The skincare industry isn’t just lucrative but also recession-proof. It’s one of the industries that remained stable during declining retail sales.
That’s a fantastic opportunity for aspiring entrepreneurs who want to start their skincare line.
Do you want to know how to start a skincare line?
You’re in the right place. I’ll teach you everything about creating a skincare-focused small business.
Whether you’re planning to offer anti-aging products, moisturizers, anti-acne creams, or brightening serums, facial oils, this guide will explain in detail how to start a skincare brand with a small capital.
Is Skin Care Business Profitable?
Before I share my guide on how to start your own skincare line, I’ll first discuss the skin care industry.
Is it a profitable business idea? Or is it a venture with a high failure rate?
The skincare business is the most profitable category in the beauty industry, although it comes with a caveat.
It’s also the most competitive, with the top global players and indie brands fiercely competing to increase market share.
According to a 2022 Industry Research report, the cosmetic industry will experience a growth rate of 7.1 percent through 2027.
The same report also revealed that the global skincare market is worth more than $56 billion. It presents many opportunities for entrepreneurs and even skincare enthusiasts, especially those who can meet the growing demand for natural and organic products.
How To Start a Skincare Line: The Step-by-Step
If you want to know how to start a skincare line with no money (or very limited capital), this guide walks you through everything you need to know.
1 – Do Your Market Research.
Every business needs a solid foundation. Do your market research to identify your target audience, competitors, and untapped opportunities in the beauty industry.
Cosmetic skincare is a vast industry, covering anti-aging serums, custom products for ethnic skin, sunscreen, multipurpose make-up, and countless other products.
During the planning phase, you also need to identify your target market.
Here are some common skincare niches to may want to consider.
Skincare products for ethnic skin.
If you want to know how to start a skincare line for black skin or other types of ethnic skin, learn its clinical differences from lighter skin. Find what’s missing from the current offerings to find a unique selling point.
Luxury skincare products may have more expensive raw materials. They often have higher production costs, as well.
Sustainable and innovative products.
Starting a natural skin care line requires non-toxic ingredients and recyclable packaging to attract an eco-friendly audience. Customers are also increasingly preferring cruelty-free products.
Special treatment skin care.
These products treat specific issues like age spots, acne, oily skin, dry skin, and wrinkles.
2 – Create a Business Plan.
Your business plan outlines your important goals. It dictates your future business decisions and helps you manage your resources efficiently.
You’ll also need a business plan when looking for a business partner or investor.
When drafting your business plan, make sure you include these key points.
An executive summary of your business (e.g., the type of skin care products you want to sell)
Details of your marketing strategy and marketing tools you want to utilize
Where to source your products (Are you making your own cosmetic line, or do you want to source your products from a reputable manufacturer?)
Financial information and operations and management plan
3 – Secure the Legal Requirements.
Before you start creating your first skincare product, you need to know the legal requirements.
Read the Food, Drugs, and Cosmetic Act that ensures the safety and quality of all cosmetic products. For example, the act requires properly labeled products for skincare brands.
If you plan on making your products at home, adhere to the FDA regulations.
You must also secure other licenses and permits to protect your business entity. You may want to discuss with a lawyer the issues below.
Health and safety permits
Product liability insurance and other coverage
Professional licensing for services and cosmetic certifications
4 – Identify Your Hero Product.
Your hero product is usually your best seller and the one you consider the best representative of your brand.
If you plan to have your own line but have limited funds, always start with your hero product to attract your target audience. Think of it as the flagship of your brand image.
5 – Source the Equipment and Ingredients You Need.
You don’t need fancy equipment to start a skincare line. You can use spoons, spatulas, mixing bowls, blenders, kettles, and other common kitchen utensils and equipment.
However, you may need to invest in molders, fluid transfer, tanks, and agitators, depending on the skin care products you want to manufacture.
You’ll have to talk with several suppliers and find wholesalers for sourcing your materials and ingredients.
