How To Start A Skin Care Products Business In South Africa
What is Skin Care Products?
Skin care is the range of practices that support skin integrity, enhance its appearance and relieve skin conditions. They can include nutrition, avoidance of excessive sun exposure and appropriate use of emollients.
How To Start A Skin Care Products Business In South Africa
1.Know Your Customers
Knowing what your customers want can help you develop successful skincare products. Determine who you want as a customer and find out what appeals to them. Are they looking for organic products with natural ingredients? Sustainably sourced or clean ingredients? Are they more concerned with anti-aging or concealment of past skin damage? Target your products to your customers.
2.Know the Trends in the Market
In addition to your initial research, keep up to date on the beauty industry and skincare market trends. Skincare is a rapidly evolving industry. Hyaluronic acid to fight aging, niacinamide to calm inflammation, and retinol to even out skin, once unheard of, are now all the rage. Make sure you are incorporating the latest trends of the marketplace into your product line.
3.Create Your Skincare Product Line
First, do extensive research on the skincare products you offer. Will you address trouble areas such as acne, dry skin, or oily skin? Will your products help anti-aging or protect from sun damage? Will you have an extensive line or one hero product?
How you stand out against your competition is a critical step in creating your brand. What ingredients will you use? Will you have a special ingredient that makes your product stand out? Can it be used on sensitive skin?
Second, determine how to create the products. Are you making your formulas or hiring a chemist to develop your skincare products? You may consider enlisting a “private label” company to manufacture your products and give them your ingredient preferences.
4.Protect Your Product Line
Your formulas are proprietary, so you should take steps to protect your work from your competition. An original skincare formula is intellectual property and is subject to patent protection. Consult with a lawyer specializing in intellectual property to safeguard your products.
5.Create Your Brand
Almost as important as your product is the brand you create. You should invest time and money into perfecting an image that will captivate your customer base. Create labels, packaging, and logos that are appealing to your target audience.
One caveat when labeling your skincare products, you cannot make false or misleading claims. For example, you cannot claim to cure a disease. The FDA has specific guidelines on claims made on cosmetic and skincare product labels.
Your brand name, logos, and slogans are also intellectual property you can protect under trademark law. Again, an attorney specializing in intellectual property can guide you in what steps to take in protecting your brand.
6.Research Your Manufacturing Capability
Once you have developed your formulas and product lines, how will you scale them to a large customer base? Determine if you will manufacture your products in-house or outsource to a manufacturing company.
If you outsource with a skincare manufacturer, make sure you negotiate a contract on your terms. Spell out what ingredients they should use and where they should source the ingredients.
- Where is the manufacturer located? Are they convenient to work with (i.e., are they in another time zone)?
- What other customers do they have in the cosmetic, beauty, and skincare space? Will they compete with your products?
- How is their customer service? Can you talk to some of their clients to find out their experiences?
- What is their ability to scale up if you have a sudden surge in business?
When you enter into an agreement with a manufacturer, having a business attorney review the contract terms is helpful. They will advise you of any concerns that could cause future problems.
7.Write a Business Plan
Any business needs a well-thought-out business plan, and the skincare business is no exception. A comprehensive business plan will outline your customer base, competition, funding needs, costs and expected profits, and how you plan to implement your ideas.
Banks or investors will want to review your business plan before giving you money. Therefore, it is good to have a developed business plan to get the cash you need for your business.
8.Promote Your Products
Promote your skincare products with social media. Use YouTube, Instagram, or Tiktok to highlight the advantages of your skincare line. Throw skincare parties to demonstrate your products and allow potential customers to sample them.
Link up with influencers (or, in this industry, “skinfluencers”) to recommend your skincare products to their fan base. Often you provide the influencers with free products they can sample and talk about on their social media. Do your research first to make sure your promoters are in line with your brand.
While promoting the benefits, be careful of any claims you make. The Federal Trade Commission regulates truth in advertising.
9.Protect Yourself from Liability
Because your products may potentially affect a consumer negatively, you want to avoid personal liability. Two critical ways to protect yourself are through forming a corporate entity and getting product liability insurance.
10.Corporate Entity
Forming a corporate entity, either a corporation, limited partnership, or limited liability company (LLC), separates your business profits, losses, and liabilities from your personal assets.
You can register your corporation with your Secretary of State.
11.Product Liability Insurance
Product liability insurance protects you from claims consumers make for defects of or damages your product. Because your product goes on the skin, you will want to make sure you are not liable for personal injury claims.
12.Make it Legal
In addition to forming your company through a corporation or LLC, you should obtain any business licenses or permits to operate your business. Contact your local and state license boards to find out the requirements.
Get an Employee Identification Number (EIN) to file taxes on your business. You can file for one online with the Internal Revenue Service (IRS).
13.Get Professional Advice
Launching a successful skincare company is challenging. Get your business off to the right start by consulting a local business attorney. Not only can they advise you on how to set up your company correctly, but they can also protect you from liability and safeguard your products and your brand from competitors.
Frequently Asked Questions (FAQs).
How much money do you need to start a skincare business in South Africa?
Starting a skincare line of your own does require some initial investment, but the amount you spend will often depend on the kind of company you want to run. Costs range from about R2,000 to R20,000 in most cases, depending on your product selection, order numbers, packaging requirements, and more.
Do you need a license to sell skin care products in South Africa?
A license is required for cosmetic product manufacturing and to market them in India according to Drug and Cosmetics Act, 1940. The manufactured products, Raw material and even the labels have been seized by us.
How much does it cost to start a skincare line in South Africa?
But how much does it cost to start a skincare line? Depending on what type of product you sell, manufacturing cost and location, and other things like packaging requirements, a skincare company can cost anywhere from R2000 to R32,000 to start, with the average skincare company costing just over R17,000.
Can I make and sell my own beauty products in South Africa?
It’s not against the law to manufacture cosmetics in your home. Keep in mind, however, that it’s your responsibility to manufacture products in an environment that will not cause them to become adulterated. FDA does not have regulations specifying good manufacturing practices (GMP) for cosmetics.
Do you need a degree to start a skincare line in South Africa?
If you want to start you own cosmetic line, you do not need any degree in particular. In this case you could get a degree in any subject you want. You should take some chemistry and business courses, but you may want to just learn how to start a business.
Is it legal to sell homemade skin care products in South Africa?
The law does not require cosmetic products and ingredients, except for color additives, to be approved by FDA before they go on the market. However, cosmetics must not be adulterated or misbranded.
Do you need a license to sell skin care products in South Africa?
Do you need a license to sell cosmetics in South Africa? The South African Bureau of Standards (SABS) together with the CTFA (SA) and industry has developed a range of standards. Cosmetic products are not subject to registration. There is an in-market control system rather than a pre-market control system.
Can I sell soap without a license in South Africa?
There are no specific courses or licenses for soap if you do not plan to sell it large scale. Just making them for yourself and friends is okay. If you are expanding your business and go commercial you need to apply for a license.
What is cosmetics in pharmacy in South Africa?
Cosmetics are products you apply to your body to clean it, make it more attractive, or change the way it looks. They include: Hair dyes. Makeup. Perfumes.
Do I need a license to sell medical supplies in South Africa?
South Africa does not currently require the registration of medical devices prior to their sale in the country, as it does for medicines. However, as of March 2020, all establishments manufacturing, distributing, and marketing medical devices must be licensed by SAHPRA.