Have you ever wanted to start your own personal care product line but was unclear how to get started? Have you heard of the term “private label” but you are not sure what it means? This article will guide you through the ins and outs of the private label cosmetics business model and the advantages of selling your personally branded products.
What are Private Label Cosmetics?
Private label cosmetics are skincare, hair care, make-up and bath and body products that are manufactured or packaged for sale under the name of a retailer instead of that of the manufacturer. Another term for private label is “white label” and merchants will put their own branding on the packaging.
Private Label Cosmetics vs. Wholesale Cosmetics – What’s the Difference?
Wholesale cosmetics come from a company that has branded their own product. They develop, market and sell their products to retailers who then re-sell the products to their own customers at a marked-up price. Many wholesalers have a minimum opening order that can be thousands of dollars and they may choose the opening order products for you. Most will have a set price that the retailer must charge for the product to keep the marketplace “fair”. It is usually a 100% markup meaning if you paid $10 for a product, they want you to sell it for $20. Some companies also require that you purchase a certain dollar amount per year and may restrict where you can sell your product (example: storefront versus online).
Private label cosmetics are sold through companies that manufacture the product but they do not brand, market or sell it under their own name. Instead, they work with retailers who would like their own line of personal care items without having to pay chemists, laboratories and manufacturing facilities to develop and make formulations or source and print their own packages, labels and boxes. These companies have pre-made products that the retailer can sample and usually add an ingredient or fragrance to the product. The private label company will also have a variety of packaging options available and will print or source labels and boxes for their customers. Because of all the different services and products offered, they can be one-stop shops for developing unique lines of skincare, hair care, make-up and bath and body products.
Why Start a Private Label Cosmetics Business?
There are many advantages to the private label business model, particularly for the retailers selling the products. The notable differences to utilizing a private label cosmetic company compared to other business models include:
Branding your own white label cosmetics offers higher profit margins compared to resale products. That is because the cost of making the product is usually lower and the manufacturer is not having to pay for retail store fronts or large marketing campaigns. The retailer may also have more say in the actual production of the product and therefore has some control over the ultimate price of the finished product. And the lower the cost of the product to the retailer, the higher the profits will be. The retailer also has complete control over the mark up of the product they are branding. Most retailers mark up their private label products at least 200%.
A loyal customer makes a successful business! When you private label, you continue to build customer loyalty with people who already like your services and products. Customers become attached to your brand and that can make them feel like they own an exclusive product not readily available to the general public. Furthermore, it is impossible for them to buy your products from other marketplaces such as competing spas or online sellers.
The private label business model allows you, the retailer to create a unique image that is associated with your company. You can tailor packaging and labels with your company name, logo, colors and contact information creating a distinctive line that showcases the philosophy of your company.
Another income opportunity is that a retailer can then become the wholesaler of their own brand. You can offer controlled access to your line of products to other retailers who want to sell quality products with high exclusivity. This will create a wider audience for you to distribute your goods and create a higher level of brand recognition while still controlling the distribution of your product.
Start Small, Grow Big
You don’t have to know how to manufacture beauty products or even how to get labels printed or boxes made when you work with a full-service private label company. This makes it very accessible to launch a product line using the private label business model. It is also easy to start with a few products and grow your line as your business grows. And if you choose a company with low Minimum Order Quantities (MOQ) such as 12 pieces, it’s easy to start small and ramp up your business.
Luxury Private Label Cosmetics and Your Brand
Your brand has a unique personality and marketplace niche and with the flexibility of private labeling, you can cater to the specific wants and needs of your target audience. Whether you own a luxury spa or hair salon, a retail storefront or you are an online seller, there are products that will fit your profile and price range.
When the manufacturer has a large selection of personal care products, it allows the retailer to choose the ones that fit their branding style. From organic botanical-based products to ones containing advanced active ingredients or especially designed for men, being able to choose products that fit your branding philosophy and target audience is key.
From a 0.5 ounce sample size to a 5 gallon container to replenish your back bar, private label companies have a myriad of packages, label printing choices and options to box or bag your product. For online sellers, bar code application can be an add-on service so that product can go directly from the manufacturing facility to an online marketplace distribution center.
Identifying the needs of your specific brand is the first critical step to finding a private label manufacturer that is a good match. Here are some things to consider when launching a new line.
Starting a Private Label Cosmetics Business
Step 1 – Finding a Private Label Cosmetics Company
Offerings of Top Private Label Cosmetics Companies
These are experts that will walk you through the private labelling process. They will be able to consult you on the product, packaging, label printing and shipping. This person will coordinate your entire project from start to finish to ensure a timely and accurate delivery of your finished product.
A Variety of Products
This ensures your specific brand philosophy will be represented and that your target audience’s needs and wants will be exceeded.
