You’ve got the idea, you’ve got the passion, and now you’re ready to launch your makeup line! That's great, but you probably have some questions about how much it’s going to cost to get your business off the ground. You're not alone—we've spoken with many entrepreneurs who were ready to start their own businesses before they realized how much money it would take to get going. Let's talk dollars and cents to get an idea of how much starting your makeup line will set you back in start-up costs.
What Affects the Cost of Setting Up a Beauty Brand?
The cost of starting a beauty brand has many variables but can be simplified by first breaking it down into two different categories, Contract Manufacturing and Private Label Wholesale.
Contract manufacturing has the most flexibility and is the best way to get the lowest cost per unit—although keep in mind that it requires a high unit volume. Most manufacturers have a 3,000 to 10,000 minimum quantity per shade. You can develop a proprietary formulation for as little as $1,000, but the cost depends on the product itself, the complexity of the formula, and the chemist’s rate based on her/his education and experience.
You also have the option to choose from a wide variety of packaging styles. Keep in mind that this is often a separate expense on top of the product formulation. Most packaging vendors have a minimum quantity order of 10,000 per packaging style. Packaging unit costs can range from $0.60 USD to $1.20 USD. Lead time from start to the delivery of finished goods to your door can range from 3 to 6 months with an estimated cost of $10,000 to $20,000 per line extension or shade range in a category (ie, lipstick, lip gloss, eyeshadow, etc.)
Purchasing from a private label wholesale company reduces packaging and formula options, has a higher per-unit cost, but it’s the easiest, least expensive, and quickest path to launch a cosmetic line. You can buy low quantities from one to hundreds of units per shade. The products also come to you complete with your desired packaging and logo branding. The launch timeline is two to four weeks from start to finish. Compared to contract manufacturing, this tends to be much more cost-effective with a cost of $300 to $1000 per line extension or shade range in a category.
A unique option to contract manufacturing and private labeling is to purchase Custom Blend systems, which al