Getting into the skincare business can be a gateway to the lucrative cosmetic industry. It has a global demand, comprehensive options, and much room for customization.
And you’re not alone! While competition among business owners is high, there remains room for startup niche brands to create a name for their skincare products.
If you’re eyeing to break into the beauty industry, this guide will give you the basics on how to start a skincare line from scratch, with tips to promote your brand effectively.
- How Profitable Is Owning a Skincare Line?
- What You’ll Need to Start a Skincare Line [& Associated Costs]
- Why You Should Consider Starting a Skincare Line as a Side Hustle
- How to Start a Skincare Line in 7 Simple Steps
- Step 1: Decide on the Skincare Products You Want to Sell
- Step 2: Identify a Niche Market and Beauty Trends
- Step 3: Create a Business Plan
- Step 4: Find a Reliable Supplier or Manufacturer
- Step 5: Identify and Comply With Legal Requirements
- Step 6: Start Building Your Brand Identity
- Step 7: Create a Website or an Online Store
- Things to Consider When Building a Skincare Line
- Inspiration: Skincare Line Ideas
- Frequently Asked Questions
- Similar Businesses to Consider Starting
- Wrapping Up
How Profitable Is Owning a Skincare Line?
With an estimated $21.09 billion U.S. revenue this 2023, the skincare business remains a stable industry with a consistent growth trajectory.
Here are statistics proving the industry’s widescale consumer demand:
- The global skincare market reports a revenue of $153.30 billion by the end of 2022.
- Market demand is projected to increase by 5.19% annually until 2026.
- Influencer marketing contributed to 65% of skincare products purchase.
- Skincare products amount to 42% of the global cosmetic business.
What You’ll Need to Start a Skincare Line [& Associated Costs]
Starting a skincare brand becomes more manageable if you prepare all the basic requirements.
Here are the must-haves when setting up your business:
- Skincare Product Lineup: This refers to the type of products you’re selling. Will you focus on serums or moisturizers alone or a combination of both?
- Business Plan: Create a detailed plan on how to operate your business, how much the startup cost, the target market, and growth potential. Expect to pay between $24 to $30 an hour if you’re hiring a professional writer to do this for you.
- Partner Manufacturer: Find bulk suppliers who can create your products. Check for their licenses, location, and equipment quality. Cost varies depending on your minimum orders, but the average initial price for manufacturing runs between $50,00 to $100,000, including your first batch of orders.
- Licensing or Certifications: Identify the required state documents you must prepare to operate a business. Different regions can have varied prerequisites for new ventures, and you must be legally compliant before you can start selling. Most business licenses start at $50 plus renewal fees unique to each state.
- Marketing Materials: This refers to marketing tools and strategies you’ll employ from product launching, distribution, and promotion. Detailing your marketing approach helps you measure the relevance and impact of your products on consumers. If you’re promoting on Instagram, expect to pay between $0.02 to $6.7, depending on your bidding model.
Do I Need a License or Certificates to Start a Skincare Line?
The FDA regulates all types of cosmetics to ensure product safety. However, it doesn’t issue licenses to cosmetic firms. You must contact your local state government to check if they require certifications for operation.
In most cases, you won’t have to prepare any permit for selling your products but will be required to get a business license, which is required for all types of businesses.
Why You Should Consider Starting a Skincare Line as a Side Hustle
Creating a skincare brand that attracts repeat customers can take time. Market competition is tough, and beauty trends change.
However, here are solid reasons why skincare lines remain a promising venture and why you should consider starting one:
- Skin Care Never Gets Old: Skincare brands have been around for decades. Trends may have changed through time, but people of all ages are always looking for ways to look great, healthy, and young.
- High Demand for Personalized Goods: With social media breaking barriers in information access, people have come to appreciate the value of customized items. They come with exclusivity, which appeals to the current generation.
- Easy to Showcase: Skincare products already have a global fanbase. You don’t need to start from scratch to introduce what your items do. The job is to prove how your brand is a better option.
- Can Be Done Remotely: You don’t need to rent a space to display your items. Try maximizing Amazon’s no-inventory selling methods to get started.
How to Start a Skincare Line in 7 Simple Steps
The skincare market is one of the most competitive and profitable businesses worldwide. With comprehensive planning and setup, you can start earning money even without brick-and-mortar stores.
Here’s a step-by-step guide to kickstarting your skincare business:
Step 1: Decide on the Skincare Products You Want to Sell
What skincare line do you envision producing and selling?
As with most beauty and personal care, skin care products come in different categories. When deciding on your lineup, consider the following factors:
- Skincare Type: Most popular types include moisturizers, cleansers, sunscreens, serums, exfoliators, facial oils, and anti-aging products.
