margins in cosmetic industry

[gtechrob]

massive generalisation I know but what margins would there be through the chain

ie what margin for retailer, brand and manufacturer

I am looking at producing something for a brand for which I have a pretty good idea what the customer is willing to pay for but no real idea what the brand or retailer needs to make out of it (brand has already shown interest)

thanks for any info!

 

[raineshoe]

Not quite clear, are you making the product from scratch?

 

[gtechrob]

yes - we are manufacturing

 

[gtechrob]

feel like the teacher in ferris bueller's day off

anyone

anyone




bueller?


how about for other products then?

 

[raineshoe]

I don't know about mark up, although we sell theatrical makeup etc and I know that the mark up that is quite small. You need to sell loads to make any profit. I do know other people that have done similar to what you are stating and said they've never made any money yet spent thousands and found the market very hard to crack. Think you could be up against it as there are some big players in the cosmetic market.

 

[Barnie]

Cosmetics has one of the largest mark ups. 10 or 20 times from manufacture cost depending, some are higher

The downside is higher marketing bills, which is why its still a tough industry even with good margins

I worked with cosmetics for years and it stunned me at what some items cost

 

[gtechrob]

none teh wiser from any of this tbh. would 20% margin be ballpark? think we can probably push to 30% margin. I know the brand wants to have 70% margin from RRP. this is not for a mainstream product so doesn't have to carry a massive marketing budget.

 

[Talay]

Surely the real cost is in development whilst the manufacturing cost of the product is relatively small. The additional large costs would be in positioning, advertising and branding it I would have thought.

 

[tony84]

My mum used to sell cosmetics. Some of the mark ups could be pretty good - others wernt too great. Things like Mac you couldnt get.

The main thing was people generally wanted branded names rather cheap things they had never heard of (not that im saying yours at cheap) unless it was an eye or lip pencil and then they would be happy to add a 50p item to their order.

 

[PeopleWatcher]

200%, maker, 300% super marketeer, 100% small but busy retailer, 100% wholesaler, all others pay cash. A good example is Cola drinks, all water, bottle costs more than contents. For perfumes see Grasse in France, websites.

A relation buys perfume in 2000 gallon lots, a tanker load is put into gift bottles which are no bigger than a table pepper pot-shaker, RRP is £80-00!!!