Starting a cosmetic / personal care company

[Pezerinno]

Hi folks,

I'm thinking about starting a cosmetic company and thought people may be able to offer advice as I have no background in cosmetics!

The product I'm thinking of bringing to market currently exists in the UK but only in small volume units. Larger volume (and therefore cheaper per ml) are available overseas but not in this country. Now the upside is my product would be unique but the downside is competing companies could easily copy the product if it became obvious there was a market for it.

This brings me to the pertinent point of wondering if enough people would be interested in purchasing larger volume units. They appear to sell well in the states but obviously the UK market is a lot smaller. I'm struggling to find any data on the market size and demand.

My rough start up cost would be around £10k (this includes development of the product, manufacture (1000 unit run), safety certification, packaging etc) which would likely be funded by a government backed start up loan (assuming I'm successful in applying). As I would be running this business around my main job I would prefer to sell on Amazon and use their fulfilment service. From crunching the numbers this should leave me around 50% gross profit per unit sold.

What I'm worried about is there just isn't enough demand to make this worthwhile. Unfortunately the minimum production run is 1000 so I can't really test the waters. I'm also worried about any legalities surrounding potential side effects of the product. I'm concerned I do not have any knowledge in cosmetics and fear I'm being stupid even considering this. I do use the product myself (import it from the states) and am confident I can sell the merits of it to the public.

Can anyone see anything obvious I'm missing? The net steps is to arrange a meeting with the manufacturer to discuss my requirements etc.

My envisage for the business isn't ever for it to become a full time project but rather a side hustle. I think I would enjoy the whole process of running the business but perhaps that is just my naivety talking!

Many thanks.

 

[Mr D]

Storage - you pay amazon a fee to store the items. And if stock doesn't sell as well as expected you either recall the stock for a fee or pay a long term storage fee. Of considerable amount.

The product is going to be tested in a lab before you start selling? That takes care of safe to use.
You will need product liability insurance anyway.

Oh and you are missing marketing. Which can be the single biggest cost your business has.

 

[Pezerinno]

Thanks Mr D.

Storage is definitely a big consideration; I need to look in to how much Amazon charge. It may be that it is more cost effective for the manufacturer to ship the product to me and then I ship it to Amazon in smaller quantities.

Yes the product will be safety checked in the lab and I will have all the appropriate certification.

Regarding marketing I was hoping Amazon would take care of a large portion of that in terms of people searching for the product themselves. As I say the product already exists just not in the volume I'm looking to produce. I do plan to set up a website and social media accounts but I'm not sure how much traffic this will generate in all honesty.

Thanks again.

 

[Mr D]

Thanks Mr D.

Storage is definitely a big consideration; I need to look in to how much Amazon charge. It may be that it is more cost effective for the manufacturer to ship the product to me and then I ship it to Amazon in smaller quantities.

Yes the product will be safety checked in the lab and I will have all the appropriate certification.

Regarding marketing I was hoping Amazon would take care of a large portion of that in terms of people searching for the product themselves. As I say the product already exists just not in the volume I'm looking to produce. I do plan to set up a website and social media accounts but I'm not sure how much traffic this will generate in all honesty.

Thanks again.

Yes, certainly don't make the mistake of having a 1000 units of a product sent to amazon direct unless you are selling around 400 a month.
Some unfortunate sellers have had to recall over 950 items a year later at 60p plus vat per item...

Amazon won't market the product outside of amazon, within amazon you can pay them to promote the product based on a pay per click system. Which may help you move up from page 412 to page 300.

 

[fisicx]

Are people searching for and buying this product? If it’s largely unknown in the UK people won’t be searching for it.

Which means you need to do all the marketing. That 10k start up fund could be eaten up in marketing in a couple of months.

 

[Financial-Modeller]

I'm a little confused.

If the product exists, and is sold in quantity across the US, presumable properly tested and licensed, why would you need to develop the product?

Why not simply approach the US company and offer to distribute their product in the UK?

Given that you identify a major risk of competitors copying the product, the US company may be more able to protect their IP than you would?

 

[Pezerinno]

Thank you for your replies.

People are searching for a certain keyword so the assumption (hope?) was my product would come up fairly high on the search results.

I have attempted to approach the US company in the past but had no luck being able to speak to the right people. I can also understand from their perspective they would be hesitant to do a deal with someone who has no experience in the industry.

 

[IsabelaMarga]

Hey there! Starting a cosmetic company sounds like a great idea. It's good to see that you're thinking about the demand for your product and the legalities surrounding it. One thing to keep in mind is researching competitors and pricing strategies.

 

[IsabelaMarga]

and

 

[The Byre]

I have no background in cosmetics!

Ouch! And that's a very big ouch!

My rough start up cost would be around £10k (this includes development of the product, manufacture (1000 unit run), safety certification, packaging etc)

Extremely optimistic - to the point of being delusional (sorry, but launching cosmetic products usually costs millions).

funded by a government backed start up loan (assuming I'm successful in applying).

Talk to @Mark T Jones - but he too will probably tell you that £10k is nowhere nearly enough.

As I would be running this business around my main job

Another ouch!

I do use the product myself (import it from the states) and am confident I can sell the merits of it to the public.

Is this a niche product? If so, target that niche demographic on a one-to-one basis. It'll be hard work, but nothing comes handed to us on a plate!

Can anyone see anything obvious I'm missing?

Yes - talk to someone who understands the UK cosmetics industry - and attend some trade fairs and get to know the market first!

The net steps is to arrange a meeting with the manufacturer to discuss my requirements etc.

No, the next step is to understand the market and to then find your way into that market - if possible.

 

[NorfolkGuy]

Hello, a thought from me is that a white label solution would be a potential avenue for you. I know you said there’s an existing product out there but if the product exists, then there’s a good chance some manufacturer somewhere will offer a white label version. If you have no experience in this industry it’ll be incredibly difficult to break out in this if you’re not actually developing the project in house yourself and have seriously weighty knowledge of processes, regulations and about a million other things.

If you need a brand developing then I can help with that.

 

[MOIC]

What he said . . . . @The Byre

 

[fisicx]

The thread is over 3 years old. I doubt the op is still interested.

 

[MOIC]

What he said!………@fisicx

 

[avsseries]

Starting a cosmetic company can be a challenging but rewarding experience. Here are some things to consider before making a final decision:

1. Market Research: Conduct thorough market research to determine the size and demand for your product in the UK. This can help you assess the potential for your business and avoid over-investing in a product that may not sell well. For example Turkish Tv series have gained a lot of interest in a few past years in many asian and arab countries.
2. Competition: Consider the potential for competitors to copy your product and research ways to differentiate your product from others in the market.
3. Legal Requirements: Familiarize yourself with the legal requirements for cosmetics in the UK, including product safety, labeling, and advertising regulations. You may want to consult with a legal expert to ensure that your product complies with these regulations.
4. Financial Planning: Consider the potential for your business to grow and plan for future expansion. This includes accounting for additional costs such as marketing and staffing.
5. Fulfillment: Consider the cost and convenience of using Amazon's fulfillment service, as well as any limitations or restrictions on product types that they may have.

In terms of your specific concerns, it's not uncommon to have doubts when starting a new business, but it's important to thoroughly research and plan before making a final decision. Consider seeking advice from experienced entrepreneurs or business consultants to help guide you through the process.

Good luck with your decision!