Even if you partner with a private label manufacturer, you still need supplies (packaging materials and papers) and equipment (printers) for your home office.
6 – Build Your Skin Care Brand Image.
Brand creation includes choosing a business name, creating a logo, and designing your product packaging to capture your company’s core values.
If you’re artistic, you may create the marketing images yourself.
However, you may want to hire a graphic designer to create a more professional look. Your branding appears everywhere, including your marketing materials, website, social media accounts, etc.
7 – Build Your Online Store.
I recommend Shopify, as it’s the most straightforward platform that can get you started quickly, efficiently, and affordably.
Use pre-built templates, colors, images, and other graphic designs that reflect your brand and appeal to your niche market. Create detailed product pages that showcase your products.
8 – Market Your Skincare Business.
There are many strategies to grow your connections and create a buzz, from influencer collaboration and social proof to word-of-mouth marketing and user-generated content.
Contrary to popular belief, you don’t need to be a top skincare brand to use influencer marketing. You can collaborate with micro-influencers on Facebook and Instagram to reach a wider audience without spending a fortune.
How To Manufacture Skincare Products at Home
Manufacturing skincare products at home requires a lot of scientific knowledge. You don’t need to be a chemist, but you need to thoroughly understand the scientific side of creating formulas.
Here’s how to start a beauty product line from your home. Use this as your starting a cosmetic line checklist.
1 – Formulate Your Skincare Products.
The formulation must be effective, but it should also be safe. It must remain stable for a long time on the shelf, so you should find a preservative for preventing microbial growth.
To prepare a formulation, you must know how ingredients can interact. Some combinations are dangerous, so don’t rely on public blogs.
You must also measure these ingredients correctly. Some materials can be dangerous in large doses.
2 – Choose a Proper Container.
The container is more than an aesthetic. It also protects the formulation and keeps it stable.
Make sure it’s appropriate for the product and prevents contamination.
3 – Follow Good Manufacturing Practice (GMP).
Following GMP ensures you don’t contaminate your product before, during, and after production. It involves the basics, like washing your hands and disinfecting your equipment.
4 – Buy Materials and Equipment.
As previously mentioned, you can create products using kitchen utensils. As long as they’re clean and sanitized, you can repurpose them for your manufacturing process.
You can save money this way, but it may manufacturing at home may become more expensive in the long run. When you find yourself needing specialized equipment and more space, consider other alternatives, like partnering with a manufacturer.
How To Find a Reputable Skincare Manufacturer
There’s a lot to consider when making your own skin care products to sell. However, you don’t have to manufacture the products yourself.
You can learn how to start a skincare business with a manufacturer.
You can work with a private labeling manufacturer or a contract manufacturing provider.
If you want to focus on your business operations rather than product manufacturing, get a private labeling partner.
In this approach, another company creates your product. They handle the formulation, production, and the packaging. A small business can easily dive into the skincare industry without much manufacturing knowledge and low startup costs.
An alternative is getting another company to manufacture your products using your own formulation and packaging. You have more control over the process, as you also have to source your own ingredients.
However, the initial cost might be higher. Some manufacturers have a high minimum order quantity.
How Much Does It Cost To Start a Skincare Line?
The amount you need to launch a skincare product line depends on many factors, such as the following.
The initial investment also depends on your manufacturing strategy. Will you manufacture your products at home or source your formula from a manufacturer?
If manufacturing skincare products at home is your goal, expect to pay anywhere from $10,000 to $20,000 as your starting capital.
However, you may need a larger capital if you partner with private label manufacturers. Some will require you to buy dozens or hundreds of units per order.
How Much Can I Earn from Having a Skin Care Brand?
There’s no exact way to determine how much you’ll earn from your own business. It depends on your marketing efforts, product effectiveness, and pricing strategy.
However, top players in the skincare industry regularly see over 50% gross margin. Luxury brands enjoy higher profits overall.
For small businesses, the average profit margin could be anywhere between 10% to 15%.
