Ep 76 - Starting a Skin Care Line

0:00:00.2 Speaker 1: Are you an esthetician that has felt unsupported or under-represented in the industry? Have you felt isolated once you left school and have seen others making strides but are unsure how to make this happen for yourself? Do you feel that if you had education, resources and access provided to others that you could kill the game? We are exactly what your career has been missing. Join the network of multi-cultural spa and wellness professionals, a community to help you go from simply surviving to thriving. Visit www.mmswp.com to explore our membership options for individual professionals, students, schools, and corporations or groups. 

 

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0:00:47.8 Speaker 2: You are listening to ASCP Esty Talk, where we share insider tips, industry resources and education for estheticians at every stage of the journey. Let's talk 'cause ASCP knows it's all about you. 

 

0:01:03.4 Maggie Staszcuk: Hello and welcome to ASCP Esty Talk. We're your hosts, Maggie Staszcuk and Ella Cressman, and we have a really fun topic today. How many of you have ever dreamed about starting your own skin care line? Maybe you have a catchy name picked out, you've got the label, types of topics you wanna offer, and the ingredients you'd like to use. So what's stopping you? Today we're gonna take a deeper dive past the ingredients and the fun stuff, and get into the nitty-gritty and the down and dirty of what it takes to start a skin care line. Ella, you're a formulator, did you ever wanna start your own skin care line?  

 

0:01:38.9 Ella Cressman: I did. [chuckle] I actually did, and it came out of... This was, gosh, almost 10 years ago. So I started my own... I'll say I started my own but it was part of my project in formulation school. And I had the name picked out and... Don't... It's not trademarked or anything but nobody can use this. It was Good JuJu. Good JuJu Lips, Pits and Bits. And it came out of frustration of not... And this is way before the natural deodorant market is what it is now, but it was out of frustration for not finding a good quality natural deodorant that worked because that's what I wanted, and smelled good and wasn't staining your clothes. So I did, I did it and I'm like, "Oh, this is really good." At the same time making that balmy texture, I made lip stuff and then, "Oh, what about other areas?" The bits. So I have it, so Good JuJu Bits. And it was so much fun to create and everything. But what happened was, in the middle of creation and everything, I learned a lot. It's way more than the formulation, but something else happened. There's a few key things that changed my life, and this was one of them, and that was the introduction to CBD. So I went on a speed date, a speed date changed my life. I ended up going on a second date with this guy. He said, "Why don't you formulate with CBD?" I said, "What is that?" And this was at the very beginning of that. This was before... It was still scary and illicit. 

 

0:03:03.2 EC: So what happened was, I started researching that and I ended up consulting for lines. And from that I helped develop all the parts and pieces of a line, taking my previous sales experience with some established lines, and then at the very basic foundational part. And it's been fascinating, I've learned so much. And you'd be surprised, there's a lot of considerations when starting a skin care line. 

 

0:03:29.0 MS: So, what does it mean to say you're a formulator but you do or do not create skin care lines?  

 

0:03:36.1 EC: So I'm a formulator by certification. So I'm a certified formulator. So I can create skin care products, I can formulate them. I'm not a chemist. And I recognize in my strengths, I take that information, that knowledge as a licensed esthetician, as a practicing esthetician and as a formulator, and consult on formulations with chemists. So I deal with a lot of chemists on things because there's a lot more moving parts than just the bits and pits and lips that I formulated and I could do when you're looking at sophisticated formulations, because you've gotta think about shelf life, you've gotta think about the types of preservatives that you're using, the interaction of ingredients that working with a CGMP type of lab is going to be better. And when you're working with someone like that, having this knowledge that I have, the certifications that I have, just helps expedite that process. I could formulate. I do formulate, but I don't... For the products that I use, for example, in my spa, I don't formulate those. I rely on the sophisticated ingredients in a CGMP lab for those. 

 

0:04:47.4 MS: I hear people say all the time that they're going to private label and create their own line, but that's not what we're talking about here, right? That's different. 

 

0:04:56.5 EC: It can be. So that very much can be, it can be a consideration. So when you're starting your own line, you have to first and foremost think of funding. Are you gonna be privately funded or you're gonna take on investors? And that... Actually rewind, before you start anything, you have to think about your philosophy. What is your philosophy? And that's gonna help navigate what kind of products you want to develop. Product development, product formulation, product creation is a very expensive process. And so we have a lot of places, a lot of really great labs throughout the country that have done the work, and you can private label those. Some lines when they start out, they'll do original formulation and a couple of product white label or private label products to supplement. So now they have a line because they're not creating a brand new formula, they have one superstar product. And it's like one Dianna Ross and a couple of Supremes, or one Beyonce and a couple of Destiny's Child so that they have a line. 

