By: Diana Winter
Finding an Idea
One day, Megan Cox awoke to discover that she had made $10,000 in sales overnight. At that time, she was a student at the Massachusetts Institute of Technology (MIT) and had just launched a skincare line under a new brand called Amalie Beauty – her first venture into entrepreneurship.
Over the next few years, Megan successfully developed her brand into a six-figure business. But even while her eyelash serums and facial oils were continuously selling out, she was losing interest in running a direct-to-consumer skincare brand. She was at a crossroads: to expand or sell.
Megan decided to sell, shifting her focus to another skincare project she had been developing on the side. This business is Genie Supply, a clean beauty lab that creates products for hundreds of founders who started in the same way Megan did – with an idea and a passion for skincare.
Now, with experience in direct-to-consumer retail and manufacturing, Megan has no shortage of advice for those curious about starting their own skincare line. Here, she shares the hard-learned lessons she picked up along the way and tips on everything from branding to finding a skincare manufacturer.
How to Start a Skincare Line in 11 Steps
Just start (even if you don’t feel ready) do your research find your skincare niche invest in your skincare brand utilize available resources experiment with formulating and manufacturing skincare products yourself develop a relationship with a skincare product manufacturer conduct rigorous testing of your skincare formulations understand safety and labeling laws in skincare build trust with your customers through transparency and content capitalize on what makes you unique
Establishing a skincare brand means researching topics like basic chemistry, production standards, and ingredient sourcing. You may also need to invest a significant amount upfront.
But starting on a limited budget is possible, as Megan found, if you’re passionate and creative. Here’s how to start a skincare line from scratch, with the lessons Megan learned throughout her journey in beauty.
1. Just Start (Even if You Don’t Feel Ready)
The global skincare industry is expected to reach $183 billion by 2025. Much of the growth in recent years can be attributed to independent brands. “Traditional brands – Estée Lauder, L’Oréal – still aren’t growing,” says Megan. “Independent beauty and clean beauty are carrying the growth of the entire beauty industry.” Traditional brands, like Tarte, a natural cosmetics brand started in a one-bedroom apartment by founder Maureen Kelly in 1999, interacted with Sephora in 2003, made $12 million in 2008, and sold most of its shares in 2014 to global beauty company Kose. Maureen started with $18,000 in capital.
When researching how to start a skincare line, remember to consider production time. Developing a skincare product takes at least 12 weeks. However, most skincare lines require much longer for research, development, testing, and marketing. Skincare products also require thorough testing, which takes time.
With skincare trends evolving quickly, it’s better to seize a great idea now rather than wait until everything is perfect.
2. Do Your Research
Research
The market is very important in the beauty field – the industry is saturated and trends move quickly. However, the constantly evolving landscape means that there are still opportunities for newcomers to start skincare lines. Keep an eye on trends by following beauty publications and influencers, and use a tool like Google Trends to validate your ideas.
“There is a very big shift in how people are spending their money as the new generation grows,” says Megan. “There are lots of opportunities for innovation.”
When Megan developed her skincare brand, she ordered every top-rated lash enhancer on Amazon. She also studied the MIT research database and found that essential fatty acids show promise in studies, but there was no other company using them in lash products at that time.
Megan said, “I have some background in chemistry, but really, all the research is out there. There are so many smart people online sharing information for free.”
Your research should include a competitive analysis, market research, and keyword research to determine the viability of your idea. This is also the stage where you’ll want to crunch the numbers: how much will it cost to start the business and how will you fund it?
3. Find your niche in skincare
Where new skincare line founders can win is in identifying audiences that current brands in the market haven’t served. There is no clearer example of this than in cosmetics, where indie brands have led the charge in the inclusive beauty movement for a wide range of skin tones.
It’s crucial to monitor trends as they emerge, but beware of fleeting trends and ensure you have a sustainable plan. “Recently, I’ve noticed people latch onto any hot ingredient at that moment,” says Megan. While the product development cycle has accelerated in recent years, it can’t always keep pace with fleeting trends. “You’re already four months late,” Megan tells those customers. “By the time you actually get to market, that trend may have passed.”
