The modern beauty industry offers numerous opportunities for growth and development. Among the most popular strategies are distributing ready-made cosmetics and contract manufacturing under a private label. In this article, we will analyze these strategies, their advantages and disadvantages, and will find out why creating your own brand is becoming an increasingly profitable choice.

Distribution of Cosmetics: key aspects

Distribution is the process of distributing and delivering goods from the manufacturer to the end consumer. A distributor acts as a middleman, finding the most profitable sales channels and handling product promotion. Beauty salons often serve as distributors for various cosmetic brands, as it helps boost the average ticket size and generate additional profit.

Advantages of Distribution

1. Easy to start. The distributor gets a ready-to-sell product.
2. Minimal marketing costs: Most professional brands that offer their products for sale through beauty salons already have established marketing strategies, which their distributors can later leverage.
3. Brand loyalty: Selling well-known brands builds greater trust with customers.

Disadvantages of Distribution

1. Low margins: Earnings are limited, as a significant portion of the cost remains with the manufacturer.
2. Lack of exclusivity: Products are sold in other salons, stores, and even on marketplaces.
3. The manufacturer sets the rules. This includes pricing, product range, and other terms that limit the distributor’s flexibility.

Contract Manufacturing Under Your Brand
Contract manufacturing involves creating cosmetics under your own brand by partnering with a third-party manufacturer. This approach allows you to offer a unique product that will be exclusively associated with your salon.

Advantages of Contract Manufacturing

1. High margins: You set the prices, allowing for greater profitability.
2. Uniqueness: Products under your brand aren’t available elsewhere, making your salon stand out from competitors and boosting both its reputation and customer loyalty.
3. Complete control: You decide on formulations, design, and product positioning.
4. Scalability. Your own products can be sold not only in your salon but also through marketplaces, retail cosmetic stores, and even by partnering with distributors.

Disadvantages of Contract Manufacturing

1. Launch process: t requires selecting a product, choosing a manufacturer, creating packaging, etc.
2. Responsibility for promotion: The success of your brand depends on your marketing efforts.

Conclusion: Which Option Should You Choose?
For beauty salons seeking short-term solutions, distribution may seem like an appealing choice. However, in the face of intense competition and growing customer expectations, having your own brand is a strategic decision that unlocks tremendous growth opportunities:

• Increase in profit margins by at least three times
• Enhancement of business and owner status
• Business scalability

And now in figures
A real case of contract production INIT CosmoLAB involves producing a product for use in the salon and for sale to the client.
Product: liquid patches with a revitalization effect.
The main advantages of the proposed product are that patches will not interfere with procedures such as eyelash extensions and that it is extremely economical. The effect of the application is noticeable after the first application in the salon.
·The unit cost price is 390 rubles.
·Retail cost - 990 rubles.
·Profit - 600 rubles.
Implementation strategy: the product is used in the procedures, the specialist tells all its advantages and effectiveness in regular use, and after the procedure, the client notes the first results and is ready to buy.
A batch of 100 pieces of this product was sold in just 2 weeks. After that, it was decided to expand the line of products under own brand.
Today, producing cosmetics does not require huge investments, production facilities, or large batches of products to order. Contract manufacturing offers comfortable conditions for launching your own brand. The main thing is to find a suitable manufacturer who can not only create a quality product, but also help realize any of your ideas.