Creating Your Own Homemade Cosmetics Line – Method 2

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Creating Your Own Homemade Cosmetics Line – Method 2

homemade cosmetics

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We have gone through the 9 step method which utilizes private labeling to get your products on the market. Using private labeling can be cost effective but the products tend to be generic. What if you want to produce and sell a product that is completely unique? This is where method 2 of how start your own cosmetics line comes into play. This method will illustrate how to take your homemade recipes and make them into products ready to be sold online.

Method 2- Creating Your Own Homemade Line of Cosmetics

Though this method is more time consuming and requires more investment, it is really the ultimate creative way of realizing your dream to have your OWN brand of cosmetics, and you can even do so without deep pockets. A homemade cosmetics line can turn your hobby into a full- or part-time income producer. If you are working on a limited budget, you do not have to develop products in a lab or facility. Items like bath salts, lip balms, fragrances, soaps, and lotions can easily be created from your own home. Starting with a small focused line, selling online and within your local community and growing your inventory and product line as you gain customers requires less start-up money and makes for a less risky business venture. These 15 steps will give you an overview on how to launch your homemade cosmetic line:

Step 1- Conduct Thorough Research and Educate Yourself

The first thing you need to do is to invest time into research. You need to be well informed about the makeup industry before you can start. You need to truly understand the chemistry behind cosmetics products, the methods for making the most of facial features and the ways in which cosmetics can be used to remedy specific problems, from acne breakouts to dandruff.

more your know, the better the product
more your know, the better the product

Talking to professional cosmetologists is a good way to get guidance towards the necessary research. Taking actual classes with a qualified instructor is an ideal way to obtain hands-on experience, get answers to your specific questions and meet others who have the same interests as you. If you are really serious and want to grow your cosmetics line into a full time major business, then it is highly recommended that you enroll in a college to acquire a degree or diploma in cosmetology. This will give you invaluable in-depth knowledge that you can utilize to further your creative dream. The key is to educate yourself as much as possible. The beauty care industry is trend driven. Stay well-informed about popular ingredients and products to attract customers.

There exists a vast selection of material and books online, at booksellers and at libraries about homemade cosmetics. Thoroughly read and explore the recipes included online and in the books to get an idea of how to proceed and create your own unique recipes.

Whether you choose to focus on skin-care, hair products or makeup, you’ll need to begin by identifying your target market, and their specific cosmetic needs, then decide on a specific and unique product that you will provide to your customers that will fill those needs. There are so many cosmetic products on store shelves and online today that unless you stand out somehow, your product will get lost in the market. As your business grows and feels more robust, you can add new products to your existing one. Until then, concentrate on being the best in one line. Perfect it, build your name and use that to gain the customer base needed to launch more products.

If you have a product idea in mind, but you are not sure whether customers will buy it, you can do some low-cost market research by checking out how similar products sell on websites like Amazon and Alibaba. You can also check-out online makeup forum discussion threads, to see what users are saying, and find out what the current market is concerned about and what they are interested in.

More and more people are now looking for higher value makeup with natural or organic ingredients or convenient packaging. You will find it easier to run a profitable business with a high value cosmetic line than makeup products with a low price point that do not offer significant value to the customer. People want value and if cosmetics are priced right, consumers are generally willing, up to a point, to pay more for it.

Step 2- Build a Business Plan

The fact that this kind of venture requires start-up capital and rigorous planning makes it very important to draft a real business plan. This will be required if you have any aspiration to build a business that can really grow and become popular in the global market. It might very well pay for you to hire an expert to help you draft a workable business plan that can assist you if you need to take a loan from the bank or attract serious investors. Always have a plan and re-evaluate it regularly.

Step 3- Choose a Name and Set Up an Official Company (Corporation, LLC or DBA)

consult an expert
consult an expert

It is always best to consult with business, financial and legal advisors at this point to help you incorporate your business. You’ll need to first choose a name for your company. The name you choose for your business is very important and it will create perception in the market place. Remember that you are completely unknown to the consumer, so ensure that you choose a name that suits the line of business you are going into. Aliosh Sparks, for example, doesn’t really bring up the thought of cosmetics. Search in the US Patent and Trademark database to make sure the name you’re thinking about is not already trademarked. Once you have chosen a name for your company then you should move ahead to legalize it.

