Selling Your Own Cosmetics
Distributing and selling cosmetics that you have made on your own can be very rewarding fun and creative.
Often when you venture into this cosmetic area it does not stop at just making the product from scratch for your own use. So when you have taken some classes and are confident and satisfied with the product you may want to offer the products to family and friends as gifts; and then offer these to the wider public.
Many people have the idea of starting their own skin care range, but would like some guidelines on what is necessary for them to research before they invest in launching their own cosmetic skincare range. This article aims to answer some of the many questions that are often asked by many small cosmetic entrepreneurs. In starting up a small business in Australia we face many real challenges and there are a lot of things to think about. Below we have summarised some of the points we believe you’ll have to consider when you plan to create your own cosmetic business.
Remember that you dont have to do everything yourself. You can get help and guidance from professionals and consultants who can assist you in many varied areas; from creating formulae, help with contact manufacturing and filling, right to the marketing and distribution aspect of the business. There are graphic designers who can assist you with packaging design, and specialists that can assist you with regulatory questions (e.g. export compliant labelling). However, such services often come with a price attached.
FIRST and FOREMOST Do Your Research And Define Your Marketplace
We can’t stress enough that you will need to do your research. Research where and how you are going to sell the product so that the buyer can get your product range. There are many channels available from craft markets and eBay to specialist retail shops:- which one is right for you?
You should have a very clear understanding about which segment of the market you'd like to focus on. As the cosmetic market is lead by large, international companies selling mass products in all market segments you will most likely find success if you focus on just one type or group of customers to stay competitive.
Within this specific group, you can easily outdo the larger competitors by offering better products and better service. And remember: whilst the marketplace does not need more cosmetics, the consumers in the marketplace have an insatiable appetite for exciting, different, fresh NEW product concepts.
By the end of your research you should have a very clear understanding into what market niche your product will fit (e.g. "I want to sell natural, non-synthetic moisturising soap at an affordable price for outdoor working people with rough and dry hands.")
- Define Your Market Niche: Focus on a specific group of customers (e.g. garden loving, middle-aged men). Remember that one can always expand your business to new segments but it's a lot easier to start with just one group of customers in mind.
- Know Your Customer: Do your research and get to know your customer's habits, wishes, willingness to spend money, locations where they prefer to shop, colours and odours they might like best, etc.
Creating and Testing Formulas
There are a number of sources for formulations upon which you can base your product(s). There are a number of guide formulas posted on our website for various products which you are welcome to use and modify; or you can access other online formulation databases. At times formulators copy formulations based upon the ingredient lists of commercial products.
Sometimes it may be necessary that the formula you have obtained from other sources needs to be modified to suit your specific needs.
Creating your own formula is very satisfying even though it often requires a lot of experimentation, modification, and tweaking of various ingredient concentrations, and replacing ingredients with new ingredients. However, once your formula is finished you know you have created something truly unique.
- Create or Choose the Right Formulas: Before starting to formulate, make sure you consider the right form of the product (e.g. is a lotion or cream better for the container I have in mind?), and the kind of ingredients that fit your target customer (e.g. high-performance or more natural ingredients?)
- Test Your Formulas: Don't just test your formula on your own or your friend's skin expand your testing to larger groups. We strongly suggest that you also do your own stability tests! Stability testing is your best guarantee that the product will perform now and in the future; it will prevent you from marketing a product that is unstable over time, and thus ruining your company and reputation. Check out our stability testing article in a later blog.
Manufacturing Your Products
First off, always attempt for the best quality whether you plan to manufacture your products from scratch or modify prefabricated bases purchased from us or somebody else. Pay strict attention to stringent hygiene, a clean working space, and proper use and storage of ingredients.
Once your business moves past the kitchen bench-based production facility to a more professional set-up (maybe even with your own laboratory) you should follow the Cosmetic Good Manufacturing Practice Guidelines as required by the cosmetic industry.
- Manufacture at consistent quality: Set up quality rules and follow them strictly: buy only ingredients from trusted sources, use only distilled water (not tap water), store ingredients adequately, use only clean and disinfected tools and containers, wear disposable gloves and a face mask, keep a log book to record all your batch productions, reserve samples of every batch.
