How To Choose a Private Label Cosmetics Company
In today's market, the idea of private label brands is becoming more and more prevalent. In fact, experts predict that the beauty industry will continue growing within the global skincare products market at a rate of 4.69% for the next several years.
That means any upcoming business that wants to get involved with creating private label products— particularly skincare products and cosmetics— will have a good chance of establishing a successful company in the world of private labelling.
But how do you choose a private label cosmetics company, and does it entail exactly? Read on to find out more information on what private labels are, and how to choose a business by finding a niche, the right manufacturers, good branding and marketing strategies, and much more.
What Are Private Label Cosmetics?
In essence, private label cosmetics companies create unique formulas for skincare and beauty products.
However, if your cosmetic company doesn't have the manufacturing capacities to actually make and develop its own products, your company needs to outsource to a private label manufacturer to create the actual item through idea collaboration and sharing your company vision.
From there, the private label cosmetic product belongs to your company's brand— you control the packaging, branding, and ingredient formulation. Then, you can choose how to market your private label products, where to sell them, and how they get distributed.
How To Choose a Private Label Cosmetics Company in 10 Steps
Choosing a range of private label skincare products and launching a company out of it requires huge passion and a drive for success— but it's a great decision for many entrepreneurs and business owners alike.
And while the most enjoyable parts can be coming up with a great company name, designing a website theme, and dreaming up a unique and memorable logo, the process of starting a business in private label cosmetics is quite complex.
However, to keep you from feeling intimidated by the idea, we have compiled a list of 10 steps to take that will make choosing a private label cosmetics company much easier and, hopefully, less stressful! So, read on for all you need to know to get started.
1. Do Your Research on Private Label Products
The first step for anyone creating private label cosmetics companies involves doing some groundwork. Though the cosmetics industry can be quite lucrative and many shoppers view skincare products as essentials, it's still a difficult sector for some to break into, given the amount of product saturation on the market.
Don't let this deter you from a dream of creating private label cosmetics, however— just do your research before diving in headfirst!
For example, it's important to figure out a starting budget that will help guide business decisions wisely. Private label cosmetics is a niche that requires startup fees, but if you run your company right and choose the right products to create, it's still profitable.
Next, check out some other private label cosmetics companies that you admire and analyse their business models, target audience, and marketing techniques. While you cannot copy any other skincare businesses, you can certainly learn from their successes to avoid failures in your own brand!
2. Find a Gap in the Beauty Industry for Your Own Beauty Products
Now that you are prepared with some basic information about what you can afford and what models you would like to use as inspiration, it's time to find where you fit into the industry as a whole.
As a private label company, you don't want to drop an extensive range of products that already exist in excessive amounts in stores everywhere— that won't give your brand the best chance possible.
Search for a gap or niche where you can offer new kinds of quality skincare products to a target audience that is hungry for more. Some of the hottest industry areas right now are:
- A range of ethnically-diverse cosmetic pigments.
- Eco-friendly packaging and "green" cosmetics.
- Masculine grooming tools.
- Organic products.
- Vegan and cruelty-free.
Instead of offering a large range of lower quality products, focus on the areas where your expertise and private label cosmetics could make the biggest impact in the world of beauty and skincare.
3. Brainstorm Profitable Cosmetic Products Within Your Niche
For anyone who wants to run their own skincare business, part of the fun is figuring out where your passions lie within the wider industry, but the next step is determining which are profitable.
While you may want to break into a niche of masculine grooming tools, which could include hair accessories, toiletry bags, or even cosmetic brushes, the industry might not be initially profitable for a branded line of those products. And if you are just starting out, that profitability is where you need to focus for the time being.
For instance, organic ingredients and organic cosmetics continue to be twin booming market sectors, so why not branch into things like natural blush, eyeliner, or highlighter powder available in sustainable packaging?
A great way to figure out what cosmetic products are profitable is by searching Google Trends and keeping an eye on statistics from within the global cosmetics industry.
4. Find Private Label Cosmetic Manufacturers
For private label product companies, finding the right manufacturers is a key part of the business model. A good manufacturing practice will not only leave you with quality products for less, but also use the best ingredients to create your line.
Plus, with the private label manufacturing process, you retain full ownership over the formula and specifics of your products, meaning that no competition is necessary with other businesses. It's a safe, profitable, and easy way to achieve your beauty product dreams!
But how do you find the best private label manufacturer for your company? Here are some aspects to consider when looking for the ideal service.
- Customization— The best manufacturer will be able to help you design your own custom product, based on feedback from initial customers and your preferences.
