The beauty industry is booming. Customers are willing to pay top dollar for the latest trends and new revolutionary products. As an entrepreneur and beauty lover, that presents an exciting opportunity to sell makeup products that you adore and believe in. However, the beauty market is also ultra-saturated with brands and products.
With such high stakes, it’s important to set your business up correctly from the start. How can you create a successful makeup business that stands out amongst the steep competition? What fundamental measures do you need to take to create the business? This article will help you do just that, breaking it down into just 8 actionable steps.
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There are several ways to source products to sell. Naturally, this is one of the most important steps, as it’s your opportunity to create or choose a product that sets you apart from other makeup businesses. As you select products, ask yourself why a customer would choose to purchase them from you rather than someone else.
You can either resell products from other brands or make your own. Dropshipping can be a convenient solution, but you may choose to affiliate with makeup brands and sell their products, which is another way to get product fast. Beware, though, of MLM schemes that have high start-up costs and make it hard to earn a profit.
White labeling is another option: it’s when you buy generically manufactured items and package them with your own branding. This is a fast way to get started and is ideal if you have a novelty idea, like natural beauty products for redheads.
You may also make your own products. This is a bit more difficult and takes time, but it’s a good opportunity to be creative! You can make some products at home, such as lip balms. You can also manufacture makeup by creating your own formulations in a facility. You’ll need to reach out to manufacturing facilities and go through a sampling and testing phase to make sure you get it right.
With so many beauty products and companies on the market, your branding is one way to really set your business apart from the rest. Your brand and branding are what create an experience for your customers.
You showcase your brand through your:
At this point, you may want to hire someone to help you with your branding. Design professionals can put together color stories, mock-up packaging, and stylize logos. Photographers can help you create an aesthetic and tell your story. Copywriters can help you create brand values, the voice in which you speak to your customer, and taglines.
This step is important because it’s how you’ll convince customers to buy your product rather than the competition. It’s how you’ll present your brand’s story to the world. You’ll use the guidelines you create in this step to share on social media, lead your team, and even run your business.
With your product and branding in place, it’s time to put it all down on paper. Your business plan is where you define your business, explaining your products and processes. You can turn to this document in the future to guide your decision-making. You can also edit it later on as things progress.
Your business plan will include:
Owning a makeup business can be expensive. From the cost of ingredients to packaging and manufacturing, the costs add up quickly. Your first step is to create an estimate of how much capital you need. This includes everything from hiring design experts to creating a website to making the product itself.
Once you know how much money you need, you can determine where you’ll get the funding. You can choose to pay for everything out of pocket, in which case you’d use your savings and income from your current job. You might also reach out to friends and family and ask if they’d invest in your business. You’ll need to make a clear agreement on their level of involvement in the business.
You can also apply for a business loan. You can get a loan from your local bank or an online lender. It’s important to shop around for the loan with the lowest interest rate so that you don’t get stuck in debt. There are also business grants available, both from the government and local organizations. You don’t have to pay grants back, but you will need to meet certain criteria to qualify.
Finally, you could use a business credit card to pay for expenses. Credit cards tend to have high-interest rates, so this should be a last resort. However, they can be easier and faster to get than loans, so it’s an option worth considering.
Beauty products come along with many concerns when it comes to labeling, ingredients, and shelf life. You’ll need to keep a close eye on your packaging and inventory to manage it all.
Start by checking that you correctly label your product packaging. Are your product claims supported? For example, you need to get certifications to claim that your product is organic. If your product contains any common allergens, you’ll also need to disclose that on your packaging.
Speaking of packaging, it’s important that your packaging represents your product’s personality and brand appropriately. Appearances aside, you also need to ensure your packaging protects the product itself and includes the appropriate applicators. Clearly label expiration dates, ingredients, and instructions for use.
Finally, beware of common beauty inventory issues. For example, heat and moisture can damage your products, so you must store them in a temperature-controlled room. Some ingredients, especially natural ones, have a shorter shelf life, so you might keep limited inventory on hand. If you’re storing the product yourself, you should also keep it all organized so that you don’t lose inventory or struggle to fill orders.
You’ll need to make sure that you’re operating your business legally on a local, state, and federal level. First, register your business with the state you live in. If you plan on operating as a sole proprietorship, you may not need to register. However, forming an LLC (limited liability company) or corporation can separate your personal assets from the business.
Most states allow you to register your business online. It typically costs about $125 to register an LLC, but fees can vary.