You should consult with an attorney for advice about business entities and for assistance filing paperwork to establish your business structure. Apply for a Federal Tax Identification number, and decide on a business entity for your company. Most in-home businesses begin as a sole-proprietorship, and this is often the easiest way to begin, but it can also sometimes be advantageous to establish your cosmetic company as a limited liability corporation, or as a partnership. Discuss the pros and cons of each entity with your accountant, lawyer or business professional. To learn more about different business entities and their tax implications, visit the Business Structure page on the U.S. Small Business Administration website.

Keep in mind, as obvious as it may seem, that your company name and product name that we will discuss in step 11 are not one and the same. Both are important, but your company name is your brand.

Step 4- Make Sure To Get Proper Insurance

Again, consult a legal advisor here to see exactly what kind of insurances you need to purchase. Join one of the online homemade cosmetic making forums to ask other homemade business owners for recommendations on the agents or insurance companies that they use.
Compare quotes from several insurance agents to get the best rates for insurance. These are just some examples of what you might need to purchase-

Property Insurance: Speak to your home insurance agent to see if your homeowners insurance will cover your budding business. Usually, it will not. Once you begin using your kitchen or garage for business purposes, you may risk not being able to make a claim on these areas if a disaster somehow occurs. As you begin acquiring inventory and supplies, you may also want to insure these items against loss in a possible disaster, especially if they are expensive.

Liability Insurance: In addition to protecting your physical assets, you would do well to protect yourself from liability should a customer claim harm or damage caused by use of one of your products. Ask your insurance agent about the availability of liability insurance.

Step 5-Find a Place Where You Will Create Your Cosmetics

Since this is a homemade adventure, and you’re looking to have as little risk and sink in as little capital as possible, figure out where on your own premises (or a partner’s) you wish to manufacture your product, be it the kitchen, garage, shed or some other suitable spot.
Eventually, assuming hopefully that your cosmetics line is a success, you can move out to larger and larger facilities. Those will require significant investments, but one of the benefits of creating a cosmetics line is that you don’t need to locate your production facility on prime central real estate; you can just find a cheaper alternative.

Step 6- Get Any Permits and Licenses Needed to Sell Your Cosmetics

To find authorities that govern businesses in your jurisdiction, refer to the Permit Me tool on the U.S. Small Business Administration website. Your business and legal advisors should be able to help point you in the right direction as well. Contact your local zoning authority to ensure you can run a small manufacturing operation in your home. Arrange your manufacturing space, be it in your home, garage or a shed etc. and have it inspected if your local regulations require it, before you launch your cosmetic line.

get required permits
get required permits

Find out if your county or state requires licensing, and if so, which. Contact your City Clerk to inquire about the licensing that is required to begin. Depending on your location, your city and/or county may require that you obtain a license to conduct business out of your home. This shouldn’t worry you too much though; annual licensing fees are usually pretty low for in-home businesses that do not receive customers at their door.

It is important to note that according to the Food and Drug Administration (FDA), regulation is required by the U.S. Food, Drug, and Cosmetic Act, a law mandating that every cosmetic product and its ingredients be verified for safety prior to going to market, ensuring that they contain no prohibited ingredients. So make sure you check in with them at every appropriate stage to ensure you follow those regulations. Safety comes first always!

Step 7- Buy Essential Equipment to Manufacture Your Cosmetics

equipment is key
equipment is key

The basic equipment you need includes pots, measuring utensils, heat-safe bowls and spoons, glass or metal funnels and a precision kitchen scale, all of which can be ordered online. Most equipment can be obtained fairly inexpensively. Keep an eye out at second hand stores and garage sales for anything that you need. Often, you can find kitchenware that has never been used and would be perfect for production of your cosmetics.

To create your cosmetics, you will need an area equipped with the necessary appliances. Some products, such as bath salts and clay facials, merely require measuring cups, mixing bowls, and spoons for stirring and adding the final product into your choice of packaging. Other products such as soaps, balms and lotions require additional equipment and supplies. If you are manufacturing in your kitchen, don’t forget to store your cosmetic equipment and ingredients as far away as you can from your kitchen items.

Although it is not absolutely necessary, access to a computer for maintaining your business records and creating marketing materials will be invaluable.

