Working With Private Label Cosmetic Companies 101: Challenges and Opportunities

private label cosmetics being tested 

Making a name for yourself in the beauty industry is no easy feat. With the growing competition and crowded markets, retailers should find a unique edge. Engaging with the best private label cosmetics gives you that kick in the right direction. It’s about supplying your consumers with quality products they can depend on.

Of course, working with private label beauty manufacturers is not without its challenges. But, when you evaluate these challenges, you can make the most of your private label makeup packaging. Beauty brands that have yet to establish a solid client base can highly benefit from hiring a cosmetic private label manufacturer.

Adonis MFG are some of the best private label manufacturers, providing cosmetics manufacturing for all sorts of businesses. We are a cosmetic supplier that focuses on both quality and quantity, supplying retailers with product lines they can rely on.

If you want to know more about the challenges and opportunities you’ll face when working with private label cosmetics, then you are in the right place. Here we listed both the advantages and disadvantages that are tied with private label cosmetics USA. So you will know exactly what you are getting yourself into.

Key Facts

  • The demand for personal care products has brought private labeling into the spotlight.
  • Global sales of private labels in personal and beauty care are on the rise, increasing by 1.4% (1) in 2017, to reach a staggering $12.8 billion.
  • Overall, private labels in the U.S. feature bigger unit shares compared to the nation’s strongest brand in 77/250 supermarket (2) product categories.

What Is Private Label Makeup?

Private labeling is a typical way of doing business in the cosmetic industry. When a product has a tagline of private label, it means that a retailer purchases a bulk stock of their desired item. They do it directly from a manufacturer or a wholesale market. Then, the retailer resells the product. With their own brand name at an additional price to make a profit.

Let’s assume you are a buyer looking to buy makeup products in bulk. Now, you get in touch with a manufacturer that specializes in private label makeup lines. You get the product and rebrand it, then sell it to a consumer at an increased price. This is private label cosmetics.

A company that lacks the desire or resources to create their own product with raw materials often searches online for potential products manufacturers that ship across the USA and internationally. But to start working with any private label cosmetic companies, these manufacturers must meet all the retailer’s needs and criteria.

We at Adonis MFG are a top private label offering excellent quality service. Our talented staff is a key component for creating innovative products. We take pride in our trained personnel, licensed, and certified experts. Together, we can create a world-class product to meet the ever-changing needs of our clients. With private label skin care, you are always one step ahead. And we make sure to make that happen through our intuitive process development and design.

The 5 Opportunities You Will Get By Hiring Luxury Private Label Cosmetics

Hiring a private label manufacturer comes with a number of advantages. These advantages span beyond just getting a simpler production process. It’s about penetrating the cosmetics market with a tactic that makes an impact. Private label skincare offers you that advantage, here is how.

1.    Better Control Over Your Production

Cosmetics production (3) comes in stages. First comes the acceptance of raw materials, then delivering those materials to finish the manufacturing process. However, every stage is meticulously controlled and must be carried out with the safest procedures and protocols.

Without the help of private label companies, you need to mind the material order checklist, which includes temperature and disinfection control. Then, have an inspection sheet ready to pass quality control.

After that comes weighing and re-weighing the materials to make sure there are no discrepancies. After ensuring the quality and consistency of the product, it’s time to mix and fill the solution. The manufacturing process also includes filtering, cooling, charging, and dissolution. The formula must be filled in the appropriate packaging to maintain its quality and durability.

With a private label makeup manufacturer by your side, you can bypass these time-consuming processes. Instead, you get control over the production by directing a third-party manufacturer to do the work for you. Like the number of goods that can be produced in a set amount of time, the ingredients, and materials you need.

This means you can get into the cosmetics trade sooner than you would by creating your own formula from scratch. As a newly opened cosmetic brand, having such an opportunity in the cosmetics industry can set you on the right track.

2.    Creating Healthy Profit Margins

A professional private label can drive profit. Although the price varies from product to product, private labeled products can cost retailers anywhere from 40% to 50% (4) less to distribute and manufacture to customers. So, how do you create a healthy profit margin?

