How DTC brands like Youthforia are evolving their wholesale strategies

Founder and CEO Fiona Chan told Modern Retail that getting one product on a shelf is “like a miracle,” let alone an entire line of items.

“For our category specifically, makeup is such a sensory product,” she said. “Just even to have a tester in store is huge for us.”

At a moment when many DTC brands are considering ways to expand into other channels, getting a brand onto shelves — and staying there — can require significant operational shifts. And while Ulta and Youthforia did not share sales data, Chan said the partnership has gone a long way in driving awareness of Youthforia’s products.

In turn, the small startup has changed the way it structures itself to meet the demands of a national retailer. Chan said there is now an internal team at Youthforia dedicated to the Ulta account. Overall, operations involve more planning once a wholesale account is live, like checking with suppliers to make sure inventor deadlines can be met, ensuring deliveries can be on time and assisting with any marketing needs. 

And that growth has begotten more growth: In addition to Ulta, Youthforia is on sale at JC Penney’s beauty counters and online marketplaces like Amazon, Credo Beauty and Revolve Makeup. Roughly half its sales still come direct-to-consumer, with wholesale representing the other half.

“Ever since we started working with Ulta, from an operations standpoint, going from a DTC business to support a large retailer like Ulta required a huge change in processes,” she said.

Operational changes

Chan, who secured an investment from Mark Cuban when Youthforia appeared on Shark Tank in an early 2023 episode, started the brand with the idea of creating “makeup you can sleep in.” The blush oil product wound up going viral as users on TikTok demonstrated how the product create a unique color based on their own skin’s pH.

The brand is now experiencing a growth spurt that includes the Ulta expansion. Youthforia saw a sales growth of 200% last year and sold three times as much of its BYO Blush as the year before. It launched its new Date Night foundation in August and then added 10 new shades in conjunction with the Ulta expansion.

But becoming a brand on Ulta’s shelves meant relinquishing some control — Ulta, for example, decided which stores to launch in initially. But Chan trusted the retailer’s roadmap to help get Youthforia in people’s hands. “Ulta has this great breadth,” Chan said. “They cover so much of the U.S. and because we were really on social, it wasn’t really limited from a geographic location. We just wanted to be available for customers to go in and try for themselves.

Now, “pretty much every department has the lens of supporting our DTC business but also Ulta ,” Chan said. But there is also a team that’s dedicated to watching the sales numbers and looking ahead at the calendar to make sure Ulta’s account has the inventory it needs. While a DTC brand can launch a new product on its own timeline, having that same product land in a retailer requires “months and months of planning,” Chan said. For example, the brand’s Date Night foundation that launched in August 2023 was only available at a portion of Ulta stores, and will now be available at 525 as part of the recent expansion.

Al Sambar, general partner at XRC Ventures, has supported multiple brands in scaling their wholesale operations. He said there’s also a host of supply chain considerations, like whether the product data systems are 100% accurate to prevent “maddening product flow issues.” In addition to the retailer’s own deadlines and logistical needs, Sambar also said that brands need to make sure their vendor relationships are tight and fully understood.

“Vendor compliance penalties on top of their payment terms can make you wish you never even thought about wholesale if you aren’t ready for them,” he said.

Growing a partnership

Sam Gummer, sales director at canned Bloody Mary mix company Longbottom, has worked for multiple beverage brands to grow their wholesale operations around the world. He said Longbottom’s origin as a DTC brand helped prime it for wholesale distribution because of the first-party data it collected about what products people buy the most, and from where. Data, he said, “is absolutely key” to wholesale expansion — such as choosing what markets to locate in, and what products they might pick up.

In picking a retailer to work with, Gummer said brands have to consider what their added value is that will grow basket sizes — not just simply be another product in an existing category. In the case of Longbottom, the aluminum can packaging gives it a unique look and the formula doesn’t have corn syrup like some of its competitors. “If it’s just a replacement, it’s cannibalizing sales,” he said.

There’s also the ability to help retailers display the product, Gummer said. When Longbottom sought out a wholesale distributor for on-premise in the United States, it tapped Breakthrough Beverage Group, which has a portfolio of alcohol brands like Ketel One to help pair the products together at restaurants and hotels. In supermarkets, the brand often helps with displays that position Longbottom for a brunch menu alongside various snacks or mixers. “We try to tap in and make sure we’re providing an alternative,” he said.

At Youthforia, the brand helps market its Ulta presence by showing off the products on its social media. It’s also been teasing the expansion in conjunction with going behind the scenes on its marketing for the new foundation shades.

Moving forward, Youthforia’s Chan has her eye on getting into other national retailers. Working with Ulta already helps drive that conversation, she said. “If you can show you’re a brand that can operate and support the scale an Ulta requires, it does speak to your operational capabilities.”