Start Your Own Cosmetic Line

To some, this may seem like a dream that is out of reach.  However, crazier things have been accomplished and with the right direction, it is a very obtainable goal.  The cosmetic and beauty industry is extremely lucrative, as some people will spare no expense to make themselves look good and feel better about themselves. Unlike certain skin care and medical products, cosmetic and beauty products don’t require the same regulatory compliance in accordance with FDA standards.  In this article, I’ll cover some of the beginning steps in starting this type of business and launching your own product line.

Things you’ll need: A company, niche, website, private label manufacturer, packaging, labeling, marketing plan, distribution, etc.

Company

Once you have a name for your company, legitimize it by filing for a corporation.  A lawyer can do this for you.  Ask the lawyer about the benefits of registering it as a corporation or limited liability company.  You can also use LegalZoom as a more cost effective way to get this done.  Once your lawyer or LegalZoom files your company name, no one else can use it.  It’s yours.  You’ll get a federal tax identification number and its official.

Niche

Competing in the cosmetic industry is overwhelming.  You’ll need a niche to help you stand out among the rest.  What will make your product line different from all the rest?  This niche will define your brand’s image and be the selling point behind your products.  This will give consumers a reason to by your product, rather than all of the other products on the shelf.  It must be original, appealing and practical.  Whatever your niche is, it will be the driving force behind your entire operation.  Be unique and do your research on this one.  It’s important.

Website

Every company needs a website these days.  In the beginning, it might be easier for you to sell your products online than in stores.  Developing an ecommerce-capable website is expensive so definitely consider this when figuring your startup budget.  Your website must look professional in order for customers to feel comfortable giving up their credit card information.  Your website’s appearance will give credibility to your entire company.  Online, people do judge books by their covers.

Private Label Manufacturer

Once you have a concept for your cosmetic line, someone has to make the product.  Unless you’re a chemist, you may want to consider outsourcing this function.  There are plenty of private label laboratories that will make your products to your specifications.  Once you discuss with them the type of product you want made, they will send you a prototype for your approval.  Make sure you can work with the lab’s minimum order quantities.  MOQs may be as low as 1000 pieces or as many as 10,000 pieces.  Call several labs and compare prices.  This will take some work.

Packaging & Labeling

As with your website, packaging and labeling must be visually esthetic.  However, the cost of your product will increase if your packaging is overly elaborate.  If your goal is to have a high-end line of cosmetic products, some consumers may be willing to pay a higher price for it but remember that all consumers are price conscious. 

There are manufacturers that only make packaging for cosmetic products.  You can either have packaging custom made (which is significantly more expensive) or you can go with a premade package design.  In this case, you may run the risk of another brand using the same type of packaging which may or may not be an issue.

You will need to hire a graphic designer to create the labels for your packaging.  Labels can be printed and then applied onto packaging or silkscreened directly onto the package. 

Make sure you don’t make any medical claims in the content of your labels or you may run the risk of FDA opposition.  It might be a good idea to hire an FDA lawyer to review your labeling prior to applying it to your packaging.  If your labeling is not FDA compliant, they could force you to change it.  This could get expensive if you’ve already printed and applied thousands of labels.  Even though cosmetic products are normally exempt from FDA registration, if your label content crosses the line and makes a medical claim that the FDA deems unauthorized, they will get involved and require you to make some changes.

Marketing Plan

You’ve started your company, you have a website and a product.  Now how are you going to generate revenue?  Letting the world know about your products is difficult because the world is a big place.  You’ve already spent the money on your website so you might as well start there.  Launching a search engine optimization campaign can get you on the map.  Once you start getting some online sales, this could breathe some life into your marketing budget and allow you to try some other things.

You can try calling some retailers yourself to see if they would be interested in selling your line.  While it may be tempting to start off with some of the larger big-box retailers, you might not be ready for them.  For example, if a national retailer wants to place your products in all of their stores, they may ask to buy an amount that is higher than you can afford to produce.  This will be embarrassing and you may not get a second chance at opportunities like that if you can’t produce the first time around.

Consider developing relationships with distributors.  These are companies that have relationships with many smaller retailers across the country.  If you can land a few distributor accounts, you can get some recurring orders that will keep money coming in while you build your business.

There are also independent sales representatives that already have relationships with buyers who may be interested in taking on your line.  Most of these sales reps work on a commission-only basis so the only thing that will be required is that you provide them with some samples to present to potential buyers.

Also, don’t underestimate the power of social media.  Create accounts for your business on Facebook, twitter, LinkedIn, Pinterest, etc.  Videos are also a great way to get the word out about your products.  You can make videos yourself or connect with people who have YouTube channels that review cosmetic products.  Some of them may be willing to do a review of your products which will only cost you the samples you send to them.

Distribution

In the beginning, you can store your products in a cool, dry place in your house.  When you get orders, ship them out.  The U.S. Post Office has flat rate boxes that are very cost effective for shipping larger orders.  Even for small individual size orders, the post office seems to be more cost effective than UPS, FedEx and DHL.  Once your operation gets larger, you can look into using third party fulfillment warehouses who can handle the distribution for you.

For more information about getting a cosmetic business started and off the ground, call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.  Our consultants are available to help you every step of the way from starting your business to growing it into a success.