Innovation, rather than jumping on the bandwagon, is how indie skincare brands can avoid these pitfalls. While traditional brands target a broad audience, indie brands have the ability to connect with a targeted audience or address a specific issue – and issues change much less than trends.
If you want to go broad or stick to the basics in terms of formulation or product type, you can rely on a strong philosophy and brand story to resonate with your audience. “If you’re going to formulate in a certain way or exclude or include certain ingredients, you need to be really thoughtful about that,” says Megan.
Responding to the growing demand for cruelty-free and vegan products is a common way to find an opportunity in the skincare market. Natural products can also target the skincare market.
Other trends and niches in skincare include: skincare for specific skin conditions (like oily skin, eczema, dry skin, or rosacea), adaptive skincare (like ingredients that respond to your skin’s needs), multi-use products (like body and face moisturizers), cosmetic skincare products (like creamy blush with moisturizing properties), innovative products (like hydrocolloid patches, concentrated skin vitamins, home spa tools), targeted skincare for specific audiences (like cancer survivors), hot ingredients (like retinol, probiotics, hyaluronic acid), simple formulations that exclude common allergens or are offered at lower price points (like organic ingredients, natural ingredients, clean cosmetics).
4.Invest in Your Skincare Brand
Before you even think about developing products, decide what you stand for. You can develop your skincare brand and build an audience before you create products or launch an online store. This period will allow you to learn about your audience, gather feedback, and build trust. Use this time to refine your brand story and generate excitement around your upcoming launch.
Megan assumed her customer persona would look like her: younger people with natural lashes that had been damaged by eyelash extensions or their hair pulling disorder.
Similarly, her products attracted another audience.
Megan said, “We discovered that it really resonates with older women and people who have just gone through cancer treatment.” “I never expected that at all.” She embraced this unexpected market and actively supported cancer survivors by donating one product to a cancer survivor for every bottle sold during the campaign.
This branding and marketing shift was made possible by the size of Amalie, but it is crucial to define a few key elements early on. Maintaining a consistent brand voice and presence can enhance market recognition and build trust.
The visual identity of the brand is also extremely important in the skincare industry. Enticing packaging that speaks to your target audience gives your brand a professional edge. Be sure to develop a clear set of brand guidelines to ensure that wherever your brand appears, it adheres to a set of rules.
5. Utilize Your Available Resources
Megan said, “I had no money or experience” when she decided to start a business. Her initial investment was exactly $1,812 (ten times the original startup costs of Tarte) – every penny she had.
Megan established the company for $700, purchased 500 bottles and a few boxes, and paid for her first month on Shopify. She had only $6 left in her account.
With no money left for marketing, Megan had to be creative. She went to an online forum for cancer survivors, which resulted in a few sales. But the turning point was when she contacted a local newspaper in her hometown, where she was interviewed, leading to a few more sales, but the breakthrough came when the story was picked up by the local newspaper and the press association. “I went to sleep, and when I woke up, we had $10,000 in sales and our products were sold out,” she says.
When starting your skincare line, look for creative ways to leverage your funds, whether that means starting your business from home, experimenting with organic marketing ideas, or self-funding your growth.
6. Experiment with Formulating and Manufacturing Skincare Products Yourself
There are a few ways to formulate products: handmade at home, renting a dedicated manufacturing space, working with a lab to create custom products, or taking a white label or private label approach with a cosmetics manufacturer. Creating a skincare line at home
Simple formulations like facial oils can be made at home. However, to manufacture cosmetics in the U.S., you will need to follow the FDA’s guidelines regarding ventilation, air control, and surfaces. While your manufacturing operations must comply with FDA standards, there is flexibility for businesses that produce their products intermittently. Portable cleanrooms – which are pop-up tents – are designed for this purpose and are perfect for small businesses.
Megan said
Megan: “If you start small, there is value in working with the ingredients personally and trying to figure that out.” “But at some point, you will need to work with a manufacturer.” Many successful beauty founders, like Melissa Butler of The Lip Bar, started their lines from their own kitchens and transitioned to a manufacturing facility as they grew.
Working through formulation yourself will help you understand the properties you are looking for in the formula – consistency, appearance, and scent – which equips you to engage in conversations with your manufacturer.