- Minimum Order Quantity— Instead of locking yourself into a contract that produces more product than you can possibly sell in the beginning, opt for a manufacturer with low minimums that scale with your success rate.
- Turnaround Time— The speed of producing and restocking your products can sometimes make or break the loyalty of your customers, so it's important to choose a manufacturer that has a proven track record of good turnaround times.
5. Request Samples and Review Your Skincare Products
Once you find the perfect cosmetic manufacturers for your company, it's a good idea to try out the products for yourself.
That way, you understand the quality, scent profile, and marketability of the product before selling it. Additionally, by testing out small batches of your items, you can make sure you actually like the products before ordering a large amount!
Try to assess your products from an outside and objective perspective— think about them like a beauty therapist or a sales marketer might, in terms of quality expectations, price point, and overall composition.
If you are satisfied with the output, try releasing a small number of samples to a focus group for further reviews, ahead of rolling out the entire private label cosmetics line.
6. Ensure Your Private Label Adheres to Regulations
One major consideration for a private label cosmetics business is to ensure all government regulations and legal requirements are satisfied when it comes to the ingredients, medicinal components, and pharmaceutical grade aspects of your own products, depending on what is required.
Additionally, you need to think about expiration dates, product stability, shelf life, and any quality standards that your skincare line needs to pass. Though these considerations are much less enjoyable than brainstorming your product range and experimenting with scents, it's an absolutely crucial step in the selling process.
Don't forget to investigate country-specific regulations as well, if you plan to export your products to other areas of the world that may have different requirements. It's better to be safe than sorry!
7. Design Your Cosmetics Line Aesthetics
Undoubtedly, part of the fun of running your private label is all the options for designing your own branded line's appearance and aesthetic
And when it comes to product packaging, the choices are virtually endless! Because the packaging is often the first glimpse that potential customers get of your product line, you should select something that grabs the eye and draws attention.
This is particularly important when your own brand appears in an online search— they need to stand out among all the others available!
That includes the product container itself, a variety of label options, and the full packaging set. Take inspiration from other trends in the industry for private label cosmetic product packaging, such as:
- Black and white colour palette.
- Floral and leaf patterns.
- Monochrome and minimalist aesthetics.
- Retro-inspired looks.
8. Determine How You Will Sell Your Private Label Cosmetic Products
The way you sell your product range is another important consideration. There are many options for selling private label cosmetics, from a booth at an industry trade show to stocking them on Amazon Marketplace.
But let's concentrate on some of the most popular— and easy to manage— ways to sell your product line, including:
By making an arrangement to sell in physical stores, you can access pre-existing customer bases at venues like organic grocery stores, health spas, hair salons, and boutiques.
Community events and markets are a great starting point for many private label cosmetics brands, as these venues attract buyers who are looking for unique products to purchase.
It's simpler than ever to set up an online store these days, and by putting some effort into creating an attractive and easy to navigate website, you can begin marketing your products quickly.
9. Select a Fulfilment Strategy
Depending on the purchase path you set up for your private label cosmetics, the next step is getting product fulfilment so that customers can actually get their hands on your brand.
But here, too, there are several different options for fulfilment strategies, which should be considered based on whether your company is primarily involved in online or store sales, and what future affordable products you want to offer. As such, some of the most reliable means for product fulfilment include the following.
This option entails leaving all product fulfilment and delivery considerations to the supplier that manufactures your goods.
If you have a physical storefront, you need the room to be able to complete the packing and shipment of your goods during in-house fulfilment.
One of the most popular methods for fulfilment strategy, outsourcing to a third-party logistics company that handles storage, packing, and shipping leaves you free to plan and run your business, uninterrupted.
10. Market Your Private Label Cosmetics Company Well
Marketing is undoubtedly one of the most important aspects of creating a private label company that is profitable and popular. Without being able to market your business and your own brand, how will consumers know it's an option for them to purchase?
Social media platforms, word of mouth, and even celebrity endorsements are all important to good marketing. Don't be shy— hype up your private label products with video content or live demonstrations at venue shows. It's important to put your brand out there and draw as much attention as possible!
Though it might seem like a difficult industry to break into, owning your own cosmetics line through private label manufacturing is one of the best ways to be a part of the skincare industry.
And as market trends are projected to keep growing ever higher in the beauty and makeup sector, the time could be right for you to dive into private labelling yourself.If so, why not explore the Australian Private Label— a company that delivers on quality manufacturing and full services for your skincare business, helping turn beautiful dreams into a reality.