Beauty Brand Due Diligence Checklist: The Data to Request Before You Invest
By Sébastien Clavier, COO at We-Curate. Has prepared valuations and investor materials for growth-stage companies and reviewed consumer brands for venture investors. Reviewed by Virginie Duchatelle, Founder & CEO.
A beauty brand due diligence checklist is the list of data an investor or acquirer should request to test whether a beauty brand’s growth, retail position and margins will hold after the deal. This is the one we work from, organized by what each request reveals and what a bad answer looks like.
Most generic data request lists are written for any consumer business. They ask for revenue by channel and a customer list, and stop there. In beauty, the numbers that decide the deal sit one layer down: what retailers actually sold, what is still sitting in their stockrooms, and how much margin quietly leaves through chargebacks and promotions.
How to use this list
Each request is marked by priority:
- Critical: ask in the first 48 hours. If it cannot be produced, that is a finding in itself.
- Important: needed before the investment committee.
- Useful: sharpens the view, but rarely changes the decision.
Ask for monthly data over at least 24 months, and 36 if the brand has had a major retail launch in that period. Anything shorter hides the shape of the curve.
1. Sales and quality of growth
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Monthly net sales by channel (DTC, each retailer, marketplace, distributor), 24-36 months | Critical | Growth concentrated in the months after a new listing, flat or falling elsewhere |
| Door count by retailer over time | Critical | Door count rising faster than sales: productivity per door is falling |
| Sales by SKU, with launch dates | Critical | One hero product above 40-50% of sales, with recent launches not sticking |
| Gross-to-net bridge: list price to net revenue, including discounts, allowances and returns | Important | Gross-to-net widening year on year |
| Management’s own split of growth into new doors, productivity, price and new consumers | Useful | Management cannot do the split at all |
2. Retail sell-through and inventory
If you can only get one dataset, get this one. Revenue is what the brand shipped. Sell-through is what consumers bought.
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Retailer point-of-sale data by SKU and month, for each major retailer | Critical | Sell-in running ahead of sell-through for two or more quarters |
| Weeks of inventory held at retail, by retailer | Critical | Weeks of cover rising while sell-through is flat |
| Returns, damages and markdown support by retailer | Important | Rising markdown money, or returns booked against later periods |
| Brand’s own inventory by SKU, with ageing and expiry dates | Important | Stock close to expiry or past its period-after-opening window |
| Inventory write-offs, 24 months | Useful | Write-offs growing faster than sales |
3. Retailer terms and relationships
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Signed agreements and current terms with each top-five retailer | Critical | No written agreement, or exclusivity the brand cannot afford to keep |
| Space and fixture history by retailer over the last four seasons | Important | Space quietly reduced, or moved from fixture to online-only |
| Promotional calendar and funding commitments for the next 12 months | Important | Promotions the plan does not budget for |
| Correspondence on range reviews, delistings or performance warnings | Important | A range review coming up that management has not mentioned |
4. Margin and cost to serve
This is where operations show up in the numbers, and where generic diligence most often stops looking.