As the seller, you are the one that sets the price strategy and optimizes the production cost. This helps you create the profit margins you are looking for. That’s why retailers who rely on label manufacturers can turn around and provide their clients with big discounts without worrying about losing margins.

This is very important for cosmetic companies. Especially if you are selling online where clients have 100% price transparency. By working with a makeup manufacturer, such as Adonis MFG, you get both quality and affordability. The premium pricing makes for a profitable purchase so that you can compete with popular brand names.

3.    Private Labeling Offers Flexibility

As a retailer, you have a unique position of strength. You don’t manufacture or invent a novel product. In other words, you have the opportunity to adapt to an ever-changing market with better flexibility (5). You can easily adapt to customer data and trends. By working with private labeling manufacturers and suppliers, you can sell a product that your customer demands when they demand it.

You have the opportunity to look for long-term solutions that bring profit. There are three types of distribution (6) that you are most likely to pursue. These include intensive, exclusive, and selective distribution.

Intensive distribution is when you take an approach where you are planning to distribute skin care products in the largest number of outlets you possibly can. Exclusive distribution is when you pick to distribute a product, let’s say for body care, in just one or a couple of locations.

While selective distribution means that you are distributing your product of choice in only specified locations. Either way, as a retailer, you have the chance to create memorable, practical, and efficient retail shopping experiences and foster your profit potential.

For example, there is a rising demand for a certain market trend. As a smaller retailer, you can move quickly to get suppliers and manufacturers to create that product. With label production, you can pursue a certain niche and keep up with the latest trends. Whereas bigger companies may not target a niche product.

4.    Offering Better Variety to Clients

Other than flexibility, you can offer customers variety (7). As a small business, you may not have the funds to invest in extending a product range or a cosmetic line. But, when you buy retail products from a private label and an experienced manufacturer, you can extend that product range in a more affordable way.

Since a private label cosmetics company only operates B2B (doesn’t compete with their clients), they feature an array of product and packaging solutions with plenty of customization. So, you can use their skincare product and cosmetic packaging for color cosmetics to expand your inventory in a cost-effective way.

5.    Reduced Competition

If your target client base is not willing to spend a hefty sum on cosmetics and skincare, then you are at an advantage. By buying label skin care and label makeup from suppliers, such as ourselves, you are paying less to get a solid quality product. That means, you can keep the price low, which will be a major boon for consumers on a tight budget. With the help of private labeling manufacturers in USA, you can give your brand a stable foundation.

Regardless of the type of store you run, buying products from manufacturers companies can always help you reach a much broader audience. Of course, it takes more than that to topple the competition. But, by hiring a label cosmetic company, you can keep the spending at bay, and offer consumers a product they can afford.

The Challenges You Will Face

Private labeling does come with a couple of cons. These include:

  • Being dependent on your manufacturer.
  • Having trouble building customer loyalty right off the bat.
  • Poor consumer perception.

Since a third party will handle your care product production, it’s critical to have a reliable manufacturer. With Adonis MFG, you can rest assured knowing you’ve made the right choice. We offer only innovative and world-class products that can benefit your business.

Conclusion

Having your own label cosmetics comes a long way. The pros of working with private label cosmetic manufacturers outweigh the cons. This makes private labeling a viable option for long-term success.



References

https://hbr.org/1996/01/brands-versus-private-labels-fighting-to-win

https://connect.in-cosmetics.com/regions/global/the-evolution-of-private-label-brands-in-beauty-and-personal-care-trends-and-developments/

https://www.shopify.com/blog/private-label

https://www.retailtouchpoints.com/features/executive-viewpoints/private-label-for-profitability-six-things-to-consider

https://440industries.com/retail-strategy-5-benefits-of-using-private-labels/

https://www.homerev.com/blogs/home-revolution/benefits-selling-private-label

https://www.strategydriven.com/2019/04/10/the-advantages-of-private-label-products/