Step 8- Buy Basic Cosmetic Ingredients

Try incorporating more organic and natural ingredients into your formula. The trend lately has become trying to be as green as possible, and if your products are all-natural as well as appealing, people will be drawn to them! When you shop for ingredients, try to pick up organic materials such as beeswax, coconut oil, pure jojoba oil, flavored oil, herbs, etc. With these types of ingredients, you can eliminate the chances of people having allergic reactions to harsh chemicals that are often put in beauty products. Purchase ingredients you can find regularly at an affordable price. You really don’t want to start production, only to have to stop it due to a shortage of rare ingredients. You can find many natural oils and herbal ingredients through wholesale cosmetic suppliers, and even on local supermarket shelves. Buy a fridge to store perishable ingredients, such as plant-based oils, separate from where you keep your family’s food supply.

natural ingredients
natural ingredients

When choosing between suppliers, be sure to compare prices. It is important to find a supplier that can provide not only good pricing, but excellent quality on the ingredients that you need, and quality ingredients are paramount here. When comparing prices, be sure to also take any shipping and handling fees into consideration. There are multiple ingredient suppliers online, and they most likely will be able to provide a larger selection of ingredients than you may find locally. Just make sure they always have those ingredients in stock. Many suppliers offer technical help and basic formulation assistance by telephone and e-mail, which you may find useful.

Step 9- Formulate and Manufacture Your Cosmetics

When you think of ideas of what to put in your product, always keep in mind what audience you are aiming for. If you want to sell to the younger audience you might want to add fruity smells and bright colors. If your intention is to sell to the early 20’s and older age groups, you should be prepared with research in what that age range looks for in that specific product. Try to make your line of cosmetics suitable for all skin types; this will increase your customer base.

experiment to improve your product
experiment to improve your product

You will need to experiment with a variety of readily available recipes and learn how to customize recipes and create products that will turn potential customers into buyers. Creating your own formula is a lot fun and the heart of this creative endeavor. Yes, it typically requires a lot of experimenting, modifying, and mixing ingredients; however, once your formula is perfected it will give you incredible pride and satisfaction knowing that you have created something truly unique. You may also reproduce formulas from the ingredient lists of commercial products. However, it is often necessary to modify them to your specific needs.

Always strive for good consistent quality whether you plan to manufacture your products from scratch or modify prefabricated bases. Pay strict attention to stringent hygiene, a clean working space, and proper use and storage of ingredients. Set up quality rules and follow them strictly: ), use only clean and disinfected tools and containers, wear disposable gloves and a face mask, buy only ingredients from trusted sources, use only distilled water (not tap water, keep a log book to record all your batch productions, reserve samples from every batch and label them properly etc. Again, safety comes first!

Eventually, as you grow, if you cannot, or do not want to manufacture your products on your own consider consulting a contract manufacturer. This is especially the case if your business has grown to a size where you have to manufacture large quantities, as large scale production has its own challenges that you might not wish to deal with. If your business moves from a kitchen-based production facility to a more professional level with your own laboratory you must follow the Cosmetic Good Manufacturing Practice Guidelines as required by the FDA.

Step 10- Test the Products Out and Modify If Necessary

Ask your trusted friends and family (maybe even neighbors) to test your homemade cosmetics out for you and give you their honest feedback. They should give you their opinion on what should be added or changed, and you should accept any criticism, because it will only help you improve. You might get different answers, some saying they liked it, some that they didn’t, but just do your best to figure out what, if anything, needs changing. Modify your product as needed and repeat the process till you get the formula just right. If they like the products they are sure to recommend them to others. They will also feel invested in the process with you and be rallying for your success, which can give you a much needed moral and confidence boost.

Step 11- Choose the logo and packaging, and write the label for the cosmetics (See FDA resource for guidelines)

eye-catching logo's will help your product sell
eye-catching logo’s will help your product sell

This is another fun creative part! You should allow your imagination to run wild here. You can hire a professional graphic artist, have a friend help, or create your own logo at websites like Logo Maker. Think of a catchy name that will be remembered by customers. Your product alone might have the customers coming back, but when someone asks a customer the name of the cosmetic product they are using you don’t want them to say: “Oh, I can’t remember the name, but it is pretty great.” Think of a name or word no other brand has out already for such a product. You want to have a business name and logo that grabs attention.

