How to choose the right manufacturer for your beauty business

The process of choosing a manufacturer to work with can feel daunting, which is why we’re here to help you understand how the beauty product manufacturing process works. Choosing the right manufacturers is an essential part of running a successful beauty brand, as your manufacturer will determine the quality and price of your products, and it’s much easier to find the right manufacturer when you understand how the process works.

 

Product components

Your product is comprised of 3 elements which include: 

Each of your product components can be produced by separate manufacturers, or they can all be made by the same manufacturer. It is easier to have the same manufacturer produce all of them, but that may not make sense for you, depending on the level of customization you want, and on your budget.

 

What does the manufacturing process entail?

When working with manufacturers, you need to make 6 main decisions:

  1. How will you formulate your product? 
  2. What will you use for your primary component? 
  3. How will you design your primary component? 
  4. What will you use for your secondary packaging? 
  5. How will you design your secondary packaging? 
  6. Who will you work with for each step of the process? 

For each step of the process, you can choose the simplest, least expensive, and least customized option, the middle of the road option, or the most complex, most expensive, and most customized option. Choosing the most customized option will help you differentiate yourself in the marketplace, but it also costs more and requires more work from you. It’s up to you as the business owner to decide how you want to use customization in your brand and how you want to allocate your time and money. 

 

Minimum order quantities

One of the first things you want to ask when talking to any manufacturer is “what is your minimum order quantity?” This is also known as their MOQ. This refers to the minimum amount they will allow you to order, whether it’s the number of products or the cost of the order. It’s very important to have this information because it will determine whether you can work with the manufacturer, given your budget. Additionally, consider the following:

Make sure that you clarify every MOQ in your order so you don’t run into surprises later. 

 

Determine your highest price per unit

To determine your price per unit based on the highest price the market will tolerate, use this formula: 

R / 6.25 = P

Example: $40/6.25 = $6.40

This formula shows how to calculate the wholesale and retail prices for your products.  To determine your wholesale price, take the price you pay per unit and multiply it by 2.5. Then take that price and multiply it by 2.5 again to get your retail price. You need to price your products much higher than what you’ve paid to give yourself room to sell them to wholesalers and to put on promotions and sales while still earning a profit. 

You must keep your prices within the same range as your competitors’, or customers won’t want to buy them. 

 

How to prepare before call manufacturers

Before calling manufacturers, some important information to have on hand is:

In addition to the aforementioned, make sure to have your:

If you prepare beforehand, you will have a much better chance of finding the right manufacturers for your business. Before you begin researching and calling manufacturers, you need to make the aforementioned decisions. 

When it comes to private label, contract manufacturing, and custom formula manufacturing routes, be clear on which route you want to go, or whether you want a mix of different manufacturing routes for your products. Also, think about your deal breakers and your must-haves. What would make you decide not to work with a manufacturer? What do you absolutely need to have in order to work with a manufacturer?

The answers to these questions may change as you learn more about manufacturers and what they offer, but it’s important that you understand your budget, priorities, and the specifics about what you want from your manufacturer or manufacturers. 

 

How to choose a private label manufacturer for your product formulation

To find a private label manufacturer, follow these steps:

Keep in mind that you may end up ordering different products from different manufacturers. At 42 Dubonnet, we worked with Ladyburd, Your Name Cosmetics, and Radical Cosmetics. However, our customers never knew that our products came from different places because they were all designed and marketed as 42 Dubonnet products. 

 

On working with foreign manufacturers

Before moving on to the specific manufacturing paths, here are a few words of advice about working with foreign manufacturers. In our research, we noticed that Chinese manufacturers were more inexpensive, so we considered working with a foreign manufacturer. 

However, upon looking into it further, we realized that the import tax outweighed any monetary benefit we would gain from working with Canadian manufacturers. 

Therefore in summary, unless you have a compelling reason to work with foreign manufacturers, I recommend sticking with U.S. based providers. 

 

Takeaway

After following the tips and tricks listed in this guide, you’ll be well on your way to successfully manufacturing your beauty product. Although there are many guidelines, your manufacturer will determine the quality and price of your products, which makes this a crucial part of developing your business.

 

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