According to market research data from Common Thread, the global beauty industry was worth $511 billion in 2021, with expectations that it will grow at a compounded growth rate of 4.75% to stand at between $700B-$800B by 2027.
The data shows that the skincare industry was worth $136B in 2019, with expectations that it will expand and hit $169B by 2025.
These statistics show that the beauty industry is a ripe market for enterprising business owners.
Today’s post will walk you through how to set up a private label skincare business.
Let’s get started:
目录
Step 1: Identify Your Niche And Choose Profitable Skincare Products
The first step to starting a successful private label skincare business is to conduct thorough market research to identify and choose a niche with profitable products you can sell within that niche.
Here are a few fundamental niche approaches you should not overlook. These include:
a: Identify your audience
Identifying your audience is vitally important because it lets you develop a clear idea of which products to carry and market, positioning your private labeled skincare brand for success.
Although trends are changing, thanks in part to the growth of the non-gender-specific skincare market segment, traditionally, you cannot go wrong with the most affluent consumer market segment: millennial women aged between 35-54. Women in this demographic buy and consume more beauty and skincare products.
However, with that said, you cannot go wrong by targeting an expanded audience demographic of women —and men— aged between 18-60, but do your due diligence and conduct thorough market research to identify an ideal target audience.
b: Look for trending skincare products
Although trends change as rapidly as they come and go, you can use prevailing and incoming trends to find a niche and choose profitable skincare products you can sell to your target demographic.
For example, research skincare trends like microdosing, refillables, streamliners, facemasks, blue light protection, postbiotic skincare, and fermented skincare, to mention a few, to determine if these trends have products that would do well with your target demographic.
When using trends to determine niche and product profitability, focus on the curve: how sustainable the interest in a product or niche is over time. Avoid trends with too many interest fluctuations and instead focus on those that show stable growth.
Using tools such as Google Trends is the best way to research trends —more on this later.
c: Search for winning skincare products
As mentioned above, you can use tools such as Google Trends to research trends to choose a niche and find profitable skin care products.
Let’s use a few examples to elaborate on how you can use various tools at your disposal to search for and find winning products in the skincare industry.
Google Trends
Google Trends is one of the best trends-research tools in the market. It allows you to determine interest in a search term over time. For example, let’s say you want to decide whether or not to private label anti-aging skincare products.
In this case, we would go to Google Trends and search for the term and topic.
NOTE: Searching on Google Trends using “topics” instead of terms will give you a broader perspective of interest within that niche. On the other hand, using search terms as your parameter will show you word matches for the search term, allowing you to see how you can create an effective content marketing strategy.
From the above screenshot, we can see that the topic “anti-aging cream” has had a steady interest over the past five years, making this a good niche to get into with private labeled anti-aging creams and related skin care products.
NOTE: Ensure you change the parameters to suit your needs. For example, if you want to target the US, UK, or Asian markets, toggle from worldwide to your select location and your preferred time frame.
Amazon bestsellers list
The Amazon bestsellers list is another great place to find winning skincare products that you can carry under your private label brand —and fortunately, using it is relatively easy.
To use this approach, search google for the keywords “Amazon bestsellers,” then select the first option:
Selecting this option should take you to the bestsellers page. Once there, since skincare is your interest, select the beauty and personal care category:
Once you select this category, it should reveal sub-niches within it, and you can then select skincare from the list of sub-niches.
Under the skincare category, you can find other sub-niches that you can choose to venture into, depending on the audience research you have done and what it has revealed:
When using the Amazon bestsellers list to find winning skincare products, the rule of thumb is to search the top seller list for repeat product types. For example, if there are more than three occurrences of facial cleansers or moisturizing creams, this is a good indicator that such products are doing well on the market.
Amazon’s bestsellers list is one of the best ways to find winning skincare products in different categories within the skincare industry.
Amazon Movers and Shakers
Amazon’s Movers and Shakers list is home to products that have done very well —sales-wise— within the last 24-hours, making it a good trend research tool —but ensure you use it with other research tools too.
Using this list is similar to using the bestsellers list in the sense that once you land on the Movers and Shakers homepage, you will then use the options on the left-hand side to narrow down to the beauty and personal care niche:
From there, you will then look over the product list, trying to find overlaps between similar products. For example, research showed that eyelash care products were doing exceptionally well at the time of writing this article.
While these are not the tools you can use to find winning skincare products, they will give you a broad list of possibly profitable products you can research further to determine if they align with your audience research.
After doing your due diligence and finding various winning products, you can move on to the next step, which is:
Step 2: Search For Reliable Private Label Skincare Products Suppliers
We shall briefly cover the key things you need to focus on to find a private label supplier who will support your business.
a: How to Find Skincare Product Suppliers
You can use the following approaches to find reliable product suppliers in the beauty and skincare industry:
1: Use Google to find domestic and international wholesale suppliers
Google is probably the best way to find reliable domestic and international wholesale suppliers.
By being deliberate with your search terms, you will get a broad list of suppliers you can research further and reach out to for your private label skincare product needs.
