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Bath and beauty product business from scratch

A detailed account of a Fastlane process...

TooSlow

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About a month ago my girlfriend and I decided to put some products together for her school's craft fair. We came up with a list of 8 products to formulate, researched recipes online and checked competing products. We dropped 1 along the way since it didn't look like we'd be able to sell it profitably.

From there I did my best given limited time (and that postal strike) to source our raw ingredients. Some I definitely overpaid for since we had to go local retail. With our ingredients collected, we proceeded to make test batches to iterate on before making the larger batches of 1-2 dozen units. Each product type ended up with a few different scent combos to try appealing to a wider range of people. We also figured it would help determine what's more popular in general.

Packaging and labeling were pushed towards to the end. With the low unit count and each product having a different package, we used what we could from a craft store, dollar store, and canning jars. At roughly $0.50 to $1.25 per container, that seems like too big a chunk of the total. Labeling was just a couple different sticker labels that I made a template for and printed it all out at home. Unfortunately the low quality meant the stickers didn't entirely stick (tape and glue to the rescue!)

The day before the craft sale began, we made a logo, email account and Facebook page (basically empty but at least it's there), and printed out product sheets and price sheets. We almost looked like a real business!

Our first sales were quite exciting. All that work getting validated. Lots of positive comments and feedback, even a couple repeat customers! We made some pricing adjustments, added package deals, and improved our signage as the days went by. Sales were slow but steady, but by the end we had just exceeded the total expenses... aka we made a profit! Plus we're still left with about 30% of our inventory.

Neither of us have ever done something like this, so it's been a great learning experience. The next step is deciding whether to continue on and scale up, or move on to something else. We did have some very positive feedback, but it was also a very closed environment with only a handful of the outside public stopping by, so I'm not sure how strong of validation it counts for.

I was thinking of putting a site together to list our products for sale, to help sell what remains and gauge larger scale demand. We'll also have to get on Instagram, and finish our Facebook page. My biggest concerns are that it's a very crowded space so we'd likely need to spend a lot on advertising, and while we used quality ingredients I don't feel our products stand out very much from what's already available.
 
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samuraijack

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Following! I sell my own branded & custom formulated skin care products on Amazon, but unlike you I have never created it myself since I'm no cosmetic chemist. The formulation & manufacturing process is all done turn key for me. If you have any questions let me know.
 

TooSlow

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Following! I sell my own branded & custom formulated skin care products on Amazon, but unlike you I have never created it myself since I'm no cosmetic chemist. The formulation & manufacturing process is all done turn key for me. If you have any questions let me know.

Thanks ProblemOd! I am curious how you found the manufacturer and how much they do for you. Do you just tell them the type of product and unit count you want and they handle the manufacturing, packaging and labeling? With that done, it seems like the rest is all marketing and sales.
 

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Following - my current eBay store is health and beauty products - looking to branch out into our own branded product line
 
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TooSlow

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We have made some progress this week, after taking it easy following the craft fair.

Our Facebook page now has each of our products listed in the shop, with pictures, descriptions and prices for each. The descriptions could use another pass, but at least there's something there. The FB user unfortunately is an empty profile with a mix of business and family names (about 57 days til we can fix it), but hopefully I can at least convince my partner to put her photo on it to boost credibility.

I was impressed with how user-friendly FB has made the business pages. Lots of tips as you go, but the site was pretty slow with some errors that left me with duplicate products (shows up when tagging, not the actual product listing). This should serve our purposes for the time being, but I feel it'd be better to move the actual store elsewhere and just have FB as a social media page.

Instagram is set up and connected to FB as well. 2 followers so far! This is how we're planning on getting traffic to our shop, so it's going to take some work.
 

samuraijack

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Thanks ProblemOd! I am curious how you found the manufacturer and how much they do for you. Do you just tell them the type of product and unit count you want and they handle the manufacturing, packaging and labeling? With that done, it seems like the rest is all marketing and sales.

I probably know and have emailed/called 90% of the manufacturers in USA now from all the research I've done. I just googled them and had VAs search for them. There are 100s, but only a handful are any good.

Manufacturers product quality and customer service vary wildly. To find a manufacturer who makes good products AND has good customer service towards you is a needle in a haystack.

There are a few different type of "manufacturers". I put that in quotes because some of them are just contract packaging facilities who produce EVERYTHING that goes into a bottle. Hair gel, floor cleaners, body wash, cream, supplements. But that's because they outsource all formulations to different partners (the real manufacturers). For example: Home - Kleen Concepts I recently contacted for a quote and turns out they were just going to buy the product in bulk from my current manufacturer that I'm already using :/

Then you have facilities that offer either ALL or just one of the following services: contract manufacturing, custom formulation, & private label.

Depending on your goals and risk tolerance, you can go a few different routes. From least expensive to most expensive:

1) Brand a product that they already make aka private label. Normally they will have no minimum order quantity (MOQ), but a trivial amount for first purchase order, like $100-$200. There are private label manufacturers that sell high quality "natural" products & more traditional ones. You can usually search these ingredient lists and find review and sellers on google.

Pros: Spend all your money and effort on marketing. Be able to launch a whole line of products because of low start up cost. You can tell the product quality without investing anything (ask for samples).

Cons: You might not find a private label product that fits into your brand. Per unit cost may be more expensive.

2) Have them custom formulate for you, but they own the formula. This will range from $300-$2500 (never pay the higher range for this, its almost never worth it). You telll them what you want, what ingredients to include/exclude, texture, fragrance etc... and they will make it to the best of their ability (some have good abilities, some not so much).

