PLAN TO SUCCEED

Chances are if you're here looking for a cosmetic manufacturer, you already have a plan for your future success. However, some budding entrepreneurs come to us without a lot of experience. While Proliferate doesn’t offer business development services, we can briefly outline some points of advice and recommendations below.

Reality Check

As a word of caution and a reality check for those hoping to start their own line of cosmetics: it’s not easy! We can speak from our own, and our client’s previous experience. Scaling the sales volumes necessary to profit can take several years. If you’re looking to make money quickly – we don’t recommend starting your own brand. Retailing an existing brand is far safer and more lucrative; all of the hard work has been done for you!

Similarly, if you are a creative soul and your specialty is makeup itself, you may be disappointed to learn how much of operating a cosmetic brand is NOT creative. You will spend most of your time operating the day-to-day of your business. If you feel this is not your gifting, then it would be wise to partner with someone else who has this business experience or is at least willing to cover this aspect of your company.

With that said, if you’re up for a challenge and willing to put in the time, money and effort, then owning your own brand can be very rewarding. We sincerely don’t want to lead people into something that they cannot manage. We’ve seen brands become very successful, but we’ve actually seen many brands fail; mostly because they weren’t aware of all it would take to own their own company.

Find Your Target

The first consideration is to determine if you have a niche target market. The clean beauty industry has grown substantially in the last 10-15 years, so while there are already a lot of brand options, there is room for more! The key is knowing what will make your brand unique. It’s never classy to duplicate the look and feel of another successful brand. If that’s your goal, we recommend re-evaluating your motives.

When consumers purchase cosmetics, it’s not just about the product inside. It’s actually more of an emotional decision than anything. The look and feel of the packaging, as well as the brand culture, values and ethics play a very important role in their purchasing decision. So for that reason, we recognize that there are niche markets yet to be reached. If you see a gap in the market – then starting a new line of cosmetics just may be a project worth taking on!

Investment

A frequently asked question is how much it will cost to start your own line of products. This answer will vary greatly, depending on many factors. How many products will you launch? Will you invest in custom packaging? Do you have a plan for distribution? We suggest exploring this website, and reaching out to us through our APPLICATION to request the password so you can view our PRICING GUIDE. This will give you an indication of how much it will cost to start-up your brand.

Company Registration & Trademarks

You will need to register your company with your government authorities in your country. If you need assistance with this process, we recommend connecting with a local business development officer.

Design

You will need to put together a creative team to assist with the imagery, look and feel of your brand. A graphic designer to design the artwork for your packaging, as well as a photographer that specializes in product photography. Your best option is to find local professionals to collaborate with. For product images, we suggest sending your photos to www.pixelz.com for creating beautiful photos of your product floating on a white or reflective background. Canva is another great platform to become familiar with in order to edit your own photos. They also have a background removal feature for product images. www.canva.com

Product Pricing

People who are new to retail, are often surprised at the margins required to retail and distribute their brand. A few accounting definitions to know (according to AccountingTools.Com)

Margin (also known as gross or profit margin) is sales minus the cost of goods sold. For example, if a product sells for $10 and costs $7 to manufacture, its margin is $3. Or, stated as a percentage, the margin percentage is 30% (calculated as the margin divided by sales).
Markup is the amount by which the cost of a product is increased in order to derive the selling price. To use the preceding example, a markup of $3 from the $7 cost yields the $10 price. Or, stated as a percentage, the markup percentage is 42.9% (calculated as the markup amount divided by the product cost).

To price your products appropriately, take note:

Retailers expect their wholesale price to have 100% markup (or a 50% profit margin). Anything less than this will be unattractive to most retail locations since their overhead for a brick and mortar store, and staff to sell your product, is substantial.
Distributors expect a distribution price with a 33% markup (or a 25% margin). (Example Scenrio: Retail price - $10.00 Wholesale price - $5.00 (50% margin) Distribution price - $3.75) A Distributor offers your product to their network of retailers at the wholesale price. They take care of shipping the product to retailers. Retailers appreciate this arrangement. It makes it easy for them to purchase several brands from one place.

The retail price for your product greatly influences your target market. If your goal is to keep your price-point affordable, it will be necessary to eliminate as many “middle men” as possible. The option to sell direct to retailers (without a distributor) is viable, it just may take more effort to gain exposure. The option to sell direct to consumers (without retailers and a distributor) is also a route some brands take. They simplify their business structure, but again – it may take more effort to build your tribe of consumers without the exposure of seeing your product in retail locations.

Take great care to decide on a price for your product range. If priced too low, you will not be able to scale your business. If priced too high, you may limit your potential consumer base.

Marketing

Most often, brand owners expect this to be the easy part. They assume that the brand they are creating will be coveted by consumers and retailers around the world! Selling it will be a breeze…won’t it? Many are disappointed to discover that it is much more difficult than they expected. Retailers are very cautious to bring in new lines. Consumers need to be persuaded to give your product a chance. Influence is key to success. We have seen this demonstrated time and again. Do you have the influence it takes? Our successful clients are the ones who lead their existing circle of influence to purchase their product. The law of attraction multiplies and their brand grows.