You’ll likely also need certain permits and licenses to sell your product, depending on your location and where you plan to sell. To find out what’s required, check out the U.S. Small Business Administration guide and your Department of State website to learn about federal and state permits. Call your county clerk for local requirements.
Finally, you’ll need a federal EIN (employer identification number) from the IRS (Internal Revenue Service). Head to the IRS website to apply online. You won’t necessarily need an EIN if you have no employees and operate as a sole proprietor, but it can be helpful to have when opening business bank accounts.
You can choose to sell your product online or in person. If you’re selling homemade products, you might sell them at your local farmer’s market. However, if you have a manufacturer creating and warehousing your product, it could be more efficient to sell online.
Either way, it’s important to have a professional website. Here, you’ll showcase your branding, products, and story. This is a way for you to build credibility with your customers and encourage them to buy your products. You may pay a web designer to create your website or use a website builder like Squarespace or Shopify.
You could also sell at a physical store. In this case, you’ll need to find and decorate a storefront. You can also reach out to beauty chains like Sephora and see if they will carry your product. Oftentimes, these stores will only take on established brands, so you may attempt this further down the line.
Picking a payment system is one of the most important parts of setting up your business. Customers who find your checkout process untrustworthy or hard to use will quickly abandon their carts, so it’s critical that you choose the right system.
Pay.com has Level 1 PCI DSS compliance, which is the highest level of security. Pay.com also provides you with everything you need to get paid right away, including a merchant account, payment processing services, and a payment gateway. Plus, it’s easy to set up in just a few clicks.
We make payments incredibly easy for both you and your customers. Using the Pay Dashboard, you can quickly add payment methods to your website. You can also send Pay Links to your customers and get paid via email or text message. You can even manually enter your customer’s information if they’re paying in person or over the phone.
Don’t wait till the last minute – click here to get started with Pay.com now!
With any business venture, it’s important to weigh the potential benefits and drawbacks. One of the biggest reasons to start a makeup business is profit. The beauty industry has been in a consistent state of growth, so you can earn a good chunk of money. Profit margin is high, with some earning as much as 80%.
However, competition is stiff in this industry. If you fail to differentiate your product and market it properly, you’ll likely struggle to make sales. It can also be costly to get started, as you’ll need funding for branding, packaging, products, manufacturing, and more.
Still, selling makeup can be fulfilling. You can provide products that make people feel beautiful and confident. The beauty industry also has high customer retention rates - when a customer finds a “holy grail product,” they tend to stick with it for years.
The beauty industry can be challenging to break into, but is ultimately incredibly rewarding. Starting a makeup business could earn you a huge profit while allowing you to change people’s lives for the better. To ensure you create a successful business, spend plenty of time creating a unique product and memorable branding.
Of course, your business won’t get far without a good payment system. Pay.com makes taking payments quick and easy, whether you’re selling online or in person. With these steps in place, there’s no limit to how big you can grow your makeup business. Click here to get started now!
14 Min. Read
Why Start a Makeup Business?
Types of Businesses in the Cosmetic Industry
What Is the Growth Potential for a Makeup Business?
10 Steps for How to Start a Makeup Line
Bonus Tips for Success
Start Your Makeup Business
The beauty industry is constantly growing and evolving. New trends are always emerging, which creates opportunities for entrepreneurs in the beauty space.
Whether you want to create a product to sell in a store or launch your own digital storefront, there are many ways to achieve success as a beauty guru.
In this 10-step guide, you’ll discover what it takes to start a makeup business, market your own line and scale your company to success.
There are many reasons to start a cosmetic business. Here are a few of the most popular inspirations for entrepreneurs to get started in the beauty space:
There is no right or wrong answer when it comes to your “Why” for starting a cosmetic business. Considering your motivations will help you get focused on your end-goal and see your business through to success.
If you want to start a makeup business, there are dozens of ways to go. Choosing a focus is helpful when you’re starting to build your brand. Your niche could be one specific type of product or a line of products that is meant for a very specific type of consumer.
Choosing a niche will make it easier to hone in on your target market, brand your business effectively and stand out in a sea of other beauty brands.
Blushes, lipsticks, eyeliners, mascaras, foundation and eyeshadows are all very common makeup products. However, new businesses that get into makeup production create their own lines of these products all the time.
Each of these products comes with a wide range of variations. For example, when it comes to lipsticks, you have glosses, crayons, mattes, metallics and more. This is on top of all of the color options.
When you decide to create any of these products, you will likely need to put your own personal twist on them and create a themed collection.
