Getting Started in the Cosmetic Industry
By Stan Katz
Entering the Cosmetic Business is possible if you understand how it works and you establish clear goals.
The Cosmetic Business is divided up into several general areas:
- Color Cosmetics or Make up,
- Treatment or Skin Care,
- Fragrance and
- Health and Beauty Aids, or HBA ,a broad area that includes everything from shampoo to foot products.
These products can be produced for you by companies that specialize in one or several of these areas. If you want a line of products with your label on the package you have two potential directions:
Private Label and Contract Filler. If your quantities are really small, you might even want to consider making your own blends and filling your own bottles (see The Bottle Store for carton quantities of components ready for immediate delivery BottleStore.com). It all depends on what quantity of each product you want and how "custom" the products need to be. Generally, if the quantity is small and you are willing to accept the product types and packaging that already exists - your choice would be a Private Label house. The Private Label company maintains a ready supply of components and finished goods. By using different variations and combinations, and applying your custom labeling or decoration, you can usually find a satisfactory "custom" look.
Once your quantity requirements get larger (several thousand per item) a Contract Filler might be a better choice. You become responsible for providing the packaging components, labels, etc., and the Filler makes the formula and fills your components. What you get is a truly custom product from formula to packaging, but a lot more depends on you.
In both cases, selling products under your name makes you legally responsible for the product in all areas including labeling (regulated by the FDA) and product claims. And the FDA has determined that your claims include not only what you say on the label but what you say in any brochures or other advertising material. You will also be the first one contacted if a consumer experiences any adverse reactions to your product. This means you should educate yourself about such things as stability, shelf life, and Product Liability Insurance.
There are many resources available to you, some of them free. Check out Industry Resources and Trade Associations. ICMAD (Independent Cosmetic Manufacturers and Distributors) is the appropriate trade association for companies entering the industry. ICMAD can provide general guidance on regulations and government support and even has a Group Products Liability Policy for members.
For a great article on STARTING UP read this article from Beauty Packaging Magazine ( a great resource!) and learn from people who have already done it, as they share their secrets. http://www.beautypackaging.com/articles/2006/07/starting-up.php.
For some Reality Check Tips from a marketing pro, Karen young try: http://www.ygroup.com/RealityCheck.html
Private Label: Getting finished products made with your label in small quantities.
- Beauty Salons
- Single Stores
Quantities: a few pieces up to several hundred of each product
What you need: almost nothing but money and an idea of the types of products you want.
Advantages: gets you into the business fast without large startup or inventory costs
Disadvantages: you are limited to the shades, products, and packaging carried by the supplier.
|Imos-Wilson ||Finished products delivered in 7 days!|
|Columbia Cosmetics||Completed products ready to label|
|What else you will need: Product Liability Insurance|
|Suggested Vendors: ||Specialty|
|The Bottle Store||Carton quantities of Bottles & Closures for immediate delivery|
Contract Filling: Getting products made with your label in larger quantities.
- Chain Stores
- Companies that want to develop a single product or a single line of products for wide distribution
Quantities: usually 5000 pieces with the exception of shaded items which are usually 2000 pieces per shade.
What you need: packaging, artwork, displays and possibly consultants in marketing and product design.
Advantages: Custom made products from the ground up, and lower per piece cost.
Disadvantages: requires a large investment and support staff.
|Quality Cosmetics||Large runs, Treatment, HBA|
|Ariel Labs||Color Cosmetics, Treatment|
|What else you will need: Product Liability Insurance, component suppliers, label suppliers, warehouse and shipping, etc. |
|O Berk/CPG ||Bottles & Closures|
Alternative suggestions: If you don't have expertise in the Cosmetic Industry consider using consultants. Some can act as your marketing and product development staff. Some specialize in technical, formulation and regulatory issues. Some, called Full Service Development Companies can put together an entire line of products using their knowledge and experience, and will arrange for everything from formulation development to the final package.
|Agency for Full Marketing Services|
Special note on Fragrances: To produce a custom fragrance in small quantities is a difficult task. You must first work with one of the essential oil houses who will blend the ingredients according to your guidelines. Then you must locate a filler who will do the rest of the steps necessary to bring the essential oils into a finished product like a perfume, cologne, etc.
|Elias ||Essential Oils|
|O Berk/CPG ||Bottles & Closures|
Accessories & Displays: Accessories such as brushes, applicators, etc. as well as counter displays, tester displays, can be bought in both small and large quantities.