Tips for Starting a Skincare Company
As the skincare market continues to expand, the time is right for starting your own company. You’ll never reach the level of success you desire, however, without establishing a disruptive brand that stands out from the completion. A 2019 study by the independent market research company the NPD Group singles out the prestige beauty market as one of the fastest-growing sectors in United States retail sales with an annual growth of 6 percent. And, with an annual growth of 13 percent, the skincare category stands out as a particular achiever, comprising a full 60 percent of the prestige beauty market’s total industry gains. “If I had to use one word to characterize the state of the U.S. beauty industry today, it would be disruption,” says NPD Group executive director and beauty industry analyst Larissa Jensen. “Whether we look at categories, brands, or retailers, there are sweeping changes taking place in the market landscape.” Jensen proceeds with a warning to skincare entrepreneurs everywhere, stressing the fact that “brands and retailers must not only be cognizant of these transformations and act upon them, but identify new white space opportunities to captivate consumers and further differentiate themselves from the crowd.” Leveraging Areas of Disruption in Skincare Industry Prospective skincare company owners and chief executive officers should pay close attention to the specific growth areas within the skincare industry if they want to capitalize on areas of disruption and establish a distinct, unique, and valuable brand. The booming popularity of natural beauty products, for example, represents a dramatic sea change in terms of the qualities and characteristics that customers have come to expect. Reflecting this change, the top contributor to the $5.6-billion skincare industry are natural skincare brands. The NPD Group reports that natural skincare products accounted for more than one-quarter of annual skincare sales, up 23 percent from the previous year. The NPD Group report goes on to identify lip treatments, toners/clarifiers, facial sprays, and alphabet creams as the fastest-growing skincare product classifications. Customers are also increasingly purchasing skincare for the body, protective sunscreens, and self-tanning products. Legal Requirements to Operate a Skincare Business Before starting a skincare company, it is absolutely imperative that you understand all the licensing and regulatory issues that you will face. In general, the legal requirements that you must meet to operate a handmade cosmetics business are similar to the legal requirements that other small business must meet. However, as part of the cosmetic/beauty industry, you must ensure that your skincare product(s) pass muster with the US Federal Drug Administration (FDA). Regulated by the FDA under the Federal Food, Drug and Cosmetic Act, all skincare products must be deemed safe for consumers for indicated conditions of use prior to their release. They also have to be labeled properly. It isn’t against the law to make cosmetics in your home, but it is your responsibility to ensure that this is accomplished safely. In his article “How to Start Your Own Line of Skin Care,” Houston Chronicle contributor Michael Flanagan suggests accessing the FDA’s Good Manufacturing Practice Guidelines/Inspection Checklist before designing your manufacturing space. This is the best way to prepare this space for its required FDA on-site inspection. Manufacturing Your Skincare Products The Houston Chronicle article goes on to offer a number of skincare product manufacturing tips including cutting down on overhead costs by looking for bulk suppliers to secure all necessary raw ingredients. It recommends accessing online distribution networks such as MakingCosmetics and Admix to meet both your supply and equipment needs. If you choose to start your business with a manufacturing space on your residential property, you can often use your kitchen as your main hub of activity. The equipment that you will need depends entirely on the type(s) of skincare product(s) that you want to make. Skincare companies that plan to make clay facials, for example, can probably begin by using existing household mixing bowls and spoons. Those who want to make soap, however, must first buy soap molds and a few other essential pieces of equipment. Skincare Company Marketing No matter how great your skincare products happen to be, you won’t get far in the skincare sector without a comprehensive and outstanding marketing campaign. Here are just a few elements that you’ll want to include in your unified skincare company marketing efforts. An official website – In virtually any industry, a high-quality website is absolutely essential. Your website should reflect your company’s core values and commitment to excellence. Even if you don’t plan to sell your skincare products online, customers will inevitably turn to your website for answers to important questions as well as information about your company and what it does best. A strong social media presence – Reach your target consumer base on the social media platforms that they already frequent. Depending on your target demographic this might mean maintaining compelling, informative, and up-to-date company pages on multiple platforms including Facebook, Instagram, Twitter, and Snapchat. Social media outreach is a great idea for a wide range of reasons, but its ability to engender both consumer-to-company and consumer-to-consumer interactions is simply unparalleled. Email newsletters – As a skincare company, you’ll want to turn each buyer into a repeat customer. Email newsletters are a great way to drive consumer loyalty. Although you don’t want to bombard customers with constant messages of little value, occasional newsletters can be a great way to make customers feel valued. Share content that will command attention, announce the release of new products, and motivate consumer action with various sales and promotions. Non-digital marketing efforts – Don’t forget that the majority of people still buy their skincare products in brick-and-mortar stores. Consider visiting regional beauty salons, spas, and health/beauty stores to offer free samples. If these establishments express an interest in buying your products, you should provide them with attractive wholesale pricing. Other traditional sales techniques that continue to work well include the staging of at-home skincare parties. Skincare Branding While all of the techniques outlined above can effectively reach