Starting as a beginner firm

Starting a cosmetic line

Starting as a beginner firm

Posted by iditech on February 20, 2017 at 4:00 am

Hello friends,

My name is Daniel C.A, have read several brilliant comments of on this platform and please I need your advise.

Our company based in Prague is into marketing and sales of medical equipment but we want to branch into the cosmetic industry as beginners. We have very basic knowledge about the industry but our strategy is to start up through partnership with experienced companies in this simple manner:

We approach several contract manufacturers (with different categories of cosmetics and formulations) in Germany and Italy to sign an MOU as their affiliate, then we can go ahead to look for clients globally who wants a private label from either a ready made formulation or new R&D formulation. The manufacturing companies will handle the job of clients we successfully contracted and of course we define our commission. We want to start this way until we gain sufficient know how to launch our own manufacturing firm.

Based on your experience, how can you gauge the strategy,could there be certain instruments we need to put in place aside from mere agreements

Comments will be appreciated.

Gunther replied 5 years, 10 months ago 5 Members · 9 Replies
9 Replies

belassi

Member
February 20, 2017 at 5:17 am

This is way beyond my level of business expertise in this industry, we’re just a startup, sorry.
mikethair

Member
February 20, 2017 at 6:26 am

From my experience as the owner of a cosmetics manufacturing company, the first piece of advice is that the marketplace is VERY crowded. This being the case, you need to differentiate the products you intend to offer from this very crowded marketplace. Given your limited knowledge about the industry, this may be a challenge.

Additionally, why don’t these potential clients just approach manufacturers directly, why do they need you.

A good model for you is Le Labo fragrances. Brilliant marketing, to a point where the brand has a cult following, but they outsource the product development. This is an example, in my opinion, where a middleman can be successful…….i.e they provide brilliant marketing and products.
iditech

Member
February 20, 2017 at 8:12 am

@mikethair, thanks. You just mentioned that the market is crowded which implies that manufacturers don’t easily come by tangible clients (medium size to big orders) that will just walk up to them. That is where our marketing expertise will make the difference, we reach out (go look for them) to potential clients not only within vicinity of EU but globally. For instance if we can spot or convince a potential client willing to invest 1 million dollars on a good ready made skin care formulation, we are not gonna let them approach just any manufacturer.

Secondly, we present our company as same team with the manufacturer to the potential client, in this way, they hardly notice any difference. Just a good as a contract manufacturing team having two sections; Production team(our partner manufacturers) and marketing team(our company).
iditech

Member
February 20, 2017 at 5:16 pm

I’m waiting for more comments friends
OldPerry

Member
February 20, 2017 at 6:40 pm

As a website publisher in this topic, a formulator and someone who has worked on brands (others and starting my own) there is a lot of opportunity in the contract manufacturing space. Quite frankly most of the ones that I’ve worked with were not very good in terms of customer service. I don’t think you’ll be able to off-load customer interactions with a secondary manufacturer. If you keep yourself in the middle and have great service, you’ll do alright in my opinion.
iditech

Member
February 21, 2017 at 1:35 am

Thanks @perry I sent you a private message regarding the training program.
mikethair

Member
February 21, 2017 at 4:35 am

@iditech, perhaps a misunderstanding here. When I say “the market is crowded” I meant for cosmetics products generally, not the contract manufacturers. They are not short of work.

Given the large number of products in the marketplace (produced by a much smaller number of manufacturers), and given your lack of knowledge of the marketplace, my point was that it may be a challenge to identify and differentiate the products offered.

I agree with @Perry, a lot of these manufacturers are mediocre, and why not, most are not short of work. Again, another challenge is to get these companies to do something a bit different. My perception is that they are quite happy to churn out the same old stuff.
iditech

Member
February 21, 2017 at 9:55 am

@mikethair, thanks for the clarification. At least I now have a picture of how to go from here.
Gunther

Member
June 8, 2018 at 10:55 pm

@iditech not meant to discourage you
but I think that you’d better start with cleansing products and creams meant for people with medical conditions, yet still OTC.

Then you can get in the pharmaceutical business, probably starting with medicated (prescription) creams, since you’d already have OTC creams at this point.

You already have medical sales reps to offer them to doctors.