Pros: You get to tweak a formula just how you want it to fit into your brand and or to a need in the market place. You can have them try to reach a target price per unit.

Cons: Unless they have similar private label products you can sample, product quality is UNKNOWN. You will have to take the risk. MOQs here are usually 1000pcs (less common) - 5000 pcs(more common). You don't own the formula, and if you want a back up manufacturer or another manufacturer for lower cost, you will have to re-formulate and it won't end up exactly the same (but can be very similar). This is what I am currently doing.

3) Have a formula created for you, and you own the formula (including mixing instructions). This will cost you a few grand. Now with formula in hand you can contact anyone who offers contract manufacturing to make this for you.

Pros: You can take this formula anywhere. Two different contract manufacturers with your instructions can make the same exact produt. You have more options to find the right contract manufacturer for the right price. Because of this, you can usually get this per unit cost the lowest with this option. This is what the big companies do.

Cons: Same as above, you wont know product quality until its made. The formula can suck. MOQ usually higher, but there are some that offer lower ones.

Everyone offers the option of your own packaging and most offer a turn key process. Maybe the most you will have to do is order packaging yourself and ship it to them.
 

TooSlow

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I probably know and have emailed/called 90% of the manufacturers in USA now from all the research I've done. I just googled them and had VAs search for them. There are 100s, but only a handful are any good.

Manufacturers product quality and customer service vary wildly. To find a manufacturer who makes good products AND has good customer service towards you is a needle in a haystack.

There are a few different type of "manufacturers". I put that in quotes because some of them are just contract packaging facilities who produce EVERYTHING that goes into a bottle. Hair gel, floor cleaners, body wash, cream, supplements. But that's because they outsource all formulations to different partners (the real manufacturers). For example: Home - Kleen Concepts I recently contacted for a quote and turns out they were just going to buy the product in bulk from my current manufacturer that I'm already using :/

Then you have facilities that offer either ALL or just one of the following services: contract manufacturing, custom formulation, & private label.

Depending on your goals and risk tolerance, you can go a few different routes. From least expensive to most expensive:

1) Brand a product that they already make aka private label. Normally they will have no minimum order quantity (MOQ), but a trivial amount for first purchase order, like $100-$200. There are private label manufacturers that sell high quality "natural" products & more traditional ones. You can usually search these ingredient lists and find review and sellers on google.

Pros: Spend all your money and effort on marketing. Be able to launch a whole line of products because of low start up cost. You can tell the product quality without investing anything (ask for samples).

Cons: You might not find a private label product that fits into your brand. Per unit cost may be more expensive.

2) Have them custom formulate for you, but they own the formula. This will range from $300-$2500 (never pay the higher range for this, its almost never worth it). You telll them what you want, what ingredients to include/exclude, texture, fragrance etc... and they will make it to the best of their ability (some have good abilities, some not so much).

Pros: You get to tweak a formula just how you want it to fit into your brand and or to a need in the market place. You can have them try to reach a target price per unit.

Cons: Unless they have similar private label products you can sample, product quality is UNKNOWN. You will have to take the risk. MOQs here are usually 1000pcs (less common) - 5000 pcs(more common). You don't own the formula, and if you want a back up manufacturer or another manufacturer for lower cost, you will have to re-formulate and it won't end up exactly the same (but can be very similar). This is what I am currently doing.

3) Have a formula created for you, and you own the formula (including mixing instructions). This will cost you a few grand. Now with formula in hand you can contact anyone who offers contract manufacturing to make this for you.

Pros: You can take this formula anywhere. Two different contract manufacturers with your instructions can make the same exact produt. You have more options to find the right contract manufacturer for the right price. Because of this, you can usually get this per unit cost the lowest with this option. This is what the big companies do.

Cons: Same as above, you wont know product quality until its made. The formula can suck. MOQ usually higher, but there are some that offer lower ones.

Everyone offers the option of your own packaging and most offer a turn key process. Maybe the most you will have to do is order packaging yourself and ship it to them.

Thanks for sharing all this detailed info. It's good to know the range of options available and what I'm getting myself into. I imagine our goal would be to get to the 3rd, after we've proven the market a bit more. Finding a manufacturer you're happy with seems like a major pain point, but I'm sure it can make or break a brand.
 

TooSlow

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This is something I see quite often so I try to always ask this question.... you say this is a saturated market. Name me a market that is not saturated.

There just seems to be an overwhelming number of existing products that have similar purposes and benefits. Maybe being saturated isn't a bad thing, as long as our products are unique in desirable ways and we're able to make those ways known.

Looking up the meaning of market saturation, using it in this context is probably just a way of saying there's a lot of competition. In a slightly defeatist sort of way, implying one couldn't possibly compete with existing brands.
 

minivanman

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I totally understood what you meant so now I'm asking you to tell me a market that is not saturated with a lot of competition. Just name a market that isn't saturated. Clothing = saturated. Jewelry = saturated. Cleaning = saturated. Mowing = saturated. Marketing = saturated. Web design = saturated. I'm asking you to name me a market that has 0 competition.
 
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TooSlow

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I totally understood what you meant so now I'm asking you to tell me a market that is not saturated with a lot of competition. Just name a market that isn't saturated. Clothing = saturated. Jewelry = saturated. Cleaning = saturated. Mowing = saturated. Marketing = saturated. Web design = saturated. I'm asking you to name me a market that has 0 competition.

Well, I'd say no market can have no competition unless one already has a monopoly in it. Then if it's profitable, some competition is bound to show up. Are you suggesting lots of competition is unavoidable and a poor excuse to avoid a market?
 

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