Making beauty fulfilment a success – a look at FEFO inventory management

There has been a boom in the global beauty industry over the last few years. In the UK alone, growth hit double digits rising 11% between 2023 and 2024, according to the British Beauty Council.

This growth has been driven by a number of factors, including demand for sustainable and ethical products, increasing focus on well-being and selfcare and, of course, the influence of social media platforms such as Instagram and TikTok.

Social media provides the perfect place for beauty brands, traditional and new, to engage with customers, personalise their communications and provide a connected experience from start to finish. Over the next few years, thanks to a projected CAGR of 21.2%, the social media marketplace in the UK will reach £15.7 billion in sales. And, currently, beauty and apparel are the most popular categories for social commerce. We looked a little deeper into the power of social commerce in our recent blog.

Loyalty, customer experience and strategic fulfilment

Sustaining this growth is all about customer retention and loyalty, and the role that fulfilment plays in this, is not insignificant.

From ensuring the consistency of experience – making ordering, delivery and returns as smooth as possible, – and managing inventory and near-expiry products, to making sure the warehouse is properly organised and stocked to deal with the peaks and troughs of ecommerce. Most notably, this is where FEFO inventory management comes into its own.

What is FEFO inventory management

With the increased appetite for organic, sustainable and ethical beauty brands, comes increased attention on the quality and longevity of products.

While industries such as food and drink or pet supplies might be the more obvious ones to consider when thinking about batch management and managing expired or near-expiry products, more and more beauty products (just think about skincare fulfilment) are stored, packed and despatched according to the FEFO method.

In essence, the FEFO method – first expired, first out – prioritises products with the earliest expiry dates when it comes to picking and packing orders. These products are therefore the first to be despatched to fulfil orders.

The logic behind this is simple: FEFO inventory management ensures that waste is minimised due to products going beyond their expiry dates; it curbs obsolescence; it ensures that products leaving the warehouse are still of the highest quality, therefore meeting customer expectations, and it gives brands a more accurate picture of cost of goods sold (COGS).

COGS is calculated by adding your starting inventory with purchases, and subtracting ending inventory. When calculating COGS, the FEFO method presupposes that products with the shortest shelf life are sold or despatched first.

Implementing FEFO inventory management

In beauty or skincare fulfilment, using the FEFO method means setting up warehouse facilities to accommodate the approach. In practice, this means organising storage areas and shelves so that products are stored according to expiry date to make it easier to access those with the shortest shelf life for picking and packing.

Getting the most out of FEFO inventory management also means using warehouse management systems (WMS) to capture batch numbers and expiry dates making it easier to track and manage products according to age.

The final element is staff; your warehouse team needs the skills and training to implement and make the most out of the FEFO method, from bringing stock into the warehouse, to picking, packing and despatching orders.

What’s next?

At Fullers our WMS is set up to deal with FEFO inventory management. While different customers do have different requirements, our experience within beauty and skincare fulfilment, along with our processes and technology, all ensure we do what is best for each brand that we work with. If you’d like to find out more on how we can make the FEFO method work for your beauty brand, please contact us for a chat.

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