Please note that creating products like these may take several rounds of testing formulas and measuring qualitative aspects since anything you release must be safe for the skin.
Over the past few years, eyelashes have been a major trend. False lashes are a relatively easy product to sell since they don’t require as much product development as other makeup products.
For the most part, developing a lash product involves ordering the lash styles you like from a supplier and packaging them with your branding. You can sell your lashes in your own store, either online or in a physical storefront.
Alternatively, you can sell your lashes at other makeup retailers like Sephora, Ulta or even drugstores.
Aside from the lashes themselves, it is very important to consider what type of lash glue you are selling with your lashes. Since the adhesive goes so close to the user’s eye, you need to ensure that it’s not harmful if it comes in contact with the eye.
Body makeup works very similarly to concealer, foundation and other makeup you’d use on your face. The purpose of body makeup is to help cover up blemishes, even out your skin tone and get the perfect amount of glow.
Since it is similar in nature to many traditional makeup products, product development and the retail process are very similar.
People are becoming more aware of the ingredients they are putting in and on their bodies. This has created a demand for clean ingredient makeup products.
Consider creating products that are plant-based—nixing chemicals can do wonders for your business. These products are a bit more expensive to manufacture, but there are people who are willing to pay a premium for natural products.
There are people who are willing to invest hundreds of dollars in their makeup even if it’s not made from all plant-based materials. These are typically people who are skilled in the makeup realm—such as makeup artists—and know that high-quality products come at a high price point.
Create a product with the highest quality ingredients available if your goal is to target this market.
The beauty industry is growing quickly as trends evolve and multiply rapidly. As of 2019, the cosmetics industry is worth $532 billion and it is slated to exceed a market value of $805 billion by 2023. Cosmetic products and skincare alone contribute to nearly 40% of that value.
Additionally, the profit margins for makeup businesses are at an average of 40% and can be up to 80%. As a small makeup business, you’ll likely fall right around the average profit margin.
It is important to note that the cosmetics sector has a few main players that run the show. Not all brands will grow at this rate.
This bit of information should not dissuade you from starting a cosmetic business, but should help you to shape your expectations accordingly.
Starting your own business is exciting, but it can also be confusing if you need help knowing where to start. While there are many paths to success, we’ve outlined the 10 steps you need to help you get started on the right track. With this guide, you’ll have an established beauty brand in no time.
Choose a product that you can create with a unique touch that sets it apart from the competition. You should choose a product that interests you, but you should also ensure there is a demand for what you want to produce.
It’s also wise to consider what it will cost you to produce an item. This will help you set realistic margins and earn a handsome profit on every sale.
We recommend starting with only one or two cosmetic products before growing your business. By choosing one or two beauty products, you can perfect the process and start to build your customer base without a ton of pressure.
Before you start developing your product, you should make a business plan. This outlines what you want to sell, who you want to sell it to and how you plan to sell it.
This business plan will be used primarily for your own reference, but it will also help if you are pitching for partnerships, loans, grants or investors.
Your business plan should include:
In this step, you work out the logistics of your business. Consider things like how much inventory you plan to hold and what the ordering and shipping process looks like. You can also outline how you will send invoices for your makeup business.
Really dive deep into your target audience. See how potential competitors are serving this audience and figure out how you can do it better, making your brand stand out from the competition.
Starting a business requires capital and there are several ways to come up with this capital.
You could fund your business with your own savings. However, if you don’t have the money of your own, you have the option of either borrowing the money or seeking investors.
To take out a business loan, you can start by reaching out to your bank. We encourage you to shop around with other banks to find the best interest rates. Also, check out what the Small Business Administration has to offer.
If you decide to go with an investor, determine if you want a partner who is hands on or if you’d prefer a silent investor. Investors could be family members, friends or business associates. Ideally, you’d want somebody who is trustworthy and has the amount of money that you need.
Additionally, some local organizations have grants available for new business owners. This money is often free, meaning you don’t have to pay it back. Google “business grants in [your location]” to find local programs.
Startup costs for a cosmetic business will vary based on the product you decide to sell and how large of an operation you are looking to run, but there are some basic costs that are pretty much standard across the board.
Here are some investments you may to make when starting your cosmetic business:
There are cheaper alternatives to some of these investments, however pinching pennies may reduce the quality of your product and branding. Your initial goal may be to start small and then scale up once you have revenue coming in.
When you start a makeup business, you will need to register your business. An LLC should suffice, but a “doing business as” (DBA) or corporation may work better. How you classify your business will depend on local legal requirements.