 

0:05:55.1 EC: So funding is key. That's one thing. First, what's your philosophy, what are you wanting to create? For me, my philosophy was, I want a deodorant that works and that's not gonna give me breast cancer, or not gonna contribute to that. And then the next step would be, what kind of business do I wanna have? Do I wanna have the self-funded, which is possible. There is one line that's very, very popular right now that they did it. They did self-funding and what they have done is remarkable with what... They did a slow roll and then a quick take-off, and that's remarkable. And parallel to them, I watched these two lines develop at the same time. Parallel was this other line who had investors and there's different requirements when you have that. So they were able to come to market faster with a wider SKU range. But they just had different outcomes. It's very interesting. 

 

0:06:44.8 MS: So how much money are we talking about when you say funding?  

 

0:06:49.3 EC: Okay. Let's talk about what goes into the funding. It's more than just the product. Let's use lotion as an example. We're just gonna say lotion, you could call it cream, whatever. It's more than just how much does one ounce of cream cost. It also is testing for the cream, stability testing, mold testing, they usually go through an incubation testing part. You also wanna consider packaging, is a huge part of that. And then you have to consider marketing, and marketing is so much more than just social media, if it were that easy, because there's a lot of marketing that has to happen. And so that brings another consideration of who's your target market. So when you're looking at one product, for example, you want to... Then you have something called MOQs, which are minimum order qualification is what that stands for. So whether you're a private label or custom formulation, you'll have a different MOQ depending. So custom formulation, the MOQ per SKU, so per product, per lotion, if you will. Let's say you want a lotion, a serum, and a lip. Each is considered a SKU, and so you're gonna have usually a 3000-5000 minimum per SKU. So that means you're gonna have to buy 3000 lips, 3000 creams or lotions, and 3000 serums. That's a lot. [chuckle] 

 

0:08:12.0 EC: And then you have to think of bottle, packaging, all those other components, labels, what's your philosophy, goes back to what's your philosophy. If you are built on sustainability and we want to have custom packaging, there's a longer lead time for that versus something that you're getting already made. So lead time for product development is probably one of the biggest questions because a consideration is, once I've got a product and I've got a formulation, then what happens next? The lead time was, check this out, it was 17-34 weeks before the pandemic. But now things have slowed down, not just for ingredient sourcing but also for packaging, so that 17-34 weeks is now almost doubled. 

 

0:09:00.0 MS: Oh, wow. 

 

0:09:00.8 EC: Yeah, so we're talking... That's a lot, it was sometimes over a year just to get things in. So that's another consideration that you have to think of. Shelf life, when we're talking about 5000 units, you've gotta have a really good marketing plan to make sure that you're selling 5000 units within that two to three-year time plan, because that's a question that, as a practitioner, we ask, what's the shelf life? But also what we don't consider is, how long has it been sitting in a warehouse before it got to our shelves? Right?  

 

0:09:30.0 MS: Yeah, totally. 

 

0:09:32.8 EC: So that's one thing to think about. I was working with a company last year who had an amazing product but they had a sour media plan. And so with that... Or they had a sour marketing plan. And so they ended up throwing away $300,000 worth of product because it expired. 

 

0:09:53.0 MS: They just couldn't sell it, or what?  

 

0:09:55.7 EC: They couldn't sell it because their marketing strategy was not working. And in the 11th hour, literally the last 11 months of this three years, they tried super aggressively. They tried different marketing strategies, most of it was e-commerce and it just didn't work. And the product was great, the packaging was beautiful, the philosophy was amazing, but they just didn't have the steps in place beforehand. So that's another thing to think of even before... I think naturally, we're like, "I want a better moisturizer. I want a moisturizer that's gonna do this, that, and the other." And that's the first inclination is to think about, right? But oftentimes, you need to think about where you're going. What is your go-to market strategy? Are you going to be selling directly to consumers? Or Are you gonna be selling directly to businesses? In our profession, for example, as an esthetician, we have product companies that we deal with and product reps, so that would be business-to-business sales, and with that, then there's different discounts that you offer. We get stuff at wholesale. So that is going to determine your pricing. You have to think, "Is this gonna be an attainable cream or moisturizer that the end user is going to be able to purchase and want to purchase at this price point?" But also for the practitioner to purchase and have their 100% mark-up. 

