How much does it cost to establish a range of cosmetic products?

How much does it cost to establish a range of cosmetic products? 900 900 admin

Has cosmetics always been your passion? Are you thinking of launching your own line of products? It’s a great way to earn money in the beauty market, but only if you think well on the expenses you’ll face. In sales, there are a huge number of variables at play, and so it can be easy to overlook many of them. Before you begin trying to sell your cosmetics, it’s best to first crunch the numbers for your business plan.

What is a custom cosmetics range?

Perhaps you’ve long had an interest in cosmetics. Maybe you’ve worked in a cosmetics company for years. Or perhaps you’ve simply had an inspired idea that you’d like to profit from. Whatever brought you here, what matters is that you have an idea for a custom range of cosmetic products. And what is that? It’s where you launch a product range, and you get to decide everything, from contents, to packaging, to marketing.

When you should be making a custom cosmetics range

Launching a custom line of cosmetics is a very challenging task, and can be made easier by ensuring you’re in a good position to do so. Here’s some examples of good places to start from:

  1. Being in a business that deals in things adjacent to cosmetics, for example being a dermatologist, so that you can put your expertise into designing products or owning a beauty store and using your experience and your established business as a starting point.
  2. Having access to one or more ingredients useful for making the products in your range. For example, if you’re a producer of olive oil or honey, you’d be able to expand your business by selling products containing these ingredients.
  3. Already having a long list of established customers (be it consumers or retailers) that you sell some kind of product to, and who may be willing to buy cosmetics as well.
  4. Having seen an incredibly successful product abroad that has not yet hit the market in your country.

Calculating costs: production

So, you’re thinking of making your own line of cosmetics, of making some money for yourself with no middle-men. This is entrepreneurial attitude is great, but you also have to take this businesslike attitude to assessment of the costs. Let’s start with production. You don’t need to have a factory. You can just use some facility you already have access to for making the product. Then, work out the type of product, and the purity and quality of the ingredients. For example, a line based on hyaluronic acid may have a low or high concentration (the latter of which of course raises costs). It may also have high molecular weight, which creates a sort of film on the skin, or low molecular weight, which penetrates deeper into the skin. The ideal is of course to use both, but obviously this will increase the costs. When you decide to produce your line of cosmetics, either by yourself or via third parties, you will also have to register your company’s tax status, and so will need to enlist the help of a good tax consultant or your area’s Chamber of Commerce.

Calculating costs: packaging

We all know that, in the world of cosmetics, the packaging is as important as the product. There is even a market for cosmetics containers, which can vary in quality and therefore price. Start by considering the product’s ingredients. If it tends to chemically oxidize after exposure to air, go with a pump container, as they’re airtight and the product will only come out when you press the nozzle. Next, consider the texture. Creams go in in jars or tubes, serums in tubes with small spouts or in bottles with droppers, and so on. Choose the material, perhaps a sustainable one. Keep in mind that glass, although more environmentally friendly, will increase transportation costs due to weight. Work out the costs of producing the container, as well as the costs of the external packaging, which will likely be made of paper or cardboard. These are all stages of professional work, because your packaging helps to sell your cosmetics products.

Service costs

You have your product, and you have the packaging done as well. Now, you need to consider a suitable place for storage. Your product must be preserved in its the packaging, which must also still look good. A key factor in sales is distribution costs. It can be really complex finding retailers willing to sell new products. One solution to this problem could be to exclusively sell your products online. For this however, you’ll need a specially designed site made with all the things necessary for online sales, so as to reach potential customers anywhere they might be.

The costs of an online shop

You’ll be able to do it yourself if you’re a digital marketing professional, but otherwise you should rely on the professionals’ expertise. Something to note: cosmetics photography is more complex than it seems. The right set and lighting, as well as the eye of a skilled photographer, can make your products much better looking, as you’ll see here. The same goes for your website, which must be easy to navigate quickly, to ensure customers can move smoothly from browsing to buying.

Extra costs: advertising

Now let’s talk about extra costs, although ones that are actually essential – namely, advertising. You can make fantastic products and have a wonderful e-shop, but if no one even knows it exists, you’re not going to be selling very much! Because of this, it’s essential to draw up a marketing strategy, for example one that makes use of social media, which over time will get people to know about and then buy your products. Plan a professional-looking marketing campaign on Facebook, Instagram, or TikTok. These 3 social media websites are where most of the modern factors that influence consumer choices are found.