It’s important that your business is its own legal entity. In the event that an accident occurs due to one of your cosmetic products, you’ll want to make sure you’re protected as an individual.
You will also need to seek a tax identification number for your business entity so that you can pay taxes. This is called an employer identification number (EIN).
Some cosmetic and beauty products require approval by the Food and Drug Administration (FDA). We encourage you to check out the cosmetics page of their website for specific guidelines on developing and labeling your product.
Additionally, you should seek legal assistance if you plan on patterning any element of your brand.
A brand is essentially the personality you build for your business. It should be designed to connect with your target audience.
You breathe life into your brand by creating an aesthetic that includes a color palette, logo and the like. Additionally, you’ll develop a voice for your brand that shines through in any copy on your website, social media and packaging.
You have your ideas and plan all laid out. You also have your business model established and the funding ready to go. It is time to develop your product. Everything about your product should be highly representative of your brand.
Hammer out the specifics, including sizes, colors to textures. At this point, you’ll also want to work out packaging. Be very intentional with your packaging because it makes a world of difference.
Pay close attention to the materials and ingredients you use when you manufacture cosmetics. For example, if sustainability is one of your brand’s values, plastic packaging is not on-brand.
Finally, make sure your product is worth what you plan to charge for it. Overcharging customers will not bring them back.
Order samples of your products so that you can test them. Make sure they are the quality you expected in terms of size, color and texture. You should check other qualitative measures such as how waterproof the product is, or how long it lasts.
You may have to go through several rounds of testing before getting it just right.
Many makeup businesses excel in the world of e-commerce. Even if you plan to sell your products in physical stores, you’ll likely opt for an online storefront as well (and factor it into your business model).
Your website should include a home page, an ‘about’ page, a contact page and shop pages. The shop pages should be easily searched, sorted and filtered so that your customers can find what they are looking for with ease.
Ensure that you use a secure paywall so your customers’ sensitive information is never compromised. Adding payment features like PayPal or plan options also enrich the user experience.
You have two options when it comes to building your online storefront. You can either create it yourself with a drag-and-drop site like Squarespace or you can hire a professional to build it for you.
We recommend hiring a professional so that your site meshes perfectly with your brand and offers a seamless user experience for your customers.
It is time to develop a marketing strategy. If you are sticking to e-commerce for your makeup business, both advertisements and content marketing are good options.
Here are a few approaches you can take when creating your marketing strategy:
Your marketing strategy should depend greatly on your target audience. Design your marketing strategy so that it speaks with your target audience.
This goes for both messaging and the delivery of the message. Speak to them in a language that resonates with them, and make sure you’re delivering the message on a platform that they spend time on.
Once you have everything ready to go, it is time to launch. Get your followers and supporters excited for the big day and start generating sales. If you’ve followed the steps in this guide, hopefully you’ll have a line of customers waiting at your physical or virtual storefront!
Every entrepreneurial journey is unique, especially in the cosmetics industry where there are so many ways to go when starting a cosmetics business. However, there are some business practices that are universal. Here are a few tips to get customers and grow your makeup business.
If you are already known and trusted in the online world of makeup—let’s say you’re a respected makeup artist—you will find it much easier to sell your beauty products.
Think about the people who climbed to the top of the cosmetics industry on YouTube. They built personal brands that exemplified their makeup artistry and later went on to create makeup collections of their own.
This process will likely look different for you. But studying their journeys from makeup artists and influencers to creators of makeup collections will give you ideas for your own brand strategy.
Let your customers know you appreciate them in a few ways. Use referral systems and giveaways to send free or discounted products to loyal customers.
These small things show your customers how grateful you are for their loyalty to your cosmetics business.
Investing in influencer marketing and sending our public relations (PR) boxes whenever you launch a new collection is a strategy that many successful makeup businesses use.
Seeing all of your new products laid out in an on-brand PR box will really get people excited about your collection. And people will be more likely to buy your products when an influencer they know and trust talks about them.
Many beauty brands create products that are centered around white consumers. They fail to create shades of their products that work for people with darker shades of skin, and their branding often fails to embrace diversity.
Think about how you can include all makeup fans when you design and market your products.
Now that you’re familiar with the basics of the makeup industry, the manufacturing of cosmetics and the 10 steps for building a successful business, you are ready to bring your idea to life.
There are so many possibilities for people who dream of creating a makeup collection of their own. We are confident that you’ll have success in the industry once you set up a solid strategy and get to work.
So what do you say? Are you ready to start your cosmetics business?
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