How to Start a Skincare Line Business – 9 Things to Know Before Launching

Whether you are a passionate entrepreneur or the one who wants to stand on your own feet by starting your own skincare brand or make it a side hustle and looking for some useful resources on How to start a skincare line then, this article is definitely going to provide some useful insights

It can be an exciting moment to start a skincare line business and it involves a lot of things. But before we get into them let’s know some quick facts about Skincare Business

1. The cosmetic industry is a highly competitive sector you need to be prepared for a lot of competition.
2. There are already established brands in every part of the world having their own fanbase.
3. Upcoming brands are not easily accepted by the users unless you do outstanding marketing and promotion.
4. It is hard to predict your product portfolio success rate. some brands get success when they diversify their products whereas, certain brands find success when they specialize in a single product
5. You need to be good with numbers! Especially, If you’re the only person running the business you need to be very calculative about pricing and promotions stuff.

Let’s also see, what makes it a lovable business.

1. Skincare business is an evergreen market with huge customer base
2. You can try and test a lot of products. Whether you make organic or vegan or other skincare lines, you have a lot of opportunities in this sector.
3. It can be started just as a home business or side hustle
4. You can do a lot of marketing and promotional stuff by yourself in an economical way by making use of social media platforms like Instagram, Pinterest, Facebook, and Youtube etc.,. There are also lot of Micro-influencers who charge nominal fees with which you can leverage your brand’s marketing capability
5. This is one of the best businesses to showcase your creativity either in the form of branded packaging or advertisements
6. You have a lot of helpful websites on the internet that can guide you in creating templates for the privacy policies, shipping and return policies, etc., So, you don’t have to worry about them.

How Much Does It cost to start a skincare line?

The amount required to start a skincare line depends upon three things, 1) What type of Product you are making 2) How you are making 3) the Scale of your Business.

If you are starting a skincare line under a private label manufacturer, then it would range from around $5,000 – $20,000. Whereas, if you are going to make your own products at home, then you need around $1000 – $2,500.

But if you aim to make it as a potential business, then a small-scale skincare brand requires about $10,000 to $25,000 of the initial investment. Even if this budget seems to be high, you can still try to start a skincare line by optimizing resources and sales strategy which we have covered in detail

The Process of Starting a Skincare line

Just like any business, starting your own skincare line also needs careful planning and strategy. As we have told you earlier this is a competitive niche, and the final judgment lies in the hands of the customer, and it’s really hard to predict!

To be prepared yourselves, you have to learn all the steps involved in starting this business. So, let’s find out the 9 important steps involved in starting a skincare line

1. Gather all the Basic information about Skincare Industry

The first step in the process of starting a skincare line is knowing about the skincare industry. This step will give you a basic idea of the skincare industry

Just look at the customer trends, read reviews and analyze what type of skincare products were currently driving market value. By doing so, you will get an idea about the products, later, figure out what type of skincare product is best to start

Tip: Use tools like Google Trends, Quora and Answerthepublic.com to find out trends and Topics. For Market research, use Statista, for reviews you can browse e-commerce platform like amazon, ebay Etsy and Nykaa

2. Learn What you are not able to figure out – Very Important Step of the Whole Process

Even if you are not able to figure out the market trends and customers’ expectations you can reach out a consulting firm to get the required data

But, if you don’t have sound knowledge on the product and its development phases then you were in real trouble. Especially, If you are the only person managing the business then, the entire weight is on your shoulders

You have to have good knowledge of the development process of Skincare products. Like what is the manufacturing process, how to choose ingredients and what are their effects, types of raw material and their properties, etc.,

For example, if you are thinking to develop a vegan skincare line and are not able to figure out the correct composition or ingredients, in such cases you need to at least know how to find and where to find experts that can guide you in the manufacturing process

So, before you jump into the business, learn as much as you can know about skincare business. You can read books, listen to podcasts and enroll to webinars, etc., there are several ways you can learn, the only thing is, you need to have a learning mindset

Here are some popular Skincare courses that you can learn

3. Understand the Legal Requirements for Starting Skincare Business

When it comes to the cosmetics industry there are certain laws and regulations that you must ensure to know. Each country or region may have different types of laws and acts in the cosmetics industry.

For example, In USA, there are two important laws in the cosmetic industry, the FD&C act (Federal Food, Drug and Cosmetic Act) and Fair Packaging and Labelling Act (FPLA).

Whereas European Union, you will have to go through the Cosmetics legislation which emphasizes steps in registration process, regulatory guidelines, and testing of the product

In India, cosmetics products are regulated by the Central Drugs Standard Control Organization (CDSCO)

On other hand, manufacturing practices such as GMP (Good Manufacturing Practices) and GLP (Good Laboratory Practices) ensures the product meets safety and quality standards

4. Deciding Which Type of Skincare to Start

You can make lots of products like Lip balms, Sunscreen lotions, Peelers, anti-aging creams, facewash, and serums, etc., But you have to decide on which way you are going to prepare them. Basically you have three types Organic, Vegan and Chemical Safe

If you’re starting an Organic Skincare line.

Then, your entire line should be prepared using natural products, which are mostly plant based extracts like essential oils, fruit peels, and seeds, and some animal-based sources like egg yolk, honey, and beeswax. Keep in mind, that the main objective of starting an organic skincare line is that, all the ingredients should be free from chemicals, harmful pesticides, and toxins.

