Live your eyeliner, breathe your lipstick, and kill for each other.
~ Lady Gaga
CREATING YOUR OWN PRODUCT LINE
by Paul Paris
Have you always dreamed of starting your own cosmetic line? Perhaps you have identified a gap in the market which you would like to fill? Maybe you struggle to get your hands on suitable products for your particular niche and have decided to make the ideal product for people struggling with similar problems to you? Whatever the motivation for embarking on this journey to cosmetic product bliss, it’s important to do some vital research. You want to make sure your eyes are wide open to all of the pros and cons associated with starting this particular type of business.
5 questions to Answer before you start
1| Will People Buy It?
The first question you need to ask is if there are people out there who are willing to pay for your proposed product. If you aren’t sure, your first expense is going to be hiring a market research company to find out for you. How is your proposed product line going to be different to your direct competition? How do you plan to grab attention with your offering? You don’t want to spend a fortune on product development that is going to sit on a shelf losing you money. You must spend time truly investigating similar lines on the market and do an audit of what you think is working for them and what is not. Use what you have learned to enhance packaging, marketing content, and product design.
2| Are you an expert?
A core question to business success is asking yourself if you have enough knowledge of the industry. If there are gaps in your expertise, ensure that you take the necessary classes or seek mentorship with industry leaders before you start your business.
3| Are you ready for sleepless nights?
I’ve been out on the frontlines of Lash Affair for the past five years. There have been headaches, heartaches, sleepless nights, and almost going broke quite a few times - but we made it through. It’s much easier to align with a brand that you love and who loves you back than suffer the nightmares of driving into a saturated market without all the facts and support needed.
4| Do you have the money?
An essential question is whether you have enough capital to start your venture. Without adequate financial resources, you might go under before you even get started. Make sure you know the real costs you will need to outlay and sustain your product line. When we began Lash Affair, we needed a lot of funds to get started. We used this initial investment for inventory, marketing, branding, trade shows, our website, graphic design, and more. For the first few years, we didn’t even draw salaries to ensure that the company would not only survive, but that it thrived. Many startup entrepreneurs live off savings, work side jobs, or borrow money from their families to get their dreams off the ground.
5| Do you have what it takes?
You are going to need patience, drive, discipline and a huge amount of good luck! If you do think you have what it takes, then read on for the pros and cons of private labeling and the pitfalls to watch out for.
Pros and Cons of private labeling
Let’s take a look at some of the pros and cons of using a private label for your cosmetics company which allows you to brand and market a product that has already been pre-tested and pre-manufactured. You create your own ‘brand’ identity for the product and do not have to spend an extraordinary amount of money on product development and testing. We call this process, contract manufacturing, where that company will make your product according to your formula or specifications and package it on your behalf.
- You can grow your cosmetic line at any point without needing the skills to make the product yourself.
- Start up costs are lower.
- There is less risk involved when using a tried and tested product; the quality of the product is usually already of a high standard.
- Your margins are higher over retailing an existing brand. Ex. Private labeling Sally's Lash Lounge Foam Cleanser vs. Buying a Wholesale Branded Lash Cleanser.
- You have complete control over your inventory.
- The private label company you are using might have specific minimum requirements which means large outlays of cash.
- You will need to spend lots of time researching the ideal manufacturer that will fit your budget.
- You receive no marketing assistance or selling aids from the private label company.
- Your product might end up having the same appearance and specifications as other products in your market.
- Some private label products are low quality, made to go for the lowest price. This risk is why doing your homework is so important.
- Products that are private labeled may not be innovative products; they just attempt to match existing products on the market.
- Lengthy lead times when reordering.
Dangers to Avoid
- Most don't realize that self-bottling product like a homemade lash cleanser for resale is illegal and is putting you at risk for lawsuits and negligence if anything happens to the person while using your home-brew product.
- Possible scams when sending money to companies overseas that you have never met or done business with in the past.
- Little to no leverage when dealing with these manufacturers for missing orders, damaged shipments, or customs seizures.
You could choose the route of developing and custom manufacturing your own unique formula. It’s your product; you own the formula. Once you develop the perfect product, the cost per unit can be much cheaper than the private label option. However, the issue is with the initial start up costs which can be astronomical. You might have to pay for over 5,000+ pieces from the manufacturer at a time, which can be extremely costly. The lead times for product development can take up to 3 months and then at least 4-6 weeks for the production time. Do you have the financial resources to wait four months for a finished product? If there are any delays, you are looking at further expenditure and additional expenses.
Together is Better
One of the most successful ways to grow your business is through actively forming relationships with established brands and influencers within your industry. As Simon Sinek says, “Together is Better.” Some people choose to ignore the benefits of aligning with existing brands because they wish to start their own line and in the process miss out on a wealth of opportunities.
Aligning with existing companies is an incredible way to make the same money you would expect from your line without any of the headaches of creating, managing and growing your brand. Actively making partnerships and coalitions in the cosmetic industry is a massive strength and is an excellent way to expand your business. We all need each other to grow. When you join forces with an honest, reputable brand, you can sidestep some of the harsh realities associated with launching your company from scratch.
If you choose to be a Brand Ambassador for an existing brand you could open up doors for yourself and receive benefits including being the first to look at new products, being on the VIP list of their corporate events, special storewide discounts as well as the opportunity for referral commissions. Something to think about, right?
Manny Mua recently became the first Male Brand Ambassador for Maybelline Cosmetics
If you opt for a wholesale account with an existing brand, you could purchase product anywhere from 30%-60% off retail. Having wholesale accounts pave the way for you to make a hefty profit without any of the risk, overhead, or financial burden. In these cases, the more you order every month, the more of a discount you will receive. If you're interested in these types of opportunities with Lash Affair®, you can review them here.
If you need advice about how to go about aligning with branded products or the ins and outs of starting your own line, please reach out to me so I can share with you what I’ve learned so far.
COO | Zoe’s Treat Dispenser | CrossFit Athlete | Spreadsheet Nerd | Traveler