While you want a name and design that stand out, you also want to make sure that shoppers can easily understand what the product is and the benefits it provides by reading the label.
Once you’ve made sure your name and logo are available and aren’t in use (or trademarked) by anyone else, the information that should appear on your product labels includes the net weight, volume and list of ingredients. Carefully review the Cosmetic Label Guide on the U.S. Food and Drug Administration website to ensure that your product labels include the appropriate information.

Purchasing cosmetics is usually an emotive purchase. Packaging is often referred to as a silent salesman; its use is critical within any marketing plan, whether it responds to existing market needs or whether it opens up new markets. Research has shown that over 50% of customers bought a certain brand only because they were drawn to the packaging.

You could go all out using a custom-designed container with silk-screen printed labeling, packed in a multi-color printed carton box, and fully wrapped in cellophane, but this would be really expensive. I suggest finding a good compromise between high-end packaging and modest looking homemade packaging. You don’t need to look expensive, just eye-catching and interesting. And don’t forget that, besides the design, cosmetic packaging needs also to be functional, practical, and made of a good quality (no leakage, no plastic scent, no breakage during transport etc.).

The internet today really makes packaging and design much easier for home-based entrepreneurs. You can find wholesale packaging suppliers online for items like bottles, jars, lip balm tubes and plastic containers. The container shape, design and size are important too, as it is what your customer will generally notice first. Before buying a container in bulk quantities (typically in the thousands) first buy a few single containers of various sizes, designs and materials and only decide then which containers fits your needs best.

Step 12- Get the Product Name, Brand and Logo Trademarked

trademark to keep your brand safe
trademark to keep your brand safe

Now that you have your Name, Brand and Logo, it’s time to get them trademarked or patented. You should not sell your product without getting it trademarked as your own. This will prevent people from stealing your name, logo, etc. You can try to get your formula patented as well, but getting a patent for your small cosmetics business is generally a waste. Here’s why:

Cosmetic patents don’t prevent copycats: While you might believe your formulation is completely unique and new to the world, it most likely isn’t, that is how many products are available globally. Besides, it is really a simple matter for a cosmetic chemist to start from an existing formula and recreate something that works just as well. If you have a patent, this provides little obstacle for the chemist. Making something that does not violate the patent but works just as well is as simple as substituting out one ingredient for another that has the same (or nearly the same) properties.

You can better utilize your money elsewhere: Getting a patent on a cosmetic product can cost you tens of thousands of dollars. It can take a long time and at the end of the process, as mentioned above, it doesn’t offer you much protection from the competition. While cosmetic formulations are what make cosmetics work, it is very difficult to stand out through your recipe alone. There are plenty of nicely formulated products out there that never get any sales because they fail in their branding and marketing. If you have extra cash lying around, don’t spend it on patenting your formulation. Spend it on building your brand.

Although you might not get a patent, you should still store your recipe in a safe and private area that only you have access to. Why make it even easier for copycats?

Step 13- Figure Out a Pricing Structure That Will Generate A Profit

There is no exact science to work out a precise price for your product. Do your research and utilize the information below to help you find an approximation.

how to figure out your pricing structure
how to figure out your pricing structure

Find the market price: Locate half a dozen other sellers who are selling cosmetics similar to yours and find the average price, this will give you starting point.

Factor in materials, labor and overhead: If your price includes only material costs, you’re not paying yourself for your labor costs and the rest of your overhead. For labor costs, think about how much you want to pay yourself per hour or how much you would pay someone per hour to make your products and divide that number by how many products you think you can make per hour. If an hourly wage is not what you want to measure, then think about how much salary would want to pay yourself per month (or per year) and use that number instead of the hourly rate. Your overhead covers expenses like tools and equipment, business insurance, utilities, packaging, etc. If they are not accounted for in your product prices, they can really eat away at your profits and your ability to grow your business.

Think about a wholesale price: You likely won’t be able to accept wholesale orders at first, but if you don’t build that factor into the original price of your products, you will not be able to grow your business to a point where you do accept wholesale orders without significantly increasing your retail prices, and if you do that, consumers can get scared away.

This is the simplest formula you can use:
(Labor + Materials) x 2 = Wholesale price. The x2 takes into account your profit and overhead as well, so you’re covered.

When you’re ready to sell to retailers, keep in mind that retailers will usually mark up your wholesale price at least x2.To set your retail price, use this formula: Wholesale Price x 2 = Retail Price.

