The cosmetics industry is booming; more and more people are becoming not just consumers, but are also getting into the business of production and selling. The private label cosmetics industry is one such entity that has been witnessing significant growth. And for those looking to foray into this segment will find this article very informative and helpful. They can use it as a guide towards building a successful business in this particular field.
What are private label cosmetics?
Private label cosmetics are those beauty products that are produced by manufacturers who are experts in this industry. They provide products that are specially curated, labeled and manufactured as per the client’s directives. These products are highly customized and follow strict protocol while they are in the production process.
In other words, private label cosmetics are goods manufactured by one company which are sold by another company under their brand name. So essentially it is a business to business exchange.
Anyone looking to create or produce a range of cosmetics and establish a business in this industry can opt for a private label cosmetics manufacturer. They provide private label products such as lipsticks, shampoos, lotions, etc. which will be under the client’s brand name. Clients can choose the shade, shape, size and so on from the supplier’s library and place their order. The supplier/manufacturer will work out the production, labeling and deliver the finished personalized product (s).
Private label cosmetics companies operate in a very streamlined manner. They maintain a ready supply of finished goods and the components that they consist of. Customization is a key element. These companies maintain the best standards in creating products which are varied and customized as per clients’ requirements. Engaging the services of private label cosmetics manufacturers is lucrative in several ways which can be read in the next segment.
Who can be part of the private label cosmetics industry?
- Beauty Salons
- Single Stores
Apart from the above participants, individuals with vested interests can also be a part of this business.
Companies that are in the business of supplying private label cosmetics
There are specifically two types of cosmetics which are made by private label manufacturers which are:
- Luxury Private label cosmetics
- Private label organic cosmetics
Top 10 private label cosmetic companies
To get a clearer picture, a list of Ten Top Companies that are currently operating in this business of creating private label cosmetics can be drawn up for reader information:
1. Lady Burd
Lady Burd Cosmetics houses a state-of-the-art lab with the latest machinery and equipment for manufacturing all kinds of premium luxury private label cosmetics. Spread over a spacious area of 60,000sq.ft. They offer an extensive range of cosmetics that one can choose from. With expert chemists on board, Lady Burd is a one-stop shop for those looking to buy luxury-end private label cosmetics.
The color division of Brushes by Karen, ColorStrokes is a strong player in this segment. All their products are made up of vegan and gluten-free ingredients and materials. High on quality and performance, ColorStrokes promises a wide range that is ethical and great to use.
With low minimums, Mineral Mine, Inc. offers high-value branding through private labeling. Their plethora of impeccable products promises cosmetics that are perfect for private label cosmetics buyers. With ingredients such as lavender extract, and sources of vitamin A, D, and E, their products are organic yet modern.
In the business for over 30 years, Diamond cosmetics have been providing quality private label products to their portfolio of clients. In a recent development, they have also expanded their business by increasing their product line.
5. Visage Pro
Backed by years of R&D, Visage Pro has developed a range of products that are high on performance and luxury. Customers can choose from semi-custom or full custom formation when they choose their products for private labeling.
They are engaged in skin care, hair care, body care and a host of other products. Their product library consists of more than 5000 products. They also customize in terms of product formula and are open to new formulations upon client directives.
Frontrunners of private label cosmetics manufacturing in the Middle East, L’Origine offers product design to ready-to-market services. They are very customer-centric, ensuring efficient delivery at an uncompromised quality.
B4U has a wide range of products that are of their brand and private labeling as well. From certified organic to luxurious beauty essentials made up of minerals from the Dead Sea. B4U has it all.
Based out of Nuenberg in Germany, they are a private-label manufacturer for color cosmetics. Their client list includes quite a few internationally renowned cosmetic brands. Gutberlet makes products which are highly innovative in terms of packaging and handling and are of the best quality.
This company has been creating cosmetics for their clients worldwide for more than 30 years. They lay great emphasis on meeting client demands as well as their expectations.
Tips before buying private label cosmetics
Before buying private label cosmetics, there are a few things that need to be looked at:
1. Decide the product line
Those wanting to purchase products from private label manufacturers must first determine the type of product (s) that they want to sell in the market. Once that is sorted out, they can get in touch with the manufacturer with a specific set of order (s).
Carry out a detailed analysis of the product that will generate profits; that which people will buy. Study the products that are trending and in demand. It is always wise to choose products that have high consumption with fewer competitors around.
3. Additional costs involved
Prior to purchase confirmation, always ask the manufacturer if there are any extra costs that are attached to the products. Products might incur additional charges like packaging fees, shipping charges, import-export fees, etc.