Use the following search string to find such suppliers —without the quotes:
“[your product/niche] + wholesale/private label suppliers”
For example, if you want to private label anti-aging creams, you can search for:
“Anti-aging cream + wholesale suppliers”
The great thing about using this search string is the capability to narrow your search to a particular location. For example, if you want to find suppliers in the United States, you can modify the search query to “anti-aging cream + wholesale suppliers in the USA.”
2: Work with a professional dropshipping agent
If you want to be a bit more hands-off with your private label skincare brand, your best bet is to work with a professional dropshipping agent.
Professional dropshipping agents like Bestfulfill can handle everything you need, including finding suppliers, sourcing, warehousing, custom branding, order fulfillment, shipping, and even customer support.
3: In-person research
If you want to work with local suppliers, in-person research is the best route. You can local Google search strings like “private label skincare suppliers + location” —for example, “private label skincare suppliers + Miami”— to get the contact details of these suppliers, then speak to them directly to get answers to all your questions.
4: Referrals
Referrals are another great way to find reliable private label skincare suppliers. All you have to do here is find someone or a business that deals in privately labeled skincare products, then ask for referrals to their suppliers. Most business owners will be more than willing and accommodating.
5: Tradeshows
Tradeshows are another great place to find reliable private label suppliers because they bring together exhibitions from different manufacturers, suppliers, wholesalers, and distributors.
You can use the Google Search string “private label tradeshows + location” to find such tradeshows in a specific area —perhaps your local area.
As you create a long list of privately labeled skincare products suppliers, you need to keep a few key things in mind:
What to pay attention to when choosing a private label skincare product supplier
Here:
Adherence to regulations
First, leave no stone unturned and do everything in your power to ensure that you only work with suppliers who adhere to established regulations. For example, if your target has country-specific regulations about skincare products, only work with a supplier who meets these standards.
Additionally, only work with suppliers who adhere to the highest quality standards, including material sourcing, to ensure that you get the best products possible.
NOTE: Remember that regulations and standards are country-specific, so pay special attention to the regulations in the country in which you want to launch your private labeled skincare brand.
Request samples
If you don’t ask for samples, you won’t get a hands-on idea or feel of the final product. Only work with suppliers willing to send you samples —preferably free ones_you only have to pay for shipping_ for a personal review.
After finding a reliable supplier, you can then focus on establishing your private labeled skincare brand, which is the next step:
Step 3: Design Your Branding, Logo, and Packaging
This step is all about creating the brand you want to take to the market. The step involves creating mockup designs for your brand, logo, and final packaging options.
Here, it’s best to:
a: Conduct competitor research
Use the products you want to sell —from the previous step— as a basis for competitor research. Ensure that you pay special attention to how your competitors brand their products and packaging and seek to differentiate yourself, but within reason.
For example, if you discover that most competitors offer pump bottles for creams and lotions, don’t stray too far away from that, no matter how much you want to differentiate your brand. At the same time, don’t be afraid to venture down the least trodden path if you have sufficient evidence to back up your ideas.
b: Start with the logo
A well-designed logo makes it easier to create, market, and grow a household brand. Additionally, starting with the logo will allow you to see how the logo will appear across different packaging options, which will give you a chance to tweak things before going into final production.
Fortunately, you can use free logo generators, like Canva Logo Maker, Looka, and Free Logo Maker, among others, to generate a free logo. If you want something more custom and professional, you can also outsource the logo-creation process to capable freelancers on Fiverr, Upwork, 99Designs, etc.
c: Keep the packaging simple
While you should make your brand as unique and as memorable as possible, remember not to overdo it or overdesign your packaging. In the skincare industry, simpler, cleaner designs are usually better.
For example, simple but intricate line drawings, brand names in custom fonts, and eye-catching patterns are modern skincare product packaging trends doing well in the market.
d: Brand and packaging consistency across the board
Consistent branding across the board gives your skincare brand a familiar, memorable feel. Ensure that your brand has a consistent logo, color scheme, and quality across the board, no matter how many products are in your line.
Also, ensure your brand messaging remains consistent across all products, web pages, online store, and customer support.
After designing your brand, the next key step involves deciding where to sell your private labeled skincare products:
Step 4: Decide Where to Sell Your Skincare Products
Here, you have a few options:
- In-store: You can open a physical store. The beauty of this option is that you can couple a physical store with an online one —online sales— for higher marketability. The downside is that you need capital to set up a branded brick and motor shop.
- Set up a website/online store: This option is ideal because, to create a robust website, you only need a domain name, hosting platform, and a capable theme, all of which probably won’t cost more than $100, including purchasing a premium theme. Creating a WordPress site is also easy, and you don’t need to spend a lot of time and money on creating a website or online store —you can also contract a capable web designer to do the work.
- Amazon/other online platforms/social media: If you don’t want to set up a website or physical store for your skincare brand, you can also sell them on platforms like Facebook and other social media platforms like Instagram, Amazon, eBay, and others. You can even run Google and search engine ads. The downside to this option is the minimal control —because you’re using platforms owned by other people and businesses.