- Consider a contract manufacturer: If you can not or do not want to manufacture your products on your own consider consulting a contract manufacturer. This is especially the case if your business has grown to a size where you have to manufacture large quantities (drum sizes) as large scale production has its own challenges! We have access to, contract manufacturers that are able to make small quantities where most producers are only interested in quantities of 5000+.
Packaging, and Labelling
Packaging is your silent salesperson. Purchasing cosmetics is often an emotive purchase and choosing appropriate packaging is critical within the marketing plan; whether it responds to market needs or whether it creates new opportunities and new markets.
Research showed that over 50% of consumers bought a certain brand only because they initially were attracted to the packaging.
Our recommendation is: find your best compromise between a high-end luxury packaging and unprofessionally looking home-made packaging.
Don’t spend all efforts on a custom-designed container with silk-screen printed labelling, packed in a 4-colour printed carton box, and over-wrapped in cellophane. (Unless you are in a very exclusive market segment where you can recoup the exorbitant cost.) Remind yourself that cosmetic packaging needs to be functional, practical, and made of a good quality (no leaking, no strange odours, and certainly no breakages during transport).
- Finding Containers: Before buying a container in bulk quantities (typically in the thousands) buy first a few single containers of various sizes, designs and materials and decide only then which containers fits your needs best. Ideally to minimise cost you should try to purchase the packaging in carton lots which may be from 100 to 500 units although this will vary depending on the packaging size.
Before choosing packaging it is necessary to understand what your skincare creams, lotions and liquids are made of as this will impact on what material can be used. Often your contract manufacturer and/or formulator, can help you to choose the appropriate materials for jars and bottles and so you can avoid having to invest in the cost of researching compatibility tests on the packaging.
- Design Your Label: If you are familiar using drawing or photo editing programs and have a flair for good design, go ahead and design your own label. Unfortunately MS Word and MS Publisher documents are not used by industry and whilst they are acceptable to convey a idea they are not capable to convert it into a printers graphics file except a great added cost. If you are not trained we really suggest that you get help from a professional graphic designer to prepare your artwork so it looks professional.
- Confirm Labelling Regulations: cosmetic products have very strict labelling regulations which you have to follow. If your label doesn't meet all the requirements you can be fined and/or your products must be withdrawn from the market. Read more in our article about labelling requirements in the Australian market and its regulations
- Select Type of Label: Cosmetic containers are typically labelled in two ways, either by having the text printed directly onto the container (silk screen printing) or by using a printed label, stuck to the container.
The advantage of silk screen printing is that it looks very professional and you don't have to stick labels to the containers. However, there is usually a minimum quantity (1000's of containers) and another potential issue is once printed you can't change the text any-more. Silk screen printing is offered by most container manufacturers or by specialised printing companies.
There are many label printing companies who offer custom label printing at reasonable cost and with low minimum quantities which you can find on the internet and White Pages. If you want to print your own labels we recommend using a high-quality colour laser printer (don’t use bubble jet printers as the colours will run if the label gets wet and colours will fade on sun-exposure).
Register with Authorities:
Besides registering your business with local government; In Australia if you manufacture for commercial purposes cold processed or hot processed soap then you must register your business with NICNAS and pay a nominal annual fee. If you import raw ingredients for use in cosmetic manufacturing and formulation, again for commercial purposes, then you must also register your business with NICNAS and pay the annual registration fee. There could be some instances where you may be exempt from this. However, it is best that you research and read all the information provided by NICNAS .
You don't usually have to register your business or your cosmetic products with the Therapeutic Goods Administration (TGA).
However, if you plan to sell specific cosmetics that contain APIs (active pharmaceutical ingredients) defined by the TGA or produce products that make pharmaceutical claims such as sunscreens, disinfectant, acne preparation, and certain skin lightening preparations; head lice prevention actives and others, then you do need to register your business and your products with the TGA. See the TGA website for specific information to get more details. (for example sunscreens)