How much does it cost to create a cosmetic brand?

One of the first questions every client asks when launching a cosmetic brand is the price, that is, how much does it cost to launch a cosmetic product or brand?

This question is indeed important, as at the end of the day a business will be launched, so it is necessary to know the size of the investment required for the business plan and the establishment of the appropriate strategy.

The question of how much it costs to launch a cosmetic brand is like asking how much it costs to build a house? ‍

What kind of house?
How big is it?
What is the wall structure?
What is its insulation like?
Where is it located? etc.

So, there are many questions we need to respond in order to answer this, and we will get precise answers to these questions at the end of the development stage, when we already know the exact formula, the exact packaging and the quantity.

So, what's the solution? Determining the Target Price

First, a target price must be set. Based on this target price, we will develop the cosmetic product.

Secondly, we can provide estimates for various costs, such as:

- Expected Manufacturing Cost

- Packaging Cost

- Other Factors

We can determine this information together with you in our custom service when preparing the Project Initiation Document. Contact us if you want to know more about this service.

Let's see what factors influence the budget

Factors influencing the budget

1. The Formula

The price of a cosmetic formula depends on several factors.

- Concentration:

The price depends on how much of each ingredient we put into the product. It is important to know that in the INCI list, the ingredients must be listed in descending order, except for those that are below 1%, so it may happen that the INCI list of a product looks the same, but the concentration of the ingredients differs, so there can be big differences in quality.

So during development, we can adjust the formula so that the concentration of the active ingredients meets the customer's expectations in terms of effect and price.

- Quality:

Secondly, there can be big differences in quality and therefore price between different raw materials. The same active ingredient, component can vary greatly in price if we buy it from different suppliers.

It is the job of the formulator chemist to select the component of the appropriate quality and effect based on the specifications and studies, because it is not necessarily necessary to use the most expensive component in every case.

2. Minimum Order Quantity

The minimum order quantity of the ingredients and packaging material does not affect the unit price, but it does affect the total budget of the project, as it may happen that we need a special active ingredient, but the minimum order quantity of the raw material is greater than what we need.

In this case, an alternative supplier must be sought, or if there is none, the necessary quantity must be purchased. In this case, the remainder can be used in the next production.

Similarly, in the case of packaging materials, the remainder can be used in the next production if a higher quantity of packaging needs to be purchased.

3. Production Quantity

The quantity to be produced greatly influences the price, as every factory has a size at which it can operate optimally.

If a production is below this, it can mean extra costs, and if it is above this, both the production, packaging and raw materials will be cheaper.

4. Manufacturing Technology

The complexity of the formula and the type, complexity of the packaging greatly influence the price. If a product's packaging cannot be automated, or if the assembly of the box is long and time-consuming, it will affect the price. On the other hand, when this can be automated, the price will also be more favourable.

5. Quality

The overall quality, appearance and positioning of the brand also affect the price. There is a difference between the price of a glass, a premium packaging and a plastic tube.

Similarly, different suppliers work at different prices. A brand image can be created for a few hundred euros, but there are studios that work at prices of tens of thousands of euros. The choice depends on the goals.

6. Development Costs

The question of development costs, which depend on the size and complexity of the project, cannot be ignored.

Developing a very unique, completely new product is more expensive than a product that already exists on the market.

Similarly, the complexity of the packaging and other factors also influence the development costs.

For example, if we want a certification for a product (e.g. Ecocert, Natur, Vegan, Halal, Kosher, etc.), the documentation, administration of the certification can affect the price, as this means extra work.

At the end of the day, however, every client wants to know the answer to the question: