Desperate for Advice on a new Start-up.

[Charlie2018]

Hi Everyone,

I created a new brand of cosmetic, I found a manufacturer that will do a 1000 unit run but wants to charge me $4. per unit, the shelf cost is $4. It is a small pocket size 20ml cosmetic spray, boxed.

I am worried about the quality of the sample run, how do I address this considering manufacturer costs of $4000 it would be a costly mistake if the quality was not up to scratch, what is the normal procedure for a sample run, I have zero experience..

My thinking is I need the sample run to approach the buyers to get the orders, is this the correct procedure?

As you can see any advice appreciated...

I would also consider a business partner that has experience in this field, but do not know where to start in looking?

 

[Mr D]

Hi Everyone,

I created a new brand of cosmetic, I found a manufacturer that will do a 1000 unit run but wants to charge me $4. per unit, the shelf cost is $4. It is a small pocket size 20ml cosmetic spray, boxed.

I am worried about the quality of the sample run, how do I address this considering manufacturer costs of $4000 it would be a costly mistake if the quality was not up to scratch, what is the normal procedure for a sample run, I have zero experience..

My thinking is I need the sample run to approach the buyers to get the orders, is this the correct procedure?

As you can see any advice appreciated...

I would also consider a business partner that has experience in this field, but do not know where to start in looking?

If the manufacturer is charging you $4 per unit then the shelf price has to be considerably higher.
You set price usually by charging more than it costs you to buy the item - and your $4 per unit manufacturer price is only part of your costs. Add in shipping, import duty, vat etc.

I'm looking at a 59p per unit item at the moment, from a Chinese manufacturer. Its shelf price is higher than £4. Quite a bit higher.

You could do a sample run then approach buyers, your difficulty there is being a new brand.

Oh and you need the stuff tested to make sure its safe to use.

 

[The Byre]

If you think that $4k is costly and you have little or no marketing budget, then you will spend the next ten years wondering what you are going to do with one thousand bottles of gunk nobody wants!

Suggestion - start with 50 bottles of 'home-brew' and put the remaining money into marketing. Cosmetics is 99% marketing and 1% product!

 

[Daugela]

Have you included the cost of delivery? it seems like you don't take it into consideration...

 

[Charlie2018]

So funny re making it myself.. the factory is local to me and 1000 units would not be so bulky as the product is tiny.
You are correct I have thought it through however the product needs to be made professionally
in order to get the orders. I am looking to supply Boots, CVS etc..

 

[Mr D]

So funny re making it myself.. the factory is local to me and 1000 units would not be so bulky as the product is tiny.
You are correct I have thought it through however the product needs to be made professionally
in order to get the orders. I am looking to supply Boots, CVS etc..

Good luck with that.
May want to ask your trade association about any 'meet the buyer' events, any help they can give with contact details etc.

 

[Charlie2018]

Sorry.. you are correct I have Not thought it through...

 

[Charlie2018]

Thank you, for you advice it all helps

 

[The Byre]

I am looking to supply Boots, CVS etc..

Without a massive marketing budget running to seven figures, they are unlikely to want to know you. Look at independent shops local to you, so that you stand a chance of getting off the ground.

 

[Charlie2018]

Thank you, however I really wanted advice on the Sample run and is that the normal procedure?

 

[The Byre]

I can only talk about industrial supplies such as bearings and copper wire, as well as pro-audio and video stuff. In that field, only established manufacturers were acceptable and a handful of parts would be sent for in-house testing.

A giant retailer or manufacturer will want to see all kinds of test data and health certification. For example, an electric motor manufacturer I worked with (tech documentation) required drinking water, fire, heat and ISO9001 certification on all parts and I can assume that Boots etc. will require similar, as well as being able to see that you are able to manufacture enough to stock all 2,500 branches and back that up with a marketing campaign.

Many supermarkets demand rental for shelf space, 90-days credit and sale-or-return at your expense. Boots seems to be somewhat more relaxed - here's something to read on that subject -

http://businessadvice.co.uk/supply-...-to-find-a-nugget-from-independent-suppliers/

Good luck anyway!

 

[Gordon - Commercial Finance]

I started a cosmetics company from scratch a few years back and then sold it.

Firstly, your pricing is wrong. The markup available in the cosmetics world is astronomical, and you are not taking advantage of it. For example, I had a 25ml product which cost me £1.84 to produce (bottle, label, ingredients, packaging, everything) and I sold that for £25 retail. Selling wholesale would be 50% of that to allow retailers to make a bit but even at £12.50, I was still getting a nice markup.
It is no coincidence that Chanel number 5 makes the top 10 most expensive liquids in the world easy enough.

Secondly, don't throw money away doing a big outsourced manufacture run. Boots are highly unlikely to entertain you with no history and no experience. Instead as has been suggested above make it yourself and get in to boutique-type stores, and on your own website and try and get some kind of brand power that way. Build a following. Then some online retailers might take notice after a lot of time and a lot of marketing spend.
You can even then make a feature of the "boutique brand" aspect. *made in small batches* adds value these days just like *natural ingredients* does in this space.

Regarding your actual question about sample runs, most outsourced product manufacturers will let you purchase a sample run, providing there is not a huge tooling and setup cost to them in doing so - just ask them.

Happy to answer any other questions publicly or privately if you need. Learn from someone else's mistakes might save you paying for your own! It is an extremely rewarding market to be involved in if you get it right.

 

[Charlie2018]

Hi Gordon, Thank you so much for your reply,
I was hesitant to go ahead with the costly sample run and make a mistake hence why I wanted to ask around and get some feed back.
Maybe sourcing the product individually is the answer, I was not thinking in that capacity, ie buying the bottles and packaging printed separately.
I know my product can be produced so much cheaper say in China but who wants Chinese cosmetic products or say larger runs here on home ground. The max I could ask for my product is £4.00 and that is a push if you knew what it was you would probably agree.
I would be so great full for some mentoring and advice

 

[Gordon - Commercial Finance]

if you knew what it was you would probably agree.
I would be so great full for some mentoring and advice

Feel free to send me a PM and give me the whole story

 

[Chris Ashdown]

Could you order a single big run say 10 to 20 litres and bottle it your self

PishPash on this forum can tell you of the problems dealing with large retailers

Whatever route you take you will need massive amounts of money for advertising, testing etc

 

[Noah]

but who wants Chinese cosmetic products

Lots and lots and lots of people.

Unfortunately.