Since private label products are bought in bulk, it makes sense to ask for samples first. This way, the buyer can review the product and make sure that he is buying the right one that meets his requirements perfectly.
Decide on the brand name, logo and how the packaging needs to look like. This is essential to create a product under a brand that is attractive for customers to purchase.
6. Storage and packing facility
The products upon arrival will require space to store them. Work out the storage facilities beforehand and ensure that specifics like:
- The room temperature is set as per the specification of the product to prolong its shelf life.
- If the mode of selling is online, packaging space is vital so that products are readied and packed before they are shipped to the customers.
Big retailers usually have their storage and packing facilities. However, for small-time business owners, finding storage can be problematic. In such cases, they can outsource their storage and handling needs to private storage providers.
7. Agreement/ Contract
Before signing on the dotted line, review every element on the purchase agreement. Make sure all terms are transparent, and there are no hidden conditions. Note that:
- The prices that were quoted at the beginning are the same
- The date and delivery time is mentioned in the contract
- Additional costs, if any, should be stated in the agreement
8. Price comparison
Since there is a gamut of private label products and manufacturers, it is only logical to do a price analysis. Before zeroing in on the final manufacturer, do a study on the prices of the product as offered by different manufacturers. Approach different manufacturers and inquire about their quotations, shipping charges, minimum order, etc.
9. Point of sale
It is imperative to have a clear idea about where the products have to be placed. This is valid particularly for people who are stepping into the business of buying private label cosmetics for the first time. They must decide the medium through which they want to market and sell the products under their brand name.
10. Insurance against products
Since cosmetics are of a fragile nature, during delivery, they might be exposed to breakage or damage. To avoid such problems, taking out liability insurance against them will reduce the burden of loss suffered due to damage.
11. Reliable manufacturer/supplier
With so many private label cosmetic manufacturers and suppliers around, it gets confusing about whom to opt for. To sort this out, buyers should focus on the manufacturer that specializes in the product that they want to market under their brand name. Seeking previous client testimonials also assists in deciding the best supplier.
Why choose private label cosmetics?
- There are absolutely no production costs as they are all borne by the manufacturer.
- Faster production: With modern machinery and technology, private label manufacturers can dole out products at an efficient rate.
- Customized products: Buyers have the facility to give customized orders as per their requirements. This greatly aids in giving exclusivity to the products that are to be sold under a brand name.
- Zero product development costs: Customers buy only the finished and ready goods. They are not involved with any stage of production since that is already taken care of by the private label manufacturers.
- Ease of choosing the right product as the manufacturer already has an existing repertoire of goods. And that makes it easier for the client to choose without much hassle.
- It is time-saving. The manufacturers are very quick and efficient with their delivery. That way the client saves a lot of time and can introduce the product faster in the market.
- Quality products: Proper research and development go into each product before they go through production. Also, the latest technology and safest techniques are used while manufacturing. This ensures top-notch quality products that buyers can have access to.
- Profitable: Although it involves considerable costs to hire a manufacturer, private label cosmetics have considerably higher profit margins at the time of selling. For one, the price at which they are bought from the manufacturer is at a wholesale rate. Second, such products are cheaper to make. That way when they are being sold through an already established name, the selling price can be adjusted.
- Product differentiation: The private label cosmetics are customized as per client preferences. This way, buyers can structure them in such a way that is different from their competitors.
- Brand creation: Buying private label cosmetics gives one the opportunity to create and own their brand. A business entity is created, giving them a clear identity in the market.
Are there any risks involved?
Business is seldom risk-free. Similarly, buying private label cosmetics also comes with its share of risks and hazards.
1. Quality might be compromised
There is always the risk that the products might not be of top-notch quality. This, in turn, may potentially harm the brand’s image and credibility. However, when bought from reliable and trusted private label cosmetic manufactures, this factor is largely negated.
2. Legal issues
The private label cosmetics once bought from the manufacturer come under the sole proprietorship of the brand. This might expose the brand to certain legalities like FDA certification issues, trademark and copyright infringement cases, etc. And if the products are below the quality as against the price paid by customers, they might file a case in the consumer court.
3. Contract/agreement infringement
There is also the added risk of manufacturers not carrying out their part of the purchase agreement. Delays in delivery, business shutting down, and inferior goods are some of the unfilled promises that the client may encounter. Such discrepancies will definitely affect the client’s business.
Evidently, there are several factors to consider before getting into the business of private label cosmetics. However, with the right amount of strategy and active research, it can turn out to be lucrative and profitable down the line.