- Skin Type: Decide if you’re creating a product line exclusive for oily skin, dry skin, or a combination of both.
- Luxury or Custom Skincare Line: This impacts the cost of your initial investment, so it’s crucial to assess if your choice aligns with your finances. Luxury skincare also invests heavily in research and development and uses innovative ingredients, which adds to the cost.
Step 2: Identify a Niche Market and Beauty Trends
Once you’ve nailed down the product line, your next step is identifying your target market.
Craft a detailed demographic of who they are. How old are they? Where are they located? Are they employed?
Part of becoming a business owner is to get a clear profile of your target customer. This makes it easier to filter current and emerging trends that impact their purchasing decisions.
Some of the trends popular among skincare enthusiasts from all age groups include:
- Preference for natural and organic products
- Preference for cruelty-free products
- A growing interest in products with Niacinamide ingredient
- Preference toward lightweight formulations
- Increased caution against products with aggressive ingredients like sulfates and alcohol
Step 3: Create a Business Plan
Writing a business plan is crucial to building any business. This serves as your blueprint and details the ins and outs of your skincare brand.
An effective business plan should have the following components:
- Executive Summary: It’s a direct-to-the-point business summary, usually a maximum of two pages.
- Company or Business Description: It details the specifics of your skincare business, including the distribution method you plan to employ. This is where you mention your brand’s unique selling point.
- Market Research and Analysis: This specifies your market segmentation, with strategies for reaching them. Details of the supply and demand relationship are included in this section.
- Competitive Analysis: Here, you provide a breakdown of your direct and indirect competitors. It’s where you showcase your competitive advantage in the skincare industry.
- Management Plan: Your company’s legal structure and management team profiles are provided in this section. Entities like executives, lawyers, financiers, and other professionals involved in your business will be introduced here.
- Financial Projection or Plan: Often considered the most critical part of a business plan, this section provides details of your startup costs, potential revenue, and projected business value.
- Growth Strategies: This is an opportunity to showcase the scalability of your business three to five years since inception. Capitalists want to see how you plan to evolve in the skincare industry or dominate your niche.
Think of your business plan as your guidebook to success. It’s not a one-time document you throw away after showing it to investors.
The U.S. Chamber of Commerce suggests you update your plan annually or when production and competition demand it.
Step 4: Find a Reliable Supplier or Manufacturer
After completing your business plan, it’s time to zoom in and focus your attention on how and where you’ll get your skincare product line.
There are two ways to do this:
- Partner with private-label manufacturers
- Create your custom products
Both have pros and cons, and understanding your financial capacity is vital in choosing the best method for your startup business.
Private-label skincare manufacturers are ideal options if you want a cost-effective way of producing your skincare products.
Your manufacturing partner has the space, equipment, and access to raw materials needed to make your product line. The idea is to hire reputable manufacturers to create your product based on your specifications.
You’ll have a say on any unique ingredients you want to be added to your skincare line and use that as part of your marketing strategy.
On the other hand, custom products are something you create from scratch. You handle everything from logistics, manufacturing, and outsourcing experts who can conduct product safety testing.
You’ll have complete control of product formulations for both methods, though custom ones require a hefty initial investment due to the labor needed to set it up.
Packaging materials and design will also be up to you.
Step 5: Identify and Comply With Legal Requirements
Amidst the glam and luxury of the skincare world is its tight legal requirements.
Before manufacturing, you must have a compliance checklist to ensure you operate within the law.
Personalized ventures like crafting scented oils and making body scrubs to sell are subject to FDA regulations. The same goes for skincare products.
Start by checking FDA’s Fact Sheet or Cosmetic Act to understand how they approve and regulate brands. Consumers are becoming more cautious about their skin care purchases, and many prefer brands with the FDA’s seal of approval.
Another element to consider is choosing the business structure of your skincare line. This helps you identify all the permits and licenses required before operation.
Extra factors like product liability insurance and cosmetic certifications are essential to protect you and your business partner against legal complaints about your product.
Step 6: Start Building Your Brand Identity
With social media dominating the digital marketing world, it’s imperative to use it to build your brand image.
For skincare products, Instagram remains a top platform for consumers looking for their next purchase, making it an essential part of your primary marketing tools.
When promoting your skincare brand through social media, consider the following tips:
- Share short tutorials or how-to clips
- Promote time-limited giveaways
- Share testimonials from satisfied users
- Partner with an influencer who can promote your skincare products to his followers
- Conduct live Q&A to interact with consumers
- Try frame-by-frame tutorials
- Create infographics to highlight product features and trivia
- Post product recommendations for different skin types
- Post before and after photos of product use using the best cameras for makeup and beauty for capturing HD shots
- Share star-rating and product reviews
- Share key ingredient trivia
Word-of-mouth marketing follows as you build an audience and repeat customers, so keeping your buyers engaged is essential.