7. Build a Relationship with a Skincare Product Manufacturer
During her first business venture, Megan worked with manufacturers in the U.S. and China. There are pros and cons to each, depending on production size and how close you are to the process. Megan spent a lot of her time in China, overseeing production. “I wanted to know where my ingredients came from. I wanted everything documented. I wanted to be there,” she says.
Megan has softened her stance since then. “I think it’s important to negotiate all quality control checkpoints and be very straightforward about what you expect,” she says. “But at some point, you need to trust the manufacturer to do their job. You can’t nitpick every little point or argue about everything.”
Megan says, “The beauty industry overall is a black box.”
While there are benefits to working with manufacturers in China, like price and available options, Megan and her partner moved Genie Supply to the U.S. to help bring the manufacturing process closer to their clients and improve the overall experience.
Megan says, “The beauty industry overall is a black box,” and she had to learn things the hard way. For that reason, her new company invests resources in educating their clients and providing transparent information directly on the site. If you are new to skincare, look for a manufacturer like Genie Supply that can help you through the stages of the process.
8. Conduct Rigorous Testing for Your Skincare Formulations
Megan learned the hard way that testing at every stage is crucial. While the formula for Amalie’s products was tested and packaged, when the ingredients interacted with the packaging, the result was catastrophic. The product turned out to be incompatible with the glue, and the brushes fell apart. “Packaging was a huge issue for me,” Megan says. “I lost many of my clients because it was unreliable.”
Experienced laboratories are assets for beginners in the industry. Manufacturing in North America can be more costly, but the upside is access to factories and the ability to participate in the testing process.
9. Understand Safety and Labeling Laws in Skincare
Like starting a food business, starting a skincare business carries risks – you are making products that could potentially harm people. It’s important to learn about preservatives, shelf life, allergens, storage, and proper handling of skincare products. And to research labs carefully so you know you’re working with a partner who is well-versed in these areas.
Product Shelf Life
Customers often expect products labeled “natural” or “organic” to be free from chemical preservatives. However, omitting preservatives can significantly impact stability. When Megan launched Amalie, her products had a shelf life of 12 months.
When her distributors couldn’t move the product quickly enough, Megan was obligated to compensate for the expired units because it would affect her brand if she didn’t. “It cost me a lot there, but I wouldn’t let anyone get a bad product with my name on it,” she says.
No
Someone is checking on you. You need to do your due diligence and ensure that you are following FDA classification laws. Meghan Cox
Classification Laws
Legal requirements can be confusing for those starting a skincare line from scratch – every country or region has its own laws. Meghan, who had experience navigating these laws on her own, struggled to develop a visual guide on the Genie Supply site to help her clients. “I would have killed for a guide like this five years ago,” she says. “That’s why I made it.”
A reliable lab can help ensure that packaging meets standards and that products are properly labeled, but ultimately the responsibility falls on you. “No one is checking on you,” Meghan says. “You need to do your due diligence and make sure you are following FDA classification laws.” Or talk to a lawyer.
Reliability and Safety of Skincare Products
While it is possible to experiment in skincare from your home, there are limitations. “If your products contain water,” Meghan says, “you are putting your clients at significant risk.” Genie Supply and other reputable labs will conduct rigorous testing on ingredients and formulations to ensure they are free from yeast, mold, bacteria, and fungi during the product’s shelf life and use. “We also conduct microbial and viral pathogen testing,” Meghan says. “If you are doing anything that involves water, don’t be silly – work with a lab.”
Business Licenses for Skincare Brands
There is no need to obtain a federally recognized license to sell cosmetics and homemade skincare products in the United States. However, the FDA carefully regulates this industry and requires you to get approval for certain ingredients. Laws vary depending on the country where you manufacture and sell your products. Be sure to do your due diligence or consult a lawyer.
10. Build Trust with Your Customers Through Transparency and Content
The beauty customer, faced with conflicting information and many choices, tends to be discerning and skeptical by nature. Building trust with your audience is essential for creating lasting relationships and securing repeat business.
Under the Fair Packaging and Labeling Act in the United States, the FDA requires manufacturers to list every ingredient in their products. This is something many skincare brands are trying to…
Source: https://www.shopify.com/blog/204910217-business-lessons-from-a-6-figure-beauty-brand
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