How to Forecast Inventory for Sephora: Launch Curves, Dotcom and Gratis

Forecasting inventory for Sephora means forecasting a launch curve, a hero SKU, and a dotcom business that can be as large as your store business, while funding testers, gratis and holiday sets that never show up as revenue. Sephora replenishes on sell-through with per-door minimums and maximums, so once your item is on shelf the orders are fairly predictable. The hard parts are the launch, the two annual sale events, and the inventory you ship that nobody pays for. This guide covers each, with a fictional skincare example carried through to cash.

How Sephora orders from a brand

Sephora, part of LVMH, operates several hundred standalone stores in the US and Canada, hundreds more shop-in-shops inside Kohl's, and a large ecommerce business. Brands ship to Sephora's distribution centers, and Sephora allocates to doors and to its online fulfillment from there. Store replenishment typically runs on a min/max model: each door carries a target on-hand per SKU, and when sales pull it below the minimum the system replenishes toward the maximum. POs to you are therefore driven by aggregate DC depletion across stores plus dotcom, usually on a weekly cadence, and they are smoother than the lumpy case-pack POs of grocery or mass.

Several things make Sephora different from other retailers in your forecast:

• Newness drives the calendar. Launches are scheduled months ahead into specific launch windows, with marketing support tied to the date. Missing the window is worse than missing a reorder.
• Dotcom is a first-class channel. Sephora.com and the app often account for a large share of a brand's Sephora volume, especially for replenishment skincare. Forecast it as its own line with its own velocity, not as a percentage of store sales.
• Testers and gratis are inventory, not revenue. Brands typically supply testers for each door and gratis (samples and deluxe minis) for sampling programs at no charge. They consume production capacity and cash exactly like sellable units.
• Returns and damages flow back. Sephora's consumer return policy is generous, and returned or damaged units are typically charged back to the brand as deductions. Build a damages and returns allowance into net revenue.

Wholesale economics in prestige beauty typically run near 50% of retail, and brands often fund some share of markdowns on discontinued items or take product back (return to vendor) when a SKU exits the assortment. Payment terms are negotiated by brand and typically land in the 30 to 60 day range; confirm yours.

Door-count and velocity math, with dotcom

The formula adds a channel:

Weekly Sephora demand = (units per door per week x active doors) + dotcom units per week

Opening order = (door maximum x doors) + dotcom opening stock + DC cover + testers (1 or more per door) + gratis units

Replenishment POs = depletion since the last PO, rounded to inner pack

For a launch, velocity in the first four to six weeks will run well above steady state because of launch marketing, newness placement and sampling. Forecast the curve, not a flat rate: a common shape is a peak in weeks 1 through 3, a decline to roughly half of peak by week 8, and a steady state thereafter that depends on repeat purchase. Replenishment skincare settles higher than color cosmetics because repeat rates are higher. The Sephora forecasting template is set up with that curve as an input, and our post on Sephora sales forecasting walks through filling it in.

The Sephora promotional calendar

Two events dominate. The Sephora Savings Event for Beauty Insider members runs twice a year, typically spring and fall, with tiered discounts by loyalty status. Lift during the event is large, often several times normal weekly velocity, and Sephora builds DC inventory ahead of it, so expect an oversized PO two to four weeks before. The discount itself is typically Sephora-funded rather than charged back to the brand, but confirm the arrangement for your category. Holiday is the second: value sets and gift sets are planned in the spring, ordered in summer and delivered to DCs in late summer or early fall, as a separate SKU with a hard ship window and no second chance. Model holiday sets as a one-time program with a committed quantity, and plan a markdown or RTV scenario for the unsold tail in January.

A worked example: Lumen and Clay serum launch

Take a fictional skincare brand we will call Lumen and Clay, launching a hero serum in 300 Sephora doors plus dotcom. Assumptions: retail $48, wholesale $24, landed cost $7 per sellable unit and $4 per tester or deluxe mini, door maximum of 8 units and minimum of 4, steady-state velocity of 3 units per door per week after week 8, launch curve peaking at 6 units per door per week in weeks 1 through 3, dotcom at 60% of store volume, 2 testers per door at launch and 1 replacement per door every 8 weeks, gratis of 15,000 deluxe minis for the launch sampling program, filler lead time 12 weeks, terms 45 days, and a returns and damages allowance of 4% of gross.

• Opening order (sellable): 8 x 300 = 2,400 store units, plus dotcom opening stock of 60% of three weeks at peak store velocity (0.6 x 3 x 1,800 = 3,240), plus two weeks of DC cover at peak (2 x 1,800 x 1.6 = 5,760), about 11,400 units, $273,600 gross, roughly $262,700 after the 4% allowance.
• Non-revenue inventory at launch: 600 testers plus 15,000 minis = 15,600 units at $4, $62,400 of cash with no invoice attached.
• Peak weekly demand (weeks 1 to 3): 6 x 300 = 1,800 store units plus 1,080 dotcom = 2,880 units, about $69,000 gross a week.
• Steady state (week 8 on): 3 x 300 = 900 store plus 540 dotcom = 1,440 units, about $34,600 gross a week, plus roughly 38 testers a week on average.
• Production for launch plus 12 weeks: about 11,400 opening plus roughly 22,000 replenishment, 33,400 sellable units at $7 ($233,800) plus $62,400 of testers and minis, roughly $296,000 paid to the filler about 12 weeks before launch.
• Cash: the opening order pays in week 6 or 7 (delivery plus 45 days), so Lumen and Clay is out roughly $296,000 for about 18 weeks from paying the filler to the first Sephora remittance. The fall Savings Event then adds a build PO of roughly 5,000 units three weeks before the event, which is good news for revenue and another $35,000 of production cash in the quarter it lands.

The point of running the numbers this way is that the $62,400 of testers and gratis and the $296,000 cash gap appear in the plan before the launch date is locked. For the PO-to-cash mechanics see purchase order forecasting; for how Sephora compares with Ulta and other specialty accounts, see the retail inventory forecasting hub; for more beauty-specific models, see the beauty brands template library.

Where Drivepoint fits

Drivepoint is the AI finance platform for consumer brands, and beauty launches are a case where the forecast, the inventory and the cash have to live in one model. It connects Sephora sell-through and PO data alongside Shopify, Amazon and your accounting system through 100+ integrations, forecasts the launch curve by door and by dotcom inside your Excel model, and carries sellable units, testers and gratis through to the P&L, balance sheet and cash flow. AI scenario planning lets you test a 500-door expansion, a holiday set quantity or a slower launch curve in minutes, not days.