How to create your own line of beauty products with private labelling
Spring is coming! I looooooove spring, especially after a long, drawn-out, grey, and slushy winter.
Spring is a time for renewal and growth. The snow melts to reveal grass that’s turning green, plants start emerging from their winter slumber and popping up to say hello, and BIRDS are singing in the morning! Everything is waking up and growing again.
Spring is also the perfect time to focus on monitoring the growth of your business and looking at ways to push that growth further!
Inevitably, when you think about ways to bring in more revenue to your business, you think about this: what would it be like to create your own product line for your beauty business?
Maybe you’ve been dreaming about creating your own hair masks as a hairstylist, or your own personal line of facial cleansers as an esthetician!
It’s such a fun thing to think about…but what does it look like to actually pull the trigger on this “thought experiment” and do it?
What’s involved with creating a private label? How much does it cost, and is it worth it?
Today’s blog post covers all of that and more!
I sat down with Melody Bockelman, the founder of Private Label Insider. Private Label Insider is a marketing agency specifically designed to help beauty business owners create their own private label products brands and products. She gave me the scoop on everything involved with private labelling, and shared a crazy amount of valuable advice for you to consider.
I hope it puts a *spring* in your step and gets you moving from dreaming to doing!
What is private labeling, and how does it work?
A lot of people assume that private labeling means creating a brand new product, from scratch, and then building a brand around it. But in fact, usually when you ‘private label’, you’re kind of ‘adopting’ a product that’s already been created and tested. You get to choose the packaging and how to bring it to market, so you’re giving it your own personality and flair and really making it yours.
Of course, you can choose to create your own product, from scratch, at home…but it’s a very lengthy process, says Melody - and at that point, you’re not private labeling, but instead creating a custom formulation that has a lot of extra steps attached.
“You can cut down [the time spent] by 9 to 18 months by taking already-lab-tested products and putting your label on it,” she explained.
Beyond time saved, there’s also another very good reason to go with a lab-tested product, as well: the safety and approval process has already been done - and for multiple reasons, this protects your brand.
“When you private label, you’re partnering with the manufacturer’s chemist who’s done all the research to make sure the product is safe.”
After you’ve selected a safety-tested product to private label as your own, the fun (while extremely challenging part) is still ahead: choosing a brand and getting it out there to the world!
There’s so much that goes into creating a brand from scratch and getting the buzz going…where does one begin?
Melody gave me the scoop on everything branding and advertising a brand spanking new privately labeled product.
How to stand out as a private label beauty brand
We tend to think of each beauty product we see in stores as unique - but in reality, it’s the packaging and branding that make most products stand out from one another…and that’s it!
“A lot of brands you’ve seen in the marketplace [are] really no different. The formulations are usually very, very similar. What’s totally different is the brand story and how that’s told,” Melody explained.
Sometimes, standing out against the competition who has a similar product is literally all in the packaging!
Melody used the example of hair oils. Lots of companies sell hair oils, and the formulations are usually within an ingredient or two of one another. But standing out can sometimes be as simple as changing the way in which the hair oil is distributed! Changing from a glass dropper in the classic shape, to a different shaped tube can make a privately labeled brand unique to the competition.
The packaging of a private label product can really make a difference in sales and help your product stand out from the rest of the market.
How to get started with private labelling
Let’s say you’ve got an idea of what you’d like to sell, like a facial cleanser.
Where do you begin with the creation and marketing of this product?
Step 1: Figure out what you’re passionate about and narrow in on 1-3 products in that ‘passion zone’
Melody knows that beauty professionals of all types have tons of favorite types of products and passions within their fields - and she’s met incredibly ambitious people who want to create their own skincare, haircare, makeup, and nail art lines.
What’s her advice for getting started when you have so many passions, ideas, and dreams?
“If you love ‘all’ things, but you really love color cosmetics…then color cosmetics is your jam. Pick one category and saturate that. You don’t even need to create a full line. Just create the core products, make some money. Then you’re able to do line extensions and you already have an audience built!”
Step 2: Figure out where your product fits in the marketplace
The first thing to get clear on when jumping into market research is deciding where you’re gonna sell it, explains Melody.
“If you’re just selling it in your salon, you’re your only competitor. But one of my favorite sayings is, ‘The marketplace sets the value’. If your only competition is yourself, you can set the price.”
“But if you’re going to eventually sell outside of your salon, you have to do a competitive matrix.”
What’s a competitive matrix?
It’s when you do market research to find out how much consumers typically pay for a certain quantity of an item, basically - hence why Melody says, “the marketplace sets the value”.
Price yourself too high, and you have a steep uphill climb convincing the market you’re worth the price tag.
But price yourself too low, and you’re gonna lose the interest of consumers right away, as a low price can indicate low-quality ingredients from a brand with little clout. And you don’t want that!