The fifth step is all about choosing your order fulfillment strategy:
Step 5: Choose Your Order Fulfillment Strategy
Choosing an order fulfillment strategy that suits you/your business is one of the most important steps. After all, if you don’t have a system that ensures your customers get their products processed, shipped, and received in good order and time, you will hemorrhage customers faster than a sieve can sieve water.
You can consider several options:
a: Dropshipping
With this option, you either work with a supplier who offers dropshipping services or hire a third-party dropshipping agent who will handle everything, including product and supplier sourcing, branding, warehousing, order fulfillment, and even shipping.
Some professional dropshipping agents have such well-established and effective systems that they can even offer customer care services and a host of other services that can make operating and growing your skincare brand a breeze.
The advantage to this option is that it’s very hands-off, allowing you to focus on what matters the most: marketing and growing your skincare brand, and closing sales.
b: In-house order fulfillment
This option involves setting up a fully-fledged order fulfillment center, a central location where you can warehouse products once you get them from your supplier, and from where your team can individually process, package, and ship out orders to customers.
While this option gives you the most control over order fulfillment, setting up a fulfillment center and the related processes can be costly, demanding lots of capital upfront, complicating and lengthening the getting-started process, especially for lean startups.
c: Outsourced fulfillment
If you don’t want to work with a professional dropshipping agent or set up an in-house order fulfillment center, outsourced fulfillment is your best option.
This option involves outsourcing the order fulfillment process to a third-party company that handles warehousing, order processing, and later fulfillment and shipping. AmazonFBA is the best example of outsourced order fulfillment.
The beauty of this option is that it’s as hands-off as the dropshipping and very well streamlined. For example, the AmazonFBA system has clear guidelines for preparing and shipping orders to FBA warehouses.
With your skincare products and order fulfillment process in place, you can tender your first order to your supplier:
Step 6: Place Orders From Your Supplier
Your fulfillment model will determine how you order products and how many products you order. For example, if your supplier offers dropshipping services, you can order products as you get customer orders.
For in-house and outsourced fulfillment, you will have to order products and have them shipped to your warehouse or the warehouses of the third-party order fulfiller.
No matter which option you choose, keep the following in mind when placing orders from your supplier:
- In most cases, you will need to pay for private label skincare products upfront, meaning you will need a credit card or a capable way of making online payments.
- Get accurate product, packaging, and label printing fees.
- Know all relevant turnaround and delivery times offered by the supplier by heart.
- Ask your supplier about returns and how to handle them.
- Ask the supplier about temperature requirements, product shelf-life, expiration dates, and any other relevant information.
The final step is:
Step 7: Market Your Private Label Skincare Brand
Once all your systems are in place, you can full-throttle your marketing plan. If you don’t have a marketing and branding plan, now would be a good time to create one.
Importantly, create a marketing plan that employs the following marketing approaches:
- Giveaways: Giving away sample products is one of the most effective, underutilized marketing strategies. Giving potential customers free products samples can convince them to buy, even when the product was not on their purchase list, and turn them into brand ambassadors.
- Email marketing: If you have an online store/website, create an effective sales funnel that allows you to use various email marketing strategies to nurture leads and turn them into customers. For example, ensure your marketing and sales funnel has a cart abandonment layer that lets you know which customers have left skincare products in their carts and sends them automatic reminders and nurturing emails —perhaps even discounts.
- Testimonial marketing: Testimonials are another underutilized but highly effective marketing tool. Asking current customers to leave feedback on products they’ve purchased can give new customers the confidence they need to believe in your product and finally purchase a product, winning you a customer and possible brand ambassador in the process.
- Social media marketing: I know I don’t have to tell you how effective social media is as a marketing tool or channel. Use it by running social media ads, running promotions and giveaways, offering customer support over social media, and other innovative ways.
- Paid ads: If you want to get faster results without waiting for your organic marketing —things like blogging and organic social media reach—to bear fruits, consider running paid ads on Google—and other search engines—and on social media platforms like Instagram, Facebook, and Pinterest. However, ensure you have a well-thought-out PPC advertising plan.
- Use in-store marketing strategies: Even if you intend to run an online-online —no physical store— skincare brand, don’t shy away from using in-store marketing ideas like in-store displays, in-store events, and trade promotions. For example, when you launch a new skincare product line, you can talk the management of a busy mall into letting you host trade promotions or display promo/discount banners.
These are by no means the only marketing tools or ideas available to you. You can use other marketing strategies to market your skincare brand. All you have to do is create an effective marketing plan.
Conclusion
To recap, the only thing you need to start a private labeled skincare brand is:
- Identify your niche and find profitable products within that niche —we discussed how to do this using various approaches
- Find reliable private label skincare products suppliers, which we discussed at length
- Design your brand elements, including a logo, brand colors, and ideal packaging
- Choose a selling medium, with key options being in-store, setting up a website/online store, or on other mediums like Amazon and eBay
- Choose a reliable order fulfillment process
- Place your orders from your supplier, keeping in mind the various ideas we discussed, and
- Market your private labeled skincare brand to grow the business.
These 7 steps are all you need to start a private label skincare business.