 

0:11:20.7 Speaker 2: Hey guys, stop. Let's take a quick break. 

 

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0:12:04.3 S2: Let's get back to the conversation. 

 

0:12:06.0 MS: Yeah, and as far as going back to funding or how much collateral you need, you gotta be thinking too about that market strategy, because that's costing you money too, right?  

 

0:12:15.9 EC: The market strategy is costing money. One that I will tell you, the best thing that anyone can do, first and foremost, is to get a PR person. I have seen people early on, and PR is an expensive... Runs around three... Depending on what you're getting, it runs around $3000-5000 a month for a good PR person, depending... But they're able to get you in magazines... They're like your hype man. They're like your placement people. So they're giving you the street cred to be like, "Oh, we were in this magazine, we were on this, we were featured in this." They will seek out awards and submit for you as well. So it's very, very important to do that, but that's just one part of the marketing, is the PR. We also have to consider in this day and age, which was different when my Good JuJu Pits and Bits stuff was there, is the social media. Now, with social media ads, there's an ad budget you can have. And so how many ads, what's your target market? Well, even if you're doing business-to-business or business-to-consumer, you have to think about what is it gonna look like when it shows up on their door?  

 

0:13:21.9 EC: One of my favorite products is this natural perfume called Pflur, it's spelled P-F-L-U-R, and it's so thoughtfully packaged that it's, "Dear Ella, what happened was we made this perfume just for you on this day," and that's really just my invoice. I'm like, "That is so creative." And the way the box is packaged, is all marketed and branded, that's really, really smart. But I know that it's reflected in the cost of the perfume I bought. [chuckle] 

 

0:13:51.7 MS: Totally. 

 

0:13:53.5 EC: And I bought it because of the philosophy of it's natural and it's gonna be less harmful for me. 

 

0:14:00.7 MS: How often do we say, you're buying the brand, right? In all things, whether it's a car or a piece of clothing. It may be a total crap, but you're buying the name, and that goes for product lines too. It may not be clean, it could potentially have bad ingredients, but you're buying that name in many cases. And that I think is partly with that marketing, that PR. If they're doing a good job and the word gets out, the price goes up, right?  

 

0:14:28.8 EC: Yeah, everyone else is doing it. Let me check it out. Then, especially now with influencers, like Guilty. I bought a Kylie lip kit. Guilty, Guilty. I did it because I'm like, "Oh, it's gonna sell out, I need to try this. I wanna try and see what this is." So that's another class you have to think about too, is the price of... Doing business now is different, where we're not advertising in magazines the same way. It's just a little bit different, but we're also adding in the additional cost of paying influencers. And now they have micro-influencers so that you can negotiate product for. But these micro-influencers are not Kylie Jenner, are not these other people. These are people who have blogs and you have to look at how many followers do they have. I think micro-influencers qualify as anyone that has 5000-12,000 followers, or 5000-30,000, I don't remember offhand right now. So that they've got a little bit more of a buzz, maybe a more intimate relationship with their followers. So you have to think about that too. Also, if you're going to create a skin care line and sell it in a high-end grocery store, we were talking about Whole Foods before, there are other costs that you have to think about when you're considering that. 

 

0:15:45.4 EC: You have to think of shelf... There's a say, in some cases, you use a broker for that. So you have to pay a shelf placement fee just to get on the shelf. Then part of that too, not all the time, but sometimes you have to give them cases of each SKU that they are going to sell to see how it goes. And if it goes well, then they'll make the PO. But the PO, they want a significant discount. So it's a lot bigger discount than like the wholesale that we're used to getting. So I always appreciate that when I'm strolling through the aisles at Target or at Vitamin Cottage or anywhere, it's like, "Oh, you made it." I always saw and I'm like, "This is awesome." And then I think about how much it really cost them to make the product, how much they probably sold it for, how much Target's making from it, and I'm just like, "But they did it. [laughter] So woo." 

 

0:16:47.5 MS: That's funny. That makes me think of kiosks in the mall. They're paying to be there and giving money back to the mall. You don't think about that when you're walking through Whole Foods or something like that. That's the same concept. 

