“I want to start my own natural and organic private label hair products. How do I get started and what are the minimums?”
How many times have you called numerous google searches only to find out that most results will respond with, “5,000 pieces per size per bottle” or, “300 Gallon minimum per formula”. While some Contract Manufacturers offer extreme options where, the first option is the massive amount of product you have to commit to before testing the market and the second option is too stringent with no ability to change the fragrance or color.
In the manufacturing world, the first option is fairly standard and categorized as Contract Manufacturing. The second option is categorized as Private Label and often times, Contract Manufacturers were rooted from Private Label. Emerging Brands or Entrepreneurs, even Influencers who wants to create their own private label hair products will often times want to test the market before investing over $50,000 dollars of their own money without knowing if it will be successful or not. Starting a new venture is daunting and exciting but, does it have to break the bank? The options for Emerging Brands are extremely limited. Either commit to Contract Manufacturing minimums of 5,000 units per size, per bottle or commit to a private label product with 48 piece minimum per size, per bottle and have no point of difference with regards to fragrance, color and option from the salon next door who also private label from the same company.
The vast difference of profit margin between Contract Manufacturing and Private Label is also on polar opposites.
Contract Manufacturing will allow you to achieve a low cost per ounce with unlimited influence on every aspect of your formula. The only caveat is that you, the customer, will have to provide the bottle, cap, shippers, and any unique raw materials that you require for your formula to perform the way you envisioned it. If you break this down and look at the macro point of view on exactly what you will be providing to the manufacturers, most bottle minimums are 5,000 units. They will require you to provide a minimum of 10% waste to ensure production continues regardless if 86 bottles are damaged during transit. Caps or closures are often times double the minimum order quantity of the bottle.
Have you forgotten about freight on each component that you will have to provide?
Your end-result may be cost-effective once you have a finished good but, you also have to provide all of these materials on an “as needed basis” per order. So this means, you have to factor in storage on the materials that you are providing. Factor in the freight from the component vendor to your storage facility and then finally, to your manufacturer. When you receive your quote, the cost is only for bulk and fill. If you get a bulk (materials to make your formula) and fill (labor run production with components you provide) cost, factor in all the other expenses you just acquired to get the customer supplied materials to your chosen manufacturer. If you’re a start-up or Emerging Brand, can you still breathe? It’s a lot. It appears and IS overwhelming.
The alternative option is Private Label. From learning the Contract Manufacturing world now, Private Label appears more lucrative. Proceeding with a private label hair product now seems more achievable and sensible since the minimums are so low. The caveat is the origin of the formula. ANYONE can buy or start a private label hair care line.
There are no customization at all.
You can’t change the fragrance, color or performance. The only thing you can customize is the product name; claim, description. However, it will contain your company information on the back of the bottle. If you’re a salon, and you’re located on Main Street where 15 salons are next to each other; and 9 salons bought the same private label hair product from the same company, would anyone be the wiser? Maybe, maybe not. Though, now it becomes a price war and the customers will notice the same fragrance, color, texture and performance. Your point of difference is much slimmer now. In hindsight, what did you tell your customer when you launched your first private label hair products?
Fortunately, there is a cost-effective solution that falls between the 2 alternative. Many Contract Manufacturers have abandoned the Emerging Brands that help them become who they are today. Advanced Cosmetic Research Labs, continues to offer Emerging Brands and Start-ups flexible minimums to custom formulate.
The alternative forces you to purchase 5,000 units per size, per bottle from the start. The minimum converts to a minimum of 400 bottles per month that needs sell-through. Otherwise, you risk a portion of your inventory to expire. The standard shelf life is 2 years from the day your order was batched.
By your reorder, you already have an established following and sell-through shouldn’t be a challenge. ACRL has dedicated filling lines solely for Emerging Brands. Most automated filling lines at ACRL have the capacity to run up to 300,000 unit runs; however, ACRL continues to believe in supporting the Emerging Brands that made them who they are today. Settling for a formula that bears your name should never be the only solution to become a brand. When a product bears your name, your legacy, it should be as the innovator intended it.