How Much Does it Cost to Start a Skincare Business

The skincare industry is booming, and in the US alone, the beauty industry was valued at more than 100 billion US dollars in 2024. It makes perfect sense for you to want to enter the market and get a piece of that billion piece pie!

A dream and a passion for skincare is a great place to start. But let’s not forget that with every business venture, careful financial planning is necessary too. That way, you’ll be able to assess all risks and ensure that your skincare business can thrive!

Let’s dive into how much does it cost to start a skincare business and explore your options to keep the initial investment low.

Key Expenses in starting a private label skincare business

Choose the right products for your brand through detailed market research

There are two crucial steps that should go hand-in-hand when you’ve decided on starting your own skincare brand: deciding on your business’ niche and choosing products that align with it. Are you passionate about all things organic? Or maybe you want to focus on skincare for a specific age group?

Once you’re set on what values your brand will embody, it’s time to start thinking about your products!

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To be really sure about the products that will bring your beauty brand’s story to life, you need to order samples from different manufacturers. You want to make sure that all products you sell meets your and your customer’s expectations, from texture to scent and active ingredients.

Depending on the manufacturer, some will require you to purchase samples for the full price of the product. But most private label skincare manufacturers will offer samples for a fraction of the full price.

Consider initial inventory costs and minimum order quantities

Once you’ve chosen the right products based on the samples, the next thing you should think about is your initial inventory. The price of your initial inventory will heavily depend on your supplier’s Minimum Order Quantities (MOQs).

MOQ is the minimum number of products that your supplier will allow you to purchase in one order. And again, MOQs vary by manufacturer and your needs, so you should get yourself familiar with how many units your supplier will allow you to purchase.

During this step, you have to be both careful and realistic — since you’re starting from the ground up, you don’t want to order too much inventory without knowing if it’ll sell.

Some brands choose to order products in bulk for better profit margins, while others go for dropshipping to lower the upfront production costs. Don’t worry if these terms sound unfamiliar, we’ll expand on the benefits of both in this article.

We suggest starting slow and growing your business bit by bit, while your audience might not yet be too big.

Pay attention to branding and packaging

As we’ve established in the beginning, the skincare market can be a highly competitive one. To stand out from mammoth brands on the store shelves, you need to have a strong branding and appealing packaging. A strong brand identity is crucial for differentiating your products in a crowded market and influencing consumer perception.

The way you establish your branding depends on your available resources. If you’re trying to keep the initial investment as low as possible, you can go a more affordable route, for example, doing the branding yourself or asking help from a friend with experience in branding and design.

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If you’re ready to invest a little more upfront, you can go to an experienced professional or agency to help you develop your branding A to Z. If you’re looking to partner with Selfnamed, you can use our free Design Studio to create beauty product designs by yourself or trust our talented team to create exquisite packaging for you.

Keep in mind that either way, developing branding and quality packaging is not a piece of cake and if you decide to go a more DIY way, do a lot of research on what actually branding entails. It’s not just a logo, it’s the color schemes on your packaging, your brand messaging, your website, fonts, and so much more!

Work on your marketing and sales

Let’s dig deeper into how much it costs to start a skincare brand. In this section we’re going to look at the oh, so important marketing and sales.

Let’s be honest, you could have the greatest products and the most exquisite branding, but if you don’t tell the world about it, you’re not likely to see many sales. But hey, thankfully, there are multiple marketing strategies and techniques you can try!

The main aspects you should have in order when you start your business should definitely be:

• Your ecommerce platform,

• Your website,

• Your social media channels.

All of these you can definitely learn to do yourself or once again, trust a professional to do them for you, and that’s where the cost varies.

Speaking of ecommerce platforms, there are many out there that are beginner friendly with lots of easily adaptable templates. You just have to choose which suits your needs and capabilities more, like WooCommerce vs. Shopify, and many others. The best part is that your ecommerce platform can double as your website since you can add more sections to it than just the shop. Two birds with one stone!

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Sometimes people say if you’re not on social media, do you even exist at all? This is true for businesses as well.

More and more people are starting to use social media as search engines — it’s a great opportunity to grow your brand’s visibility. That’s why in the early stages, you should check out whether your business’ name is available on the social channels you want to be on, think about how you’ll approach marketing photos (take them yourself or hire a professional), how often you’ll post, whether you’re going to use paid promo, and more.

For a new and small brand, a good way to enter the skincare space online is to approach micro and nano influencers. Not only is there more chance these influencers with smaller audiences will agree to a review on their channels in exchange for your products, the recent trends show that people trust smaller influencers’ opinions more than big influencers’ with millions of followers.

Can’t forget distribution and logistics

The next big challenge on your way to a skincare brand is distribution and logistics. It includes everything from warehousing to manufacturing processes, inventory management, shipping, and order fulfillment.

Distribution and logistics can be a significant expense, so it's important to budget for these costs carefully.

