How to Start Your Own Line of Skin Care Products

So you’ve come up with a unique concept in skin care and want to figure out how to capitalize on it.  This article will give you a basic starting point.  There are many things to consider, such as research and development, manufacturing, packaging, labeling, FDA regulations, sales and marketing, pricing, warehousing and fulfillment, distribution, etc.  We will touch upon each of these in this article.

R&D

By now, I’m guessing that you’ve done a fair amount of research on your idea.  These days, anyone with an internet connection can do more research in an hour than we could have in months decades ago.  With all of the skin care giants on the market, you’ve probably figured out that in order for a small company to have a fair shot, you need to have a niche or something specific to define your brand and allow you to stand out among the huge companies that have already conquered the industry. 

You might have already been able to identify why your niche idea is beneficial and why consumers might be interested in purchasing products like the ones you are considering.  What you may not have researched or even thought about yet are the reasons not to consider your niche.  Sometimes being so excited about a new business idea makes you overlook its deficits.  Do yourself a favor and consider this when doing your research.  In other words, don’t fall in love with your idea or concept until you’ve considered its downside and unforeseeable problems.

Most of the real work on research and development might not even be done by you.  Unless you are a chemist, you may need to consider outsourcing the development of your products.  There are many private label manufacturers that have FDA inspected and approved laboratories that can make just about any product you are trying to create.  If you had visions of mixing up some miracle concoction in your bathtub, please don’t.  In order to sell these products to the public, there has to be safety procedures in place.

Manufacturing

As mentioned above, regardless of the type of products you want to create, there are private label laboratories that have the capability of making them for you.  Unless you have the time and resources, this is the most logical way of getting a skin care brand off the ground.  You can discuss with the lab precisely what kind of products you want them to make for you.  They may already have similar formulations that can be adjusted to your specifications or they may be able to do some reverse engineering to make your products similar to an existing product.

You will have to do your homework in terms of finding the right private label manufacturer for your project.  For example, if you want your products to contain all natural or organic ingredients, go with a manufacturer that specializes in making products like that.  There has been a major shift in the industry whereas many consumers have become label savvy and know more about what ingredients may or may not be harmful or toxic.  Some consumers are also misinformed or might think they know what ingredients are better, which will always be a challenge in the way you market your products.

In the past, manufacturers had no problem using chemical-based or synthetic ingredients in their products.  Some still do.  There are some consumers today who believe everything that’s natural is good and everything that is synthetic is bad.  This of course is not the case but fighting this stigma is difficult, or in some cases impossible.  The problem is that chemical-based synthetic ingredients in skin care products have a tendency to be very smooth and creamy.  Some of them even smell good.  Whereas many natural ingredients can be pasty or gritty and smell horrible.  That’s why it’s important to use a manufacturer who has already figured out how to make natural ingredients seem as creamy and luxurious as the synthetic ingredients, if that is the market you’re trying to reach.

Packaging

Some private label manufacturers may offer a turnkey solution that includes packaging.  Others may not, which will require you to seek out a packaging manufacturer that has the right solution to suit your products.  The packaging must be esthetically pleasing to consumers but yet practical and cost effective. The packaging of your product is extremely important because it’s the first thing customers will see while your product is sitting on the shelf before they even consider the possibility of trying or purchasing your product.  If your packaging is not right, in may not matter how good your product is.  Customers just won’t buy it if something on the packaging doesn’t catch their eye.

Labeling

The content on your label is both important and tricky because it not only has to give customers a reason to want to buy your product but if you’re selling the product within the United States, it has to meet all FDA regulations, even if the product itself is exempt from FDA registration.  You may need to consult with a lawyer who specializes in FDA labeling regulations about your content.  If your labels are not compliant, the FDA could require retailers to remove all of your products off the shelves which may result in you reimbursing the retailers all of the money they’ve already paid you.  Labels are virtually impossible to remove once they’ve been applied to packaging which means you will also waste a considerable amount of inventory which translates to you losing a lot of money that you’ve already invested into your product.

