In 2019, the global cosmetics market was valued at $380 billion. By 2027, that value is expected to reach $463 billion. That’s a CAGR of 5.3% in an eight-year period. Thus, there can be no doubt that the cosmetics market presents a lucrative opportunity for people to invest in and profit from.
If you’ve ever dreamed of creating your own cosmetics brand, or if you’re already in the business and want to expand your reach, you must understand the pitfalls that many entrepreneurs face when entering this industry. The good news is that by being prepared and doing your research before entering the cosmetics market, you’ll be better positioned to succeed than most, even in an increasingly competitive marketplace.
Here are a few things you must remember before entering the cosmetics business.
Choose a Niche
To successfully enter into the cosmetic industry and make it a profitable business venture, you must choose a niche that suits your strengths and interests. If possible, take advantage of an opportunity to specialize in something different from everyone else. As long as this is within reason, there will always be people willing to pay extra for something special/
If other companies are selling similar products or services in your area, review their websites carefully before going ahead with your new business venture. That way, you can determine whether or not they’re doing anything different than what other companies are offering at similar prices.
Most cosmetic brands have a range of products but are typically known for a select few. Thus, you may produce lipstick, lip gloss, and powder makeup, but you’ll probably become popular for only your lipstick. It will take time to determine which niche to go for. However, once you have that locked, it becomes easier to realize your business structure and goals.
Define Your Target Consumer Group
When you are planning to start a cosmetics business, it is important to know your customer and understand their needs, wants, and frustrations. If you don’t have a clear understanding of who will be buying your products, it is difficult to make the right decisions on how to sell them.
If you want to know more about your target consumer group, consider asking yourself questions such as:
- What do they want?
- How do they want their product delivered?
- What price range are they willing to pay?
- How much time do they have in their day for shopping or researching products online?
These are just some of the things that can help determine what type of customers would be interested in purchasing cosmetics from your company.
Without a well-defined target group, it will become difficult for you. After all, you can’t meet everyone’s expectations. You have to target specific age groups for your products to make an impact on the market. Without defining the target group, it will also become difficult to come up with effective marketing strategies.
Understand FDA Regulations
There are also specific rules about what ingredients you can and cannot use in your products. Including warning signs on the labels is also a must if certain chemicals are included in your formula. All of these things will have to be maintained as per FDA regulations. Fail to do so, and you won’t be allowed to launch your product in the market.
Be Aware of Toxic Chemicals in Your Product
You must keep in mind the potential hazards of your products. You should know if they are made of toxic chemicals and if they are safe for human use. If you do not have the knowledge or the time to find out this information, hire someone who does. This will help you prevent risks and losses before it happens.
Using such chemicals can also end up in you having to deal with multiple lawsuits. Studying the Firefighter Foam Lawsuit will help you realize just how troubling these legal battles can get. Fire extinguisher manufacturers are now having to deal with constant pressure from personal injury lawyers representing the AFFF victims. These are people who have developed cancer over the years, mostly after coming in contact with the firefighting foam in question. The presence of toxic chemicals is what led to this crisis. Thus, you need to be very cautious about your own products and ensure that they’re free from harmful toxins.
In the United States, 68% of cosmetics consumers prefer brands that use clean ingredients in their products. Many of these consumers only opt for naturally-made products, i.e., products that only use natural ingredients. Therefore, the use of toxic or any harmful chemical in any measure is highly discouraged.
The cosmetics business is a complex and dynamic industry with many challenges for aspiring entrepreneurs. The main challenge right now is to cater to the changing trends. Much of these changes revolve around the desire of people to opt for natural ingredients. As far as your consumers are concerned, using natural ingredients that are devoid of toxins is the best way for them to take care of their looks while keeping themselves healthy. On top of that, there are other challenges as well, mostly related to how you target your consumers, market your products, and develop your business strategy.
If you’re passionate about taking on these challenges and pursuing your dream, you should be prepared to put in the time and effort required to succeed. The key is to start planning early on, even before starting production. That way, when problems arise, you’ll have already thought through how best to handle them.
