35 Pros & Cons Of Starting A Cosmetic Brand (2024)

Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

Ability to start your business from home

It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!

Little startup costs required

The cost to start a cosmetic brand costs significantly less money than most businesses, ranging anywhere from 12 to 27,209.

Rewarding work

Starting a cosmetic brand can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

Traffic to your website

A cosmetic brand gives people a reason to visit your website and to keep coming back to you!

High margins

The gross margins for your cosmetic brand are typically around 40%, which is considerably high and allows you to grow your business and manage costs easily.

Quick build time

The average time it takes to build your product is quick - typically around 7 months. This will allow you to bring your product to market faster.

Easy to encourage "impulse buy"

In the cosmetic brand, you have a much higher chance of encouraging your customers to buy on impulse - you can easily alter the price, placement, packaging, and promotional value to influence the decision of your buyer.

Unlimited income potential

With starting a cosmetic brand there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.

Amazing perks and discounts

Working in the cosmetic brand comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.

You are your own boss!

With starting a cosmetic brand, you are the one to make decisions for almost all of the operations. Calling the shots can be empowering and liberating!

Higher likelihood of getting referrals

This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.

You can sell your product in various places!

There are various different markets to sell your product, which will help you reach different audiences and revenue streams.

Simple business model

A cosmetic brand has the advantage of a simple business model, which makes launching and building the business more seamless.

Control your own destiny

Starting A Cosmetic Brand allows you to control every aspect of your life and make your own dreams come true every day.

You get to do something you truly love

With starting a cosmetic brand, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful.

You can work from anywhere!

Not only can you start your cosmetic brand from home, you can also run your business from anywhere in the world. This is the entrepreneur dream.

Ecommerce retail is growing fast

Ecommerce has been grown rapidly over the years and is expected to hit a total of 4.9 trillion dollars by 2021.

With running an ecommerce business, you provide your customers with alternative and more convenient shopping experience, which will ultimately drive sales.

You can promote and sell your product on Amazon

Although there are some disadvantages to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.

Various different ways to make money

With starting a cosmetic brand, there is not just one business model to choose from. This field is amazing in that there are various different ways to make money. Although this may complicate things, it's great to have different options and sources of revenue.

Make money while you sleep

The advantage of starting a cosmetic brand is that you have the ability to have passive income and make money while you sleep. This is the dream for many entrepreneurs.

Crowded Space

Competition is high when it comes to your cosmetic brand, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.

Finding The Right Supplier

Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section.

Security Issues

With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.

Lack of benefits

With a cosmetic brand, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.

Isolation

Often times, as a cosmetic brand, you typically work alone and do not have much face-to-face interaction with other team members.

Taxes

As a cosmetic brand, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

No safety net

Typically, as a cosmetic brand, you do not receive a consistent pay-check and instead earn money based on your transactions each month. During the slow periods, you typically take away less since the job is based on commission. It's important to budget accordingly for the slow times.

High overhead expenses

With starting a cosmetic brand, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Work can be repetitive

You may find creating the same product over and over repetitive and tiresome. One way of avoiding this is to diversify product lines and revenue streams - this will keep things interesting!

Difficult to build trust with your customer

With starting a cosmetic brand, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Minimal physical activity

A big part of starting a cosmetic brand is sitting at a desk for the majority of the day starting at your computer. Some may enjoy this, but others may struggle with sitting for the majority of your day without much physical activity.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.