There could be other labeling considerations to keep in mind depending on where your selling the products.  For example, if you intend on selling your products in Canada, the content may need to be listed in both English and French in accordance with Health Canada’s labeling regulations.

FDA

If your products are considered to be cosmetic, then they won’t necessary have to be approved by the FDA as a registered drug.  If your products have some type of healing purpose, they may be considered an over-the-counter product which still might make them exempt from FDA registration but will require specific manufacturing and labeling considerations.  The FDA is not an agency you want to try to get over on.  They have the power and ability to make your life hell, and believe me they will if they feel you are violating their regulations.

Sales and Marketing

Once you have a finished product, the next challenge will be figuring out how to introduce it to the world.  Start off with determining your marketing budget.  Even if your marketing budget is $0, at least define and amount and figure out how much money you have to work with, if any.  If you have limited funds, you must choose your marketing strategy wisely as to maximize your funds.

One way to get your products out there is to develop a website and sell them online.  Ecommerce websites that allow you to accept credit card payments and have an online shopping cart are expensive and could cost thousands of dollars to develop properly.  However, once you have a website in place, it could be the easiest way to start generating revenue. 

Another way to start selling your products is by contacting retail stores that sell similar products to see if they would be interested in purchasing your products to sell in their store.  There are also independent sales reps that may be interested in selling your products.  Some of these reps may work on a commission-only basis and some may require a retainer.  Either way, these sales reps may already have relationships with the buyers and category managers of retail stores.  Their relationship with these buyers is important as they might be able to get further than you can by cold calling the stores yourself.

You can also be creative with getting the word out about your products.  Writing articles and publishing them on the internet through blogs, social networking and press release sites can be very effective and free.  Also, don’t forget about the power of videos.  Remember that Google now owns YouTube so videos very often appear in search engine results.  Anyone can make an informational video to promote products.  There are also many people who do product reviews on YouTube who have many devoted followers watching their channels.  Some of these product reviewers have a lot of credibility and many will be happy to try your product and discuss it on their channel.  They usually don’t charge for this but it will require you to send them some of your products to try.  This is a very small investment that can go a very long way.

Also, do your research and find out who the distributors are that sell products like yours to retail stores.  Some store owners don’t want to deal directly with manufacturers because it’s much easier for them to purchase their inventory from distributors.  If your products are sold by distributors, the volume of sales is generally much hirer because they most likely sell to many retail stores.

Pricing

When determining the price for your products, consider a 3 tier system.  First figure out what your cost is to manufacture the product, including packing, labeling and all other expenses.  Then you will have to mark the price up for distributors, retailers and consumers.  It’s customary to mark up the price about 30% when selling to distributors.  Distributors may want to make about a 50% margin between their price and the wholesale price.  Since retail stores bear the majority of the expenses (showroom space, employees, advertising, etc.) they usually want to make 100% margin between the wholesale and retail price.

Therefore, when determining the pricing structure for your products, consider your distributor price to be about 30% higher than your cost, the wholesale price should be about 50% higher than that and the retail price should be about 100% higher than the wholesale price.  This is not an exact science so be prepared to adjust the numbers until they make sense.

Warehousing, Fulfillment, Distribution

In the beginning, you can probably get away with keeping your products in a cool, dry place in your home.  When you get orders, you can ship them out using the post office or third party courier.  When things start to pick up or if you don’t have enough room in your house, there are warehouses that will store your products and process orders for you.  Outsourcing this function can be cost effective and free your time up to do other things like sales.  Just make sure you pay the warehouse on time because if you breach the agreement you have with them, they could take possession of your products and try to sell them in order to recover the money you owe them.

There is a lot to learn about this industry and launching a skin care brand is not an easy thing to do.  As mentioned above, there could be unforeseen complications that could occur depending on your niche and circumstances.  Nevertheless, the skin care industry is a multibillion dollar field that is growing worldwide.  You may have a product concept in mind that people will love but be overwhelmed with how to execute your idea.  The information in this article will help.   

For more information, call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.