Or, if you choose to start a Vegan Skincare line

Vegan products are those that don’t contain animal-based produce like honey, lactic acid, and biotin, etc, and they were not tested on animals; cruelty-free. However, before you choose to go in this way you have to research thoroughly about vegan products because they were seen as expensive products as well as with questionable durability

Chemical Safe Skincare line

The vast majority of skincare products were chemical-based, however, there are several raising concerns about their ingredients like parabens, acids, and Sulphates. There are, still several skincare products that use neutral chemicals in their manufacturing process.

5. Creating a Business Plan for the Skincare line

Business plan is an essential step of starting any business, you need to list out the goals of your business and write down how you are going to achieve them. Here are some common elements covered in a Skincare line business plan

• Budget details on supplies, ingredients, and equipment
• Details about your business structure include registration, insurance, and licenses.
• Details about the manufacturing process, location, and workers
• Forecast of sales and expenses (generally 6 months is most chosen)
• Marketing strategy

A well-written business plan helps you to travel in the right direction and gives realistic budget estimations.

6. Creating a Product line

Every skincare brand makes several products, in them, some may succeed while some may not go as expected

A product line is nothing but list of products that a company makes under their brand

In the skincare business, having a strong product line is important.  You simply cannot rely on one product. Even if you choose to make only one product you must craft It with the highest quality

While deciding a product line ask yourself these questions

• Who’s it for?
• What problem can my product solve?
• Does it have demand in the market?
• How my product is different from the competitor?
• Do I have HERO product? If so, how well can it perform?
• Are my product pricing the right fit for my target customers?

These are all the answers you can decide while making a product line and remember, for newly starting skincare company, a HERO product is the most important one. It is nothing but the best seller or the most demanding product of your entire skincare line.

7. Funding Your Skincare Business

One of the quintessential parts of any business is to make sure there is enough fund to run your company. Startup costs for skincare business can range from as low as $10,000 to $15,000

This amount can be quite expensive for entrepreneurs. However, with a detailed business plan and promising product and marketing strategy there are a lot of Investors who can support you in the journey

You can also take advantage of Grants which support your business by providing a reasonable amount. That can aid you in the initial stages of your business

Unlike Angel Investors or Venture capitalists, grants don’t need to be repaid or take a percentage of your company’s profit but the only caveat is, that they are tough to get and have high competition. Some of the well-known business grants especially for women  are the Amber grant, Carter women’s Initiative,and Fearless Fund

There are almost 12 Best small business grants for women which you can try to see if you can grab one of those

In addition, you also have alternatives like the SBA microloan program which lends a small amount of $50,000, and Personal loans which depend on several factors like credit score, financial history, and assets, etc.,

8. Creating a Robust Marketing Campaign

There is no doubt in saying marketing is the major driving force for any skincare business to be successful. There can be several factors to make your skincare brand successful but 50% of it undoubtedly goes to marketing

In the skincare business, marketing is concentrated on three important things

• Branding and promotion
• Selling channels
• Packing and Labelling

Social media platforms like Instagram and Pinterest were top destinations for promoting your cosmetics products. In fact, Instagram takes one step ahead of other social media platforms. It is undoubtedly one of the most important marketing channels for skincare business owners where you need to find a suitable influencer with a good number of followers

So, there are 3 important influencers

1. Micro-Influencers (around 10,000 followers)
2. Mid-Tier influencers (around 25,000 followers)
3. Macro influencers (around (500,000 to 1 million followers)

We cannot say how much an influencer charges, but roughly an influencer with 10K followers would charge around $100 per post. Although this might seem to be high it is also an economical standpoint considering the engagement rate of followers and outreach capability

Finding an economical selling channel is also one of the important marketing strategies for your skin care businesses, there are both online and offline methods to do so.

You can set-up an online store using ecommerce platform like Shopify , Etsy, dukaan, etc., or sell your products on websites like amazon, eBay, Flipkart, etc.,

On other hand, take advantage of local supermarkets, saloons and expos which are economical selling channels for new start-ups plus, they are a great way to interact with customers and know what they feel about the product

The third important marketing factor is the Packing and Labelling of Skincare Products Yes, this might sound surprising! But attractive packing and labeling is an important aspect of the cosmetics industry. It helps to catch viewers’ attention, convey your brand’s message, and also protects your product shelf life

The use of minimalistic design, sustainable packing materials, intricate designs, and decorative art are some key aspects in packing of cosmetic products

9. Maintaining Consistent Quality

Have you ever wondered why some people keep on using the same skincare brand throughout their life? The only reason is, that they trust the brand for its consistency over the period of time on things like pricing, ingredients quality, and delivery as promised. This is one of the most important things you should always remember when you develop a product

Delivering as promised and maintaining consistency all the time requires a lot of dedication and hard work.

As your skincare brand keeps on growing it can be challenging to keep the same quality throughout the journey and at some point of time you may compromise on the quality of the ingredients, but you may not see this impact on your sales or brand value. But, in long run, it can be catastrophic. So, although consistency is a challenging aspect in businesses, it gives back Brand value, Loyal Customers, and Good ROI

So, those are the key aspects to be remembered while starting a skincare line. We may have missed a few other things or may not have explained you elaborately. But we hope you understood what it really takes to get into the skincare business.