Melody says that during the market research phase, a lot of her clients start to feel discouraged because they sense the market is already “saturated” with similar products to theirs…but she has good news about that!
“There are a lot of people in the world. No one has anything ‘cornered’. There’s absolutely enough room for you!”
Step 3: Find a manufacturer
Once you’ve narrowed in your product and how you’ll fit in the market, it’s time to find someone to help you bring the dream to life! You need to find a manufacturer who will create and distribute your product.
But Melody warns of a common misunderstanding that needs to be cleared up:
“Manufacturers are not marketers.”
What she means is that manufacturers are the experts about your dream product, and they can help you get your product out there - but don’t rely on them to advertise for you, because that’s not their job.
To find the best manufacturer for you, Melody says that you may have to go deep in Google (using search terms like “private label skincare” or “private label manufacturer haircare”), but don’t give up.
“You’re looking for that lab that does the best job at whatever you’re looking for - no matter where they’re located. They can be in California and you can be in Italy. Don’t worry about the location. Fall in love with their expertise.”
What should you look for in a high-quality manufacturer you can build a great business relationship with? Melody had great advice:
“It’s like getting married - they’re your partner in business. So it starts with the dating process. We’re looking for good communication, an estimated time to get samples shipped. How easy is it for you two to work together? How stable are they? COVID showed a lot of people’s hands when they ran out of raw materials packaging.”
Something to consider about finding the right manufacturer is that some of the larger-scale, more prestigious ones may be hesitant to sign with you if you haven’t built a reputation in the business - but there are ways to turn the tide in your favor if you’re making a big ask of a manufacturer that might be feeling wary.
To increase your chances of being accepted, keep your emails to potential manufacturers short and sweet. Know exactly what you want. “Hey, I’m Alexis, I’m looking for eyebrow samples. What’s the next step?” says Melody, as an example.
Once you decide on a manufacturer, it’s standard practice for them to ask you to sign a non-disclosure agreement, so don’t be wary of this. Once you’ve signed, you get to start sampling!
Melody says that it’s best to try out a few different manufacturers before you settle on one long-term.
“I personally will send out a project to 3-5 manufacturers and then reduce it down to two. It’s good to have a backup plan.”
Step 4: Prepare your budget for your launch (samples, packaging, marketing, etc)
From buying samples to sending out your first batch of perfectly packaged products, there are a lot of costs associated with launching a private label.
What should you realistically expect to spend on a first-time product launch, in total?
“One to three thousand dollars per product** is reasonable,” says Melody. (**Psssst…for more specifics on price, tune in from 21:58 of my interview with Melody above!)
However, if you’re planning to create your own custom formulation of a product, expect your budget to be much higher:
“With custom products, you’ll run into research and development fees. So it is more expensive - and you have to buy your own packaging. You’re probably looking at $5-7,000 [per product], depending on how fancy you get with the packaging.”
Her philosophy, which she shares with clients, is that 70% to 80% of your total budget should be spent on marketing your new private label product…and a lot goes into that.
Creating a website, paying for logo creation, product photography, possibly a copywriter to help with emails and ads - it adds up quickly! So be sure to leave a healthy portion of your budget for marketing.
Step 5: Start working alongside your manufacturer to bring your product to market!
The biggest tip that Melody gave for anyone considering marketing a private label product is this one:
“Don’t create a product without a plan to acquire customers!”
“I won’t even launch a product for my client until they create an email list. Once you have that email list, you’ll have consistent sales.”
Melody says that other methods of selling your product (as an example, on Instagram) will represent a very small portion of your overall sales - so it’s best to double down on what exactly works.
“You need a social media presence, of course. But industry-wide, Instagram sales is only about 5% in beauty. 30-40% is from your email list; the rest is from ads.”
When it comes time to get your product out there, you need to nail down your unique selling proposition above all, says Melody.
“You’ve gotta be really, really clear on the problem that you’re solving in the marketplace, because otherwise, even with [beautiful] packaging, people won’t understand what [your product] is for. Make sure all of your messaging and branding is all about that.”
The two most important things to remember about creating a private label brand in the beauty industry
Melody has seen plenty of ambitious, creative, passionate people fail at private labeling just simply because they didn’t stick with it.
She says that now is the best time to start - and just keep going, through all the uphill battles ahead. That’s the way to succeed.
“It’s a great period of time right now to start an e-commerce business. And [I love to tell my clients], ‘Be here next year.’ The brands that do the best are here for the long haul. Don’t give up at the beginning. It’s not a sprint, it’s a marathon - and the more you work on things, the better you’ll be. Everyday people make a lot of money at this. It’s very doable.”
Be brave, take a chance, and try it out! I can’t wait to hear about your own adventure in private labelling your very own products.
Xo,
Stephanie