Packaging and Printing
Whether you prefer recyclable plastic, glass, boxes or specialty labels, the company you choose should be able to provide guidance, graphic design and quality outcomes for your packaging needs.
You have deadlines to meet, inventory to maintain and quality to assure – and a top private label company will be there to help. Picking up the phone when you call, returning emails within hours, not days and filling orders in a timely manner should be the norm.
Attention to Detail
From label application to box assembly to ensuring freshly made product, your private label company should worry about the details from the inside of the jar to the outside of the package – so you don’t have to!
Step 2 – Selecting Products for Your Private Label Cosmetics Product Line
A Focus on Ingredients:
Private Label Natural Cosmetics
Beauty begins with Mother Nature and botanical based skincare and hair care is a natural way to deliver results-oriented products. Search for plant extracts on the label and make sure that the first few ingredients on the list are not petrochemical derivatives.
Private Label Vegan Cosmetics
Ingredients like lanolin, tallow, carmine and collagen are animal by-products. They can be replaced with plant based ingredients that will have the same function, have less impact on the environment and will most likely be less comedogenic.
Cruelty Free Private Label Cosmetics
The Leaping Bunny logo is an easy to see indicator that a product has not been tested on animals. If the private label products are cruelty free, you will be able to indicate this on your own packaging. And remember just because a product is cruelty free does not mean it is vegan – and vice versa. If you are interested in both of these product features, make sure to inquire about each of them.
Private Label Organic Cosmetics
The use of organically grown botanical ingredients is on the rise. To make sure your labels and marketing materials accurately reflect the contents of the jar, ask if the ingredients are certified organic or not and if the level of organic ingredients is high enough to label the entire product as organic or certified organic. Also remember that some ingredients like shea butter may not be certified organic because the nuts are actually grown on wild trees as opposed to being farmed. So even though the nuts meet the requirements of an organic ingredient, they just cannot be labeled as such.
Step 3 – Contracting a Private Label Cosmetics Company
Identifying Your Needs
Minimum Order Quantities (MOQs)
Most companies start small and increase their orders as their business grows. Ask what the minimum order quantities are to make sure it is a match with your business plan. Be sure to inquire not only about product minimums but if there are different label or packaging minimums.
If you need labels and boxes and you have not currently identified a graphic designer, ask if the private label company provides this service. It will help streamline the development process as an in-house graphic designer will be familiar with template sizes for specific packaging and any kind of specific requirements or limitations.
If you are an Amazon seller, finding a private label cosmetic company that can ship directly to an Amazon fulfillment center can reduce shipping costs, processing times and handling.
When you identify your target customers you identify your price point. It is then possible to seek out products with a wholesale cost that will allow for an appropriate retail price point with a generous profit margin.
If you desire a unique fragrance or ingredient profile for your products, ask if the company will work with you to develop a formula that will help to create your distinctive brand.
Step 4 – Designing Your Private Label Cosmetics
To ensure branding consistency, make sure that the company offers products with an ingredient profile product that reflects your branding personality. Whether your branding style is “organic hippie”, “hip” or “high end” – it is imperative that you find products with ingredients that each of these consumer groups desire. A Project Consultant at the private label company will help you navigate their offerings to ensure a great match.
Signature scents or special active ingredients are ways to make a distinctive product line. Find out if the company is able to develop a unique product for you and the cost and timeline associated with its development.
The packaging can have a profound impact on the sale of your product. There are many considerations before choosing the style of the package such as if the material is recyclable and if you want a box. If you have already purchased your own packages and/or boxes, find out if the company will fill product into and box your package.
Labels could add a significant cost to the overall product. Some private label companies include a basic label with the price of their product which is a noteworthy consideration when choosing a company. There are usually premium labels offered, as well, including digital press and silk screening. A private label Project Consultant will help you determine which label will be best for the material and shape of the package and to what environmental elements the label will be exposed to such as water or sun.
About Pravada® Private Label Cosmetics, Skin & Hair Care Products
Pravada private label cosmetics specializes in simplifying the private label process. Our focus is to provide you with the best products, services and advice to help you develop your own custom branded line.
Pravada private label is based in Toronto, Canada, and Naples, Florida and serves fine spas, salons and retailers world-wide. We proudly offer over 100 skin and hair care formulations; each made with high content, naturally derived and certified organic ingredients. We ensure that our products not only meet your high standards, but also those of Health Canada and the FDA.
Graphic design services, label printing, custom fragrances and a wide variety of packaging makes us your one-stop private labeling specialists. We have a low minimum order quantity (MOQ) of 12 retail pieces and our formulations are also available in bulk sizes to meet your specific needs.
Our Project Consultants will guide you through the creation of your own product line. They will answer your questions, arrange for samples and provide additional information to help streamline the process.
Let Pravada increase your customer loyalty, profits and repeat sales. There is additional information at www.pravadaprivatelabel.com.