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You want to reach a balance where your products get to your customers quickly and efficiently while you’re keeping your costs as low as possible. This is where you need to decide whether you’re going to handle warehousing, fulfillment and shipping in-house or trust a third-party, like a private label skincare supplier, to do it for you. Essentially, you’re deciding between bulk vs. dropshipping.

Both ways come with their challenges and good sides, here’s a quick comparison:

	Buying in bulk	Dropshipping
Warehousing	Requires additional costs for a space or a warehouse to rent if your inventory is large	Takes care of warehousing for you, the cost included in the fulfillment price
Shipping	More cost-effective for a small businesses, but when orders grow, will take a lot of your time and resources	Saves your time and streamlines operations, but higher shipping costs

Your strategy depends on how much time and finances you’re ready to spend on your business. If you’re full-time from the beginning, in-house fulfillment might be the right choice for you until you grow bigger, whereas if you’re starting your business as a side hustle, partnering with a third-party supplier might be the best choice for you.

Let’s talk numbers: estimated cost breakdown based on the scale and manufacturing costs

As you might’ve noticed so far, the options are plenty, and the cost of launching a skincare brand varies based on your resources. Let’s do a breakdown between a small, medium, and large launch to understand where you might fit. Manufacturing costs are a crucial ongoing expense that must be factored into your budget.

Small scale launch

A small-scale launch is ideal for testing the market with a limited product line and smaller production runs. This approach keeps costs manageable while allowing room for growth. Using private label products can help keep costs manageable while ensuring quality and safety through pre-existing product tests.

This is the best approach if you’re a solo entrepreneur or a small business, selling on social media or a basic ecommerce site.

	In-house fulfillment	Private label skincare supplier
Product sampling	$500 – $2,000	$20 – $1,000
Initial inventory (with low MOQs)	$1,000 – $5,000	$0
Branding and packaging	$500 – $2,000	$15 – $100
Marketing (website setup)	$25 – $70	$25 – $70
Shipping and logistics	$500 – $1,500	$5 – $30

Medium scale launch

A mid-range launch allows for a broader product range, higher inventory, and more professional branding. You might also expand your marketing with paid influencer partnerships, a more quality website, and so on.

This will work best if you’re a small to medium business, selling on your own website, and looking to expand your operations.

	In-house fulfillment	Private label skincare supplier
Product sampling	$1,500 – $5,000	$20 – $1,000
Initial inventory (with low MOQs)	$5,000 – $20,000	$0
Branding and packaging	$2,000 – $7,000	$15 – $100
Marketing (website setup)	$1,000 – $10,000	$1,000 – $10,000
Shipping and logistics	$2,500 – $8,000	$5 – $50

Large scale launch

Large scale launch will require mass production, advanced branding, a wide PR and marketing campaign for the launch as well as a long-term strategy, high quality packaging, and a great number of products.

With a financial contribution this high, it’s usually done by experienced entrepreneurs, investors, or mass-market brands, and their parent companies.

	In-house fulfillment	Private label skincare supplier
Product sampling	$5,000 – $20,000	$20 – $1,000
Initial inventory (with low MOQs)	$20,000 – $100,000	$0
Branding and packaging	$10,000 – $30,000	$15 – $100
Marketing (website setup)	$10,000 – $50,000	$10,000 – $50,000
Shipping and logistics	$5,000 – $50,000	$5 – $90

Budgeting and Cost-Saving Tips

Deciding where to start, where to save, and what to invest more in when starting a skincare brand can be a tough nut to crack. But with careful research and planning, you can launch your own skincare brand without too much hassle.

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Here’s where we suggest to start when thinking about expenses:

• Start with partnering with a private label skincare supplier. This will allow you to sell their well-tested formulas under your own brand.

• Start with a Minimal Viable Product (MVP). Launching a full product line can be expensive, instead, focus on one or two products at the beginning, invest more in them, and gather feedback before expanding.

• Optimize packaging costs by opting for packaging with private labels instead of fully custom packaging.

• Be smart about your marketing! Use more cost-effective strategies with organic marketing, product for review and user-generated content (UGC) partnerships.

So what’s next for your business?

Launching a skincare brand cost-efficiently requires careful planning, assessing your options, budgeting smartly, and on top of that, a sprinkle of patience. Starting a skin care business involves finding a niche, budgeting for materials and manufacturing, and understanding safety regulations and labeling laws. Once you go through these step-by-step, you should be all ready to launch:

• Choose products that align with your brand vision and values,

• Check out your supplier’s MOQs and be careful to not go over your initial planned investment,

• Develop branding and packaging that suits both your brand and your financial capabilities at the time of the launch,

• Play smarter not harder with marketing and try more organic and low-cost strategies,

• Decide if you’re ready to donate a big amount of your time to fulfill orders or if you’d rather trust a third-party supplier.

Deciding to start your own business is already a huge and brave step to success that not many can do. May your determination keep you calm through the adventures in the financial jungle and good luck with your skincare brand!