What are the steps to create a cosmetics, make-up or perfume business in France? What are the keys to success?
Advice from an expert in cosmetic brand creation.
Creating a cosmetics brand and marketing beauty products requires mastering many parameters, including marketing, formulation techniques, sourcing (materials, packaging), regulations, logistics and even commercial development.
The creativity, the ability to communicate and negotiate are all qualities that the cosmetics entrepreneur should possess.
The world of cosmetics is particularly demanding. However, the image of quality and refinement of French cosmetics constitutes an interesting opportunity to exploit.
Create your brand: the beauty products market.
Creating a cosmetics or make-up brand involves knowing the main characteristics of the French and global market for this market. Here they are:
An ultra-competitive market, due to the low barriers to entry: indeed, launching a cosmetics brand is fairly inexpensive and it attracts new entrants.
A market dominated by “wholesale”: the most famous cosmetic brands (L’Oréal, Shiseido, Yves Richer, etc.) tend to dominate 90% of the market. They immediately buy up young rising brands and integrate them into their overall strategy.
A market where marketing and communication are king: in cosmetics, the difference is made more by communication and image than by the intrinsic quality of the products. It is the marketing / operational marketing / sales force budget that makes the difference.
An evolving market: new trends appear regularly (products for men, products based on argon oil, prickly pear or immortelle oil, etc.); some trends fall off in a few years, others persist (natural products, aromatherapy, etc.).
A well-segmented market and niches: a distinction is made between brands intended for professionals (beauticians and hairdressers), those intended for the general public in self-service, those intended for pharmacies, or even those intended for organic stores.
Strong margins: the cost of a cosmetic product is normally low (between 1 $ and 4 $), which can generate a significant margin.
The 4 main obstacles to the development of a new cosmetics brand are:
The lack of a communication budget,
Too few products in the range (or too low a rate of launching new products),
The difficulty in setting up a sales force, the best sales agents are already in great demand,
The difficulty in raising funds to develop.
The regulation of beauty products.
The cosmetics market has been the subject of several European directives which have been transposed into French law, which should be well known if you want to create a cosmetic brand.
Here are the main points of the regulations concerning the marketing of cosmetic products:
obligation to make a declaration of establishment to the ANSM in the event of manufacture, packaging or import of cosmetic products (useless if production is subcontracted),
obligation to designate a person responsible for manufacturing, packaging, importing, quality, safety, and stock monitoring (useless if production is subcontracted),
the container and packaging must include the contact details of the manufacturer or the person responsible for placing the product on the market established in the European Union,
obligation to make available to the control authorities, at the address indicated on the packaging, a file information on the formulation, specifications, safety elements, etc. (article R5131-2 of the public health code).
obligation to include certain particulars on the container and packaging :
date of minimum durability :
If less than 30 months: indicate the number of months, preceded by an hourglass or indicate “to be used before the end of the month / year”
If more than 30 months: indicate the number of months inside an open jar
special precautions for use and warnings
the words “Made in France” or the country of origin for products manufactured outside the EU
The capacity, for example: 30 ml – 1 Fl. Oz.
the list of INCI ingredients as indicated on the product file
Claims: some claims are regulated and must be proven (tests to be carried out by independent laboratories), for example anti-wrinkle, slimming or anti-acne.
Possibly other information: barcode, label of certification bodies, web link, etc.
obligation to carry out laboratory tests, intended to prove that the product is not dangerous:
these tests are carried out by independent laboratories and consist in applying the product to guinea pigs (paid human beings) under normal conditions of use,
it can be, depending on the function of the product of challenge tests, stability tests, skin and eye tolerance tests, pH control and viscosity of safety certificate
these tests are not free: 300 $ to 1000 $ per product tested,
The cost of the tests can be covered by innovation aid (PTR).
The main stages of a cosmetic project are as follows (the order is given for information only):
Carry out a pre-study on the target market segment (example: organic make-up),
Imagine the range: brand name, product name, positioning,
Develop and distribute a market research questionnaire,
Check the availability of the brand name and register it with Identical supplier or subcontractor partners (materials, bottles, packaging); the latter often impose minimum orders, which will determine part of the initial investment,
Develop formulations , test them,
Develop a financial plan and a business plan ,
Seek funding and mobilize any aid,
Identify a production and / or storage space, sign a commercial lease,
Choose your accountant,
Choose a legal status,
Develop the commercial tools and the one-year communication plan,
Create your custom logo design,
Create the other graphic elements: packaging, serigraphs, brochures, brochures, business cards, website and referencing,
Check and comply with regulatory aspects (see below),
Create the company:
With the Chamber of Commerce if there is no own production,
With the Chamber of Trades if there is own production,
We recommend the SAS or SASU form,
Start production and marketing,
Organize a launch event; initiate communication.
The 10 keys to success.
Read carefully these tips for creating a brand of cosmetics, perfume or makeup, they are drawn from real life experiences.
Adopt a very clear positioning.
Positioning must be based on a concept that is easy to identify and remember (example: wine therapy),
It must be understandable in different languages and cultures,
It is advisable to adopt a niche positioning to get out of the game.
Plan the development of ranges in advance.
At startup, it is likely that only a few products can be launched,
But it is good to imagine the complete articulation of the ranges as soon as possible.
Choose a marketing network and don’t change it.
Each cosmetics brand is specialized in a precise distribution network, which makes it possible to convey an image of professionalism and stability,
If you choose the professional network of the beauty or hairdressing institute, you will also have to offer products in cabin format (large format),
Be careful not to compete with your own retail customers with a too visible internet presence.
Adopt communication in French and English from the start.
French and English are the two languages of global cosmetics,
No need to overload the packaging with other languages,
Provide free space on the packaging for possible additional translations for specific markets.
Know what its priority is: production, marketing or both?
Some cosmetic brands manufacture themselves and promote their artisanal know-how, others subcontract to focus on image and marketing: choose your side!
At first, it is illusory to want to do everything (produce and sell): it is better to subcontract production outside.
rovide evidence of effectiveness.
Even if it is difficult to prove, the promise of efficacy remains important in cosmetics. Write a careful argument in this direction,
Beyond efficiency, textures and smells will make the difference.
Aim for luxury.
Going upmarket makes it possible to achieve better margins, sufficient to remunerate any intermediaries (distributors, importers abroad, etc.),
The luxury market is lucrative but demanding: the consumer will not tolerate any defect in the product.
Aim for export:
French cosmetics are very popular abroad, why not take advantage of it?
It is easy to export within the European Union, quite easy to export to the USA and Canada, but more difficult to export to the rest of the world due to restrictive legislation,
Exporting requires planning a price structure that supports the distributors’ margins,
Exporting allows you to collect payments in advance and therefore improve your cash flow,
Choose a single distributor per country, and impose order targets,
Beware of the Chinese market:
Many Chinese companies register trademarks of Western companies with the Chinese administration, without informing them; they then resell the right to use these brands in China at a high price… If you plan to target the Chinese market, consider registering your trademark in China as soon as possible! Be accompanied by specialists for this.
China imposes long and expensive tests on all products.
Count on the bestsellers and stop the least selling products:
Best-sellers provide most of the margin,
Do not hesitate to decline the best-sellers in other products or formats,
Stop the production and marketing of products that are performing poorly and that increase stocks and therefore cash flow.
Succeed in developing:
To develop, a cosmetics company must constantly invest: launching new products, building up a sales force or an export department, etc.
The bank, the integration of associates or the appeal to venture capitalists can be solutions to be studied without delay.