With an estimated compound annual growth rate of 7.1% through 2027, and with a global market size of more than $56 billion (according to a 2022 Industry Research report), the cosmetic skincare market presents a myriad of profitable opportunities, including creating and marketing your own product line.
These include skincare products, hair care products, makeup, perfumes, toiletries, deodorants, and oral care products. Skincare products remain the most profitable segment of the market, followed closely by hair care products. What is the cosmetics industry worth in 2021?
It should come as no surprise that cosmetic companies have potential high-profit margins. But it goes without saying that you need to pitch it right in the first place. Too cheap and you'll be associated with cheap brands and products, too expensive and you might not make enough sales.
When you figure in the costs of product development, business, and marketing you realistically need about $10,000 - $20,000 to invest up front. And if you are going to make more than one type of product you should figure on adding $5000 for each additional cosmetic product.
With beauty and personal care ranking among the top online shopping categories not only in the United States but also worldwide, there's no question it's an extremely lucrative industry to be in.
With high start-up costs, employees to manage and an extensive list of rules and regulations; aspiring beauty entrepreneurs need to be as skilled in business management as they are beauty therapy. Many salon owners get business training to enable them to effectively manage running a business and a team of staff.
Currently the most popular beauty product (and by a significant margin), personal care products have held the biggest share of the beauty market for many years. In 2014, its market share was 45.7%. This is expected to hold relatively steady, dipping only by a marginal two percentage points to 43.7% in 2027.
The skincare industry is one of the most lucrative in the world. Currently, experts predict that it will be worth around $200.25 billion by 2025. That's an incredible opportunity for aspiring entrepreneurs interested in starting a skincare line!
Beauty products such as makeup, skincare, fragrance, nail supplies, and wellness products are some of the highest margin products available. With so many suppliers and manufacturers, you'll be sure to find a great wholesale price and the items themselves are often easy to display and market to customers.
Chemical ridden products, vague ingredient labels, and hidden chemicals are three of the major problems with the beauty industry. All these problems stem from one major source: lack of regulation. Lack of regulation enables companies to put unsafe chemicals in products and vaguely label chemicals as “fragrances”.
Face creams and moisturizers held the largest revenue share of over 40.0% in 2021 and are expected to maintain their lead over the forecast period. Face creams and moisturizers are among the most used items as these are frequently applied.
Anyone can set up a home beauty business, you don't always need a lot of kit, and if you're confident in your ability you're good to go. For some people a home beauty business is the dream job, or even side-income.
The national average salary for a salon owner is $40,069 per year . This number can vary greatly depending on the location, type or success of the salon. This potential variation means that a salon owner can influence their income by making choices that benefit the business.
Obtain Licenses
First of all, you'll need to register your salon or spa, and apply for a premises license, with your local authority or council. A premises license will enable you to legally run a salon and perform beauty treatments in the property you've chosen.
Production costs are high, and there are incidentals like packaging and labels that also need to be designed and manufactured, and it all has to come from an upfront investment. And after that, you still have to pay for marketing and advertising.