Using a craft pricing formula is a good starting point to determine how much your items should sell for. It isn’t the only factor you should look at when determining price, but it can give an approximation to strive for to make a real profit.

Step 14- Write-up Product Listings and Marketing Material, and Advertise Your Cosmetics

As you probably noticed while researching, many online sellers don’t have great product listing, yet still sell well. Can you imagine how many more units they would sell with well-written listings? This is your chance to set your product apart and mark your brand as high-quality and informative. To produce a strong listing, have a clear title, a well-written description and bullet points highlighting the best points of your product.  Use high quality images, explain how the product works and how the customer can benefit from it, and what sets it apart from the competition.

make your product write-up stand out
make your product write-up stand out

You can begin marketing your cosmetic business by having parties to show off your line. Create a catalog or flyer that details your products, and provide copies to everyone that you know. You can offer free facials. Set the facials up by appointment and use this as an opportunity to gain new clients. By offering special discounts and coupon offers repeat clients will play a major role in building your business. Spread the word via social media and maybe place an ad in local newspapers. You can also contact editors at local newspapers about your product and ask them to write a feature article about your company.

Create a website for your cosmetics line. Include original content about your products and your beauty care vision. Have detailed information about your prices and ordering process. Add shopping cart functionality and shipping rate information to your website if you plan to sell directly to buyers online. Invite wholesale buyers to contact you for price quotes.

If there are nearby farmers’ markets, rent a table at one to introduce your product line. Invite shoppers to sample your products, and have a supply of sample-sized products to distribute. Visit the spas, gift shops and health stores in your area. Bring samples of your products and offer to sell your products to them wholesale. Another way to spread the news about your business is to hire sales representatives or affiliate marketers.

Step 15- Set-Up a System to Ship the Cosmetics to Customers

Like with the Private Labeling method, the most reliable, convenient, and money saving system to use is the FBA (Fulfillment By Amazon) system, where Amazon handles the fulfillment processes, meaning they will take care of the storing, packing and shipping once the items sell via their site. Why deal with this extra logistical nightmare if you do not have to? Since you are utilizing the FBA, you can also lower your online price at make your product even more attractive to potential customers.

get your products where they need to go
get your products where they need to go

Check out Amazon’s guide for getting started, to read detailed information on how to setup an FBA listing, how it works, pricing, success stories, and more. Once you set up your listing and ship your products to the Amazon distribution center, you can to be as hands-off as you’d like. This too is a wonderful benefit. When a customer makes a purchase, you don’t even have to do a thing. The FBA system takes care of everything, including returns and customer service issues. The FBA does take a small percentage of your profits, but it is well worth it for most sellers, especially newbies. Your shipping costs are included in the fees and your products automatically become eligible for free Prime shipping, which could help you make more sales.

Conclusion

This article provides an overview of the basic requirements needed to begin your own cosmetics business from home. With so many rapidly changing aspects in our world, no article is complete, and you must constantly keep on researching, remain abreast of emerging trends and educating yourself. Whether you use a private label company or start your own homemade cosmetics company you’ll undoubtedly need to hire employees. No matter how amazing you are, you cannot do it all alone. Hire people who excel at what they do and let them do it. Don’t micromanage. It is important to learn how to delegate, for your own physical and mental well-being. Prioritize and balance between the details and the big picture, and don’t forget to step back now and then to clear and refocus your perspective.

In order to stay on top of your sales, expenditures, profits and inventory, it’s important to keep proper records. It is also necessary so that you can properly report and file your taxes. You can find a selection of small business accounting books, or more likely you may wish to obtain an accountant who can advise you on the proper method for bookkeeping. Your accountant can also advise you on how to maintain a record of your inventory and expenditures. Contact your state government to learn what you are required to do to collect and submit sales tax for sales made to residents of your state. Staying on the up and up will keep you out of trouble.

Lastly, it is important to note that starting your own cosmetics business, like any venture, cannot guarantee success. You must be ready to plan, work hard and wait for a while before you hopefully reap profits. Follow your dreams and passions and give it your 100%. Have a vision of where you want to see yourself and figure out a course to take you there. Don’t take no for an answer. If one door closes, look for a back door or a side door. Have long term goals – and mini goals. Don’t get overwhelmed – it won’t happen overnight. The good news is that once your product begins spreading and gaining popularity in the market you can essentially relax and enjoy watching as the profits begin to come in.

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