Social media is the perfect avenue to hear their thoughts, and if you want a solid and relevant brand name in the skincare industry, leveraging online marketing is the best way to go.
Step 7: Create a Website or an Online Store
A responsive online store or website must complement your brand’s social media accounts. It’s where you showcase your entire product line, including variation, retail price, and stock availability.
An eCommerce site is your round-the-clock business partner, catering to orders 24/7. It’s also mobile-friendly, making it accessible for customers on the go.
There are several avenues to build your website, but here are the top options for setting up an eCommerce platform for your skincare line:
- Shopify: Most famous for those starting a dropshipping business, It’s also a top choice if you want a straightforward online shop that’s easy to manage. Its plan starts at $29 monthly.
- WooCommerce: This popular WordPress plugin transforms your typical blog into a versatile online shop capable of taking bookings, orders, and recurring payments. It’s free but comes with paid add-on extensions ranging from $0 to $249.
- Squarespace: If beautiful templates are a big deal for you, Squarespace will not disappoint. It has many free and customizable themes with its standard $23 monthly subscription. Unlimited storage and bandwidth also come with the package.
- BigCommerce: This platform includes blogging and SEO tools on its features, making it a great platform if you plan to blog about your products too! Its plan starts at $29.95.
- Wix: Wix’s drag-and-drop site editor is one of the most handy tools you can ask for from a website builder. It has several professional-looking online shop templates and offers over 200+ app integration functionality. Its plan starts at $27 per month.
Things to Consider When Building a Skincare Line
Does building a skincare brand sound like a venture you’d enjoy? In that case, looking at primary considerations before setting it up is crucial.
Can You Run a Skincare Business By Yourself?
Yes, you can. Managing a skincare company can be done remotely without setting up a shop and hiring staff.
Once you’ve partnered with a producer who can handle the manufacturing aspect of the brand, you can pretty much handle the succeeding steps by yourself.
What Is Your Unique Selling Proposition?
What makes your skincare brand different from your competition? If not, what better options can you offer?
Your unique selling proposition doesn’t need to be entirely out of the box.
Remember that the skincare industry has been around for ages. Its allure has been tested over time, and the goal of achieving healthy skin hasn’t changed.
Your edge is how you make things better, coupled with strategic marketing.
How Should You Price Your Products?
Your business’s longevity depends on profitability, but this doesn’t mean overpricing your goods.
Market research shows you the price points competitors offer, and the idea is to create a price range within the average.
Scaling up can be done once you’ve started gaining traction and establishing your business name.
Inspiration: Skincare Line Ideas
Can’t decide what feature to focus on your skincare brand? Here are some trendy ideas that fit various skin types:
- All-Natural Products: Cosmetic items with organic ingredients have the reputation of being healthier and less prone to contamination. Try building a collection using healthy ingredients to attract consumers who prefer natural things.
- Scented & Unscented Collection: Some prefer aromatic variations for their soothing effect, while others want to keep it plain and simple. Add both to your collection to cater to a broader market.
- SPF-Powered Formulation: The sun is a major skin damage contributor, and everyone wants to get their SPF boost! Capitalize on this hype and add SPF content to your products.
Frequently Asked Questions
Can I Make My Own Skincare Products?
Yes, you can make personalized skincare items. You only need a trusted manufacturer to create your desired products based on pre-determined specifications like ingredients and formulation.
Once available, you can decide on the packaging style, logo, and product labels.
How Do I Market My Skincare Brand?
A proven-effective means of marketing any skincare brand is through social media. Instagram and Youtube top the list of social platforms with the most active beauty influencers.
An alternative is to promote direct sales companies instead of online marketing to save on advertising costs while building long-lasting customer relationships.
Similar Businesses to Consider Starting
If breaking into the skincare industry sounds too complex, here are other business ideas to try from scratch.
- How to Start a Craft Business: Do you love creating handmade, personalized items? This article shows how to convert that interest into cash by selling your works online.
- How to Start a Lash Business: This gig is a perfect remote business for beauty enthusiasts interested in creating custom eyelashes for a fee.
- How to Start an eCommerce Business: Sell anything, anywhere! Learn how to set up your online business and build a product inventory without setting up a brick-and-mortar store.
The skincare industry is a booming business and one that shows no signs of decline.
With a global market and easier ways to sell products online, starting your collection has never been as easy.
Do you already have a skincare category you want to sell? Use our guide to polish your plan and develop a solid product line.