How To Price Your Skincare Products
There’s no exact formula for pricing cosmetic products. To give you an idea, most entrepreneurs in the skincare world suggest multiplying the unit cost by five or six to determine the retail price.
However, you have other factors to consider.
How much your target customers can afford
The costs of your ingredients, product packaging, and overheads
Your brand positioning
What other brands charge for similar products
Coming up with a pricing strategy mostly depends on your market research. You’ll also have to develop strategies for discounts and offers.
Tips on How to Create a Skincare Line with Small Capital
You don’t need hundreds of thousands of dollars to start your skincare line. Here are some practical tips to help you get started.
Create your own products at home for a lower capital than having a manufacturing partner.
If you have limited funds, consider starting off as a product distributor. Once you have enough money, then you can have your own skincare brand.
Utilize free marketing strategies like newsletters, content marketing, social media, and affiliate marketing. If you want to try paid ads, start small.
Reach local markets by participating in trade shows and partnering with local brands.
Create a platform to sell your products online. You can create a social media page or a website using free or low-cost website builders, such as Shopify, WordPress, or Wix.
Avoid buying unnecessary equipment. In many cases, you can use your mixing bowls, spoons, and spatulas that you already have in your kitchen, which can serve as your manufacturing space.
Look for bulk suppliers for the ingredients and raw materials.
Focus on Your Brand
My best tip is to focus on building your brand, not just your business.
In the past few years, customers are leaning more toward authentic and organic brands. They don’t want to feel they’re interacting with the brand when they buy their products.
Your brand must have a personality. It’s what makes your skincare business unique.
That way, you can eliminate many of your competitors. When you build an emotional connection with your audience, you can rely on their loyalty.
Create strategies to attract new customers and keep your existing customers. Show your personality, share your stories, and relate to your audience.
Frequently Asked Questions (FAQs)
Do I Need To Get a Degree To Start My Own Skincare Company?
You don’t need a bachelor’s degree or formal training to formulate skincare products. However, it’s worth taking courses on how to make skin care products to sell. You may also enroll in business management classes.
Can Anyone Make Skincare Products? Or Do I Need to Be a Dermatologist?
Anyone can manufacture cosmetics in their home. However, it’s your responsibility to use safe ingredients and make your products in a clean environment.
Do Skincare Products Need FDA Approval?
You don’t need FDA approval when selling skin care products, except when you use certain color additives. However, you need to meet the legal requirements in your state or city.
Do I Need a License To Sell Natural and Organic Skincare Products?
States and local authorities may require licensing and certification to start a small business from home. Ask the Small Business Administration office for specific requirements.
Is It Legal To Sell Homemade Skincare Products?
Yes. Ensure to follow proper manufacturing practices, including accurate labels and a clean workspace. Many successful skincare entrepreneurs start their businesses manufacturing their products at home.
Is It Hard To Start a Skincare Business?
Yes, especially if you plan to manufacture your own skin care line at home. You need to do in-depth research, develop, and test them.
However, it becomes easier if you partner with a contract manufacturer or private label company.
How Can I Launch a Beauty Brand With No Money?
Do you have a winning business plan? Do you want to know how to start a skincare line with no money?
Look for angel investors. You may find some people willing to lend you money.
How Can I Start a Cosmetic Business Like Sephora?
You don’t have to produce your own skincare line to enter the beauty industry. You can set up a boutique to sell other brands, like Sephora.
However, this isn’t an easier route. You have to source products and find brands willing to allow you to display their products.
How Do I Sell Cosmetics on Etsy?
You’ll need to set up an Etsy shop to sell on the platform.
The Bottom Line
Starting a skincare business from home isn’t easy, but I hope this guide helps you get started.
There are different routes to take, so you should study your market and budget carefully. Whether you have a small capital or endless funds, you should know where to allocate it to build a successful cosmetic business.
However, the most important part is building your brand. Providing a consistent and excellent customer experience will help you survive in this competitive industry.