods that remain on the shelf. After several purchasing cycles, the assortment will become more accurate than any general list of «must-have brands».

Step 8. Staff

For a small retail outlet, one salesperson per shift is often sufficient. If the store has high customer traffic or consultations take a long time, a second person is needed during busy hours.

An employee must be formally employed before actually starting work. The employer concludes an employment agreement, issues an employment order, and submits a notification to the State Tax Service before the employee starts working.

The minimum salary is UAH 8,647. The employer pays a 22% Unified Social Contribution. Personal income tax of 18% and a military levy of 5% are withheld from the employee’s salary. The actual staff budget should be calculated based on the real salary the store plans to pay in its city.

Before opening, the salesperson should know the assortment, payment acceptance rules, return procedures, how to work with testers, how to check expiration dates, and checkout procedures. Advice about cosmetics should remain within the product’s properties and method of use and should not involve medical diagnosis of the customer.

In Torgsoft, access rights and separate user accounts can be configured for employees. The activity log and change log help the manager check completed operations if there is a discrepancy in products, prices, or documents.

Step 9. Launch and First Sales

One week before opening, the store should operate like a fully prepared retail outlet. Do not leave product entry, checkout testing, or price configuration until the morning of the first day.

1. Receive the main deliveries and check the documents, packaging, and expiration dates.
2. Enter all products into the inventory system and check the barcodes.
3. Print any missing labels and price tags.
4. Perform a full count of the opening stock.
5. Test cash and card sales.
6. Check the fiscal receipt and return procedure for a test sale.
7. Define the rules for handling testers and damaged products.
8. Check cashier and administrator access rights.
9. Prepare the sign, opening hours, and customer information.
10. Create a Google Business Profile and add up-to-date contact details.

At launch, it is more useful to attract customers with a specific category or offer than simply to announce the store opening. Choose several product groups for which the store has sufficient stock and a clear price proposition.

During the first month, separately record customer demand for products that are not yet in the assortment. Repeated requests provide a basis for the next purchase.

Common Mistakes at Launch

• An excessively large first purchase. Money remains tied up in dozens of shades and products whose demand has not yet been tested.
• Purchasing without checking the supplier. It becomes more difficult for the store to confirm product origin, the responsible person, and product traceability.
• No expiration date control. Slow sales gradually turn part of the stock into write-offs.
• Testers mixed with saleable goods. The recorded stock shows a unit that can no longer actually be sold.
• One product name for several shades. After several deliveries, the actual assortment and recorded assortment begin to differ.
• Prices and discounts are managed manually. Different values appear on the shelf, at the checkout, and in the inventory system.
• The checkout is tested only after opening. An error with the pECR, payment, or return appears while serving an actual customer.

Opening Checklist

1. Define the store format, price segment, and main categories.
2. Prepare a startup budget and reserve model.
3. Register a Sole Proprietorship or LLC.
4. Add KVED 47.75 and any required additional KVED codes.
5. Select a taxation system.
6. Find premises and sign a lease agreement.
7. Submit Form 20-OPP.
8. Check suppliers and requirements for cosmetic products.
9. Agree on the first purchase and conditions for returning defective goods.
10. Set up the sales floor and storage area.
11. Prepare the checkout computer and retail equipment.
12. Register a pECR or ECR if required for the selected payment methods.
13. Create the product catalog structure.
14. Enter products, characteristics, purchase prices, and selling prices.
15. Receive the first delivery and check expiration dates.
16. Perform an opening inventory count.
17. Employ staff and configure access rights.
18. Test the sale, payment, receipt, and return process.
19. Define the accounting procedure for testers, defective goods, and write-offs.
20. Prepare the sign, opening hours, and information in online channels.
21. Open the store and review sales, stock balances, and reorder needs every week.

Questions and Answers

?Which KVED code is required for a cosmetics store?

The main KVED code for a specialized cosmetics store is 47.75. If you accept orders online, add 47.91. For wholesale trade in cosmetic products, check 46.45.

?Can a cosmetics store operate under Group 2 as a Sole Proprietorship?

Yes, if the Sole Proprietorship meets the Group 2 restrictions on income, number of employees, and types of activity. For ordinary retail sales of cosmetics, the product category itself does not prohibit the use of Group 2.

?Is a license required to sell cosmetics?

No separate retail license is required for ordinary finished cosmetic and perfume products. The store must comply with requirements for distribution, storage, expiration dates, and product traceability.

?Is a certificate required for every cosmetic product?

Cosmetics regulation is built around the responsible person, product safety, documentation, notification, and correct labeling. When purchasing goods, check the legality of their origin and compliance with the requirements rather than relying solely on a document called a «quality certificate».

?What changes if cosmetics are sold under your own trademark?

In this scenario, the seller may acquire the status of the responsible person for the product. Before launching your own brand, you should separately check the requirements for safety assessment, documentation, manufacturing, labeling, and notification.

?Is a pECR required for a cosmetics store?

If the store accepts cash, bank cards, or other settlement payments, an ECR or pECR is required for a standard Group 2 or Group 3 Sole Proprietorship. Payment exclusively by bank transfer using IBAN details is subject to a different procedure.

?How should expiration dates be controlled?

Check them with every incoming delivery, do not accept goods with an unacceptable remaining shelf life, regularly inspect shelves, and store goods removed from sale separately. Expired items should be processed as write-offs.

?How much stock should be purchased for opening?

Start with the number of SKUs and the average stock per item. For example, 700–1,000 SKUs with 1–2 units each give approximately 1,000–2,000 units of goods. Increase stock depth after you have your own sales data.

Where to Start with Automation

Before purchasing all the equipment, test your own workflow: create several cosmetic products with different shades and volumes, and process a receipt of goods, sale, return, tester write-off, and inventory count. This makes it possible to determine the product catalog structure and checkout workstation setup in advance. The Torgsoft demo version works for 30 days. Checkout equipment is collected in the retail equipment section.

The amounts, rates, limits, and requirements are stated as of August 2026. Tax legislation and cosmetic product regulations change: before registration, purchasing goods, and submitting documents, check the current requirements on the websites of the State Tax Service and the State Service of Ukraine on Medicines and Drugs.