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Landed cost per unit by SKU and market (product, packaging, freight, duty) | Critical | Nobody can produce it per market |
| Contribution margin by channel and by retailer | Critical | The fastest-growing account is the least profitable one |
| Retailer chargebacks and compliance fines, by retailer and by cause | Important | Not tracked, or growing faster than sales to that retailer |
| Manufacturer and component supplier terms, MOQs and price-review clauses | Important | Gross margin supported by terms that end or reset at a change of control |
| Costs carried personally by the founder or a related company | Important | Margin that only exists because someone is not being paid |
5. Customers and retention
| Request | Priority | What a bad answer looks like |
|---|---|---|
| DTC repeat purchase by monthly acquisition cohort | Critical | Each new cohort repeating less than the one before |
| Customer acquisition cost by channel, over time | Important | Acquisition cost rising while order value is flat |
| Subscription data, if any: churn, pauses, skips | Important | Churn hidden inside “paused” subscribers |
| Review volume and rating trends on the brand’s own site and at retailers | Useful | Review volume falling faster than sales |
6. Pricing and promotions
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Share of units sold at full price, by channel, by month | Critical | Full-price share falling, with growth concentrated in promotional periods |
| Price history by SKU and market, including any increases and the volume response | Important | Volume dropped sharply after the last increase |
| Price positioning against the five closest competitors at each key retailer | Useful | Priced above the tier without the brand equity to justify it |
7. Product, pipeline and supply chain
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Product development pipeline with stage, target date and status for each item | Important | The plan depends on launches still at concept stage |
| List of manufacturers and component suppliers, with share of volume and second sources | Important | A single filler or component supplier with no backup |
| Stockout history on top SKUs, 24 months | Useful | Repeated stockouts during retail launches |
8. Regulatory and claims
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Registrations and notifications in every market sold (MoCRA in the US, SCPN in Great Britain, CPNP in the EU) | Critical | Products on sale in a market without the required notification |
| Product Information Files and safety assessments for each SKU | Important | Files missing, out of date or held only by a former consultant |
| Substantiation for every marketing claim | Important | Claims used in the US that would not pass in Europe |
| Complaints, adverse event reports and any regulator correspondence | Important | No complaint log at all |
9. Brand, marketing and people
| Request | Priority | What a bad answer looks like |
|---|---|---|
| Marketing spend by channel against sales by channel, 24 months | Important | Sales only hold when spend goes up |
| Trademark registrations by market, and ownership of brand assets and content | Critical | Trademark or content owned by the founder personally, or not registered in a target market |
| Organization chart with tenure, and who holds each key retailer relationship | Important | Every top retailer relationship sits with the founder |
| Founder’s post-deal role, contract and incentive terms | Critical | No agreed answer to what the founder does after closing |
When the data does not exist
Many founder-led beauty brands cannot produce half of this list. That is not automatically a reason to walk away. It is a reason to ask why.
A brand that does not track sell-through, chargebacks or margin by channel is not hiding anything, most of the time. It simply has not been run on data yet. But it means the investment case rests on numbers nobody has checked, and the first hundred days after the deal will be spent building the reporting rather than growing the business. Price that in.
The ten requests to send first
If you have 48 hours and one email, send these:
- Monthly net sales by channel and retailer, 24-36 months
- Retailer point-of-sale data by SKU
- Weeks of inventory held at retail
- Door count by retailer over time
- Sales by SKU with launch dates
- Landed cost per unit by market
- Contribution margin by channel and retailer
- Share of units sold at full price
- DTC repeat purchase by cohort
- Regulatory registrations in every market sold
What these reveal, and what to do with it, is covered in our guide to commercial due diligence for beauty brands and in the red flags we look for before a beauty brand acquisition. If you are on the selling side, the same list tells you what to have ready: that is the work of vendor due diligence.
Frequently Asked Questions
What should be on a beauty brand due diligence checklist?
Monthly sales by channel and retailer, retailer point-of-sale data and inventory held at retail, retailer terms, landed cost and margin by channel, chargebacks, DTC retention by cohort, full-price sell-through, the product pipeline, regulatory registrations in every market, trademark ownership and the founder’s post-deal role.
What is the most important data in beauty due diligence?
Retailer point-of-sale data compared with the brand’s shipments. Shipments are booked as revenue, but only consumer purchases show real demand. A gap between the two usually means inventory is building up at retail.
How many months of data should an investor request?
At least 24 months of monthly data, and 36 months if the brand has had a major retail launch in that period, so the effect of the launch can be separated from underlying growth.
What if a beauty brand cannot produce the data?
Missing data is a finding, not necessarily a deal-breaker. It usually means the business has not yet been run on data, which adds risk to the investment case and work to the first hundred days after the deal.
Is this checklist also useful for sellers?
Yes. A seller who can produce this data before a sale process removes much of the uncertainty buyers would otherwise price in.
Need a Category View on a Live Deal?
If you are working through a data room on a beauty or luxury brand and want a second read from people who have run these businesses, we can help on the deal timetable. How we work with investors is set out on our beauty brand due diligence and investment advisory page.
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Related reading: Commercial Due Diligence for Beauty Brands · The Red Flags We Look For Before a Beauty Brand Acquisition · Vendor Due Diligence for Beauty Brands