 

0:17:00.9 EC: No, you're just trying to not make eye contact so then they won't run their Dead Sea scrubs all on you. And that's what I'm doing anyways. I'm like, "I'm sorry, no, no, enough." [chuckle] It's very interesting. It's different than walking by Bath & Body Works or something in the mall. I guess I would say, if you are going to start your own skin care line, what I would start with is your philosophy. The next one is what kind of business are you gonna be, think about funding, consider lead times and understanding really how long you're going to have to do these things. The next you're gonna think about packaging, not just what does it look like, but what does it match your philosophy? Are you gonna have bottles? Are they gonna be glass? Because that's gonna affect shipping. Labels, are you gonna have printed labels? Because that makes a difference with the manufacture of your product, if they can label your stuff or not. Are you gonna have shrink wrap labels? Are you gonna have soy ink? That's biodegradable. These are these intricacies that you don't think of when you pick up that product and squirt a little on your hand and put it on your face. 

 

0:18:00.7 EC: The other thing you have to think of is labeling, real estate wise? There are certain requirements the FDA has for inclusions and white space and font size. This is a whole other thing. Next you wanna think about your minimum order to qualification, what is that, private label? You can get away with a lot less white label, but then that's not yours, you didn't make it. If you make any adjustments, there's another fee and then a higher MOQ. So keeping that in mind when you're looking at shelf life, understanding testing, especially for SPF, or anything that has a drug, what the FDA considers a drug like salicylic acid, for example, or SPF, those have to go through an additional testing per batch, and each time that's $3000-5000 in testing per batch. So every time you do that. So if you're like, I wanna make the world's most amazing sunscreen, understand that that's gonna be an additional cost. What is your go-to market strategy? Are you gonna sell to professional only? Because some considerations there are gonna be, how are you getting it to the professionals? Are you gonna have a sales team? What are their commission compensations going to be? Are they going to be employees? All things to think about. Are you gonna sell directly to a Whole Foods or Target? And think about those costs. 

 

0:19:23.2 EC: Are you gonna to do an e-commerce business and sell directly to consumer? Which is another option as well. Either way, you're gonna think about your marketing. What is your marketing collateral? It's gonna be different for a professional business like ours versus a big box store or a direct-to-consumer e-commerce. What is your social media plan gonna be? Because that's something you could start rolling out as you're dealing with these lead times of everything getting the ball rolling or starting the drum roll. What's your case packaging gonna look like if you're going to have something like this? Are you gonna have a minimum order qualification for your account if you're selling wholesale? And then always, always think about PR. And then don't forget, this is one thing that happens, don't forget your general and administrative cost. You're gonna need a really good accountant, a good HR person, potentially, and a good lawyer. So all of those things, and if you're still not scared away, then do it. [laughter] Do it. 

 

0:20:28.2 MS: This is my final question for you, Ella. For that esthetician who is saying... To your point earlier, I just want a better moisturizer that they can incorporate into their little sweet or little treatment room, use on the clients that they have three days a week, but they're not looking to change the world, to sell on Amazon. What does that look like?  

 

0:20:53.7 EC: I think that you should go partner with some people. Talk to your favorite brands that you do use. What's missing? Reach out to somebody that you do like. I know they listen because I've worked with a lot of brands. They hear you, they hear you. And then also be patient because remember lead times. [chuckle] But they do hear you. If there's something missing, it's probably out there or pretty close out there. So lean on your peers and ask questions, or ask your favorite line and see what they can do. 

 

0:21:24.4 S1: Now, listeners, we want to hear from you. What are your thoughts on starting a skin care line? Is it more complicated than you thought, or are you now inspired to finally start something you're passionate about? Let us know on social media, Twitter, Instagram, Facebook, or by emailing getconnected@ascpskincare.com. We want to know all the details. In the meantime, thank you for listening to ASCP Esty Talk. For more information on this episode or for ways to connect with Maggie or Ella, or to learn more about ASCP, check out the show notes. Stay tuned for the next episode of ASCP Esty Talk. 

 

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0:22:00.4 S2: Thanks for joining us today. If you like what you hear and you want more, subscribe. If you wanna belong to the only all-inclusive association for estheticians that includes professional liability insurance, education, industry insights and an opportunity to spotlight your sick skills, join at ascpskincare.com, only $259 per year for all this goodness. ASCP knows it's all about you.