How to Break Into the Beauty Business

Before I launched the Indie Beauty Network (IBN) in 2000, I owned a small cosmetics company in my hometown of Washington, DC. While I enjoyed making and selling products, I quickly noticed that my soaps and lotions were not nearly as appealing as those offered by many of my colleagues. My gift is not in making products, but in helping other people successfully market the products they make, and IBN was born from this passion.

Over the years, I have seen thousands of beauty companies come and go. All day, every day, I am assessing, consuming, filtering and slogging through a boatload of industry information. This process allows me to observe the habits of successful and unsuccessful companies, many of which are highlighted in Indie Beauty University, which I host and lead. Not surprisingly, I’ve learned what works and doesn’t work. If you think 2011 is the year you’ll break into the beauty business, or make an existing beauty business more successful, these tips will help steer you in the right direction.

1. Establish a niche.

Many beauty startups invest way too much time researching and perfecting recipes and product lines before (or without ever) identifying a precise niche market. Since everyone uses soap and lotion, it stands to reason that everyone also buys it. But that doesn’t mean they’ll buy it from you, and that’s what matters to your business. Of course you must develop good-quality products before launching, but you have to do it quickly, and you must simultaneously identify your niche.

As good as your products are, someone else’s are better, or even if they’re not, they do a better job of selling them. But if you have a niche, you can “own” a specific part of the market and fill it with people who love not only your products, but also you and your brand. These buyer personas (as David Meerman Scott describes them) have specific problems that can be solved only by specific products offered by you. The process of identifying the problem your products address leads directly to a unique niche that only you can fill.

La Dolce Diva, an Atlanta-based bath and body line by Jennifer Kirkwood, offers a good example of serving a specific niche. Jennifer’s fashion design career took her around the globe. She’s a fun, hip diva girl who loves to travel but, as she says, her heart is always in Italy. From the Italian landscape to the delicious gelato and biscotti, Jennifer knows Italy and she shares her passion through her upscale, high-end products. Products like Almond Biscotti Sugar Scrub, Limoncello Hand Wash, and Gelato Shea Body Butter are aimed squarely at a specific buyer persona — people who see themselves as well-traveled divas.

2. Keep it simple.

There are countless ingredients, fragrances, bottles and packaging options available to you as a cosmetics manufacturer. So many, in fact, that you could spend a lifetime creating fancy products with the latest and greatest ingredients — and still never turn a profit. At some point, you have to decide on something simple and effective, and then market the heck out of it.

Think about it. The market is saturated with companies making ridiculous claims that their products can get rid of wrinkles, keep your hair from falling out, or make your nail polish last forever. You may feel like you have to compete with these claims to be successful, but you don’t.

New Jersey-based Pookie is a good example of this. Started by college chums, the company launched in 2001 with a line of seven scented, colored lip balms sold in silver quarter-ounce tins. (You can see how simple things were by checking out the archived version of their 2001 website.)

Once Pookie established a reputation for delivering quality lip balm, they added the option of buying it in an opaque tube with a top to match the scent and color. Then they added customized lip balm for showers and weddings. Later, they added body wash and lotion. The effectiveness of their simple, measured launch strategy is made clear on the page announcing the new products. It says:

“You’ve fallen in love with our Lip Balms and ColorBalms®. Pookie® is now pleased to bring you Pookamint™, a refreshing and invigorating combination of Spearmint, Vanilla and Peppermint oils that will refresh and nourish your skin!!”

Trying to be all things to all people will send you straight to bankruptcy court, an asylum or both! Keep it simple, establish your platform, and enjoy the process of measured growth that establishes your crediblity and sets up your business for long-term success.

3. Build your network (then participate in it).

One of the most important things you can do when trying to break into the beauty business is to build your network of industry contacts. Seek out events and opportunities to meet as many industry participants, particularly successful ones, as you can. Attend networking events, subscribe to and comment on blogs, tweet and retweet industry information of interest, and contribute original information to the discussion.

The first place that industry professionals look when they want to expand, take on a new project, share a new opportunity or collaborate on a new line is within their own network. For example, last week, Emily Caswell of Maine-based GCDSpa learned of an opportunity to create private-label products for a gourmet chocolate store and shared the opportunity at our large, beauty-industry-focused social networking site. In so doing, Emily made an opportunity easily and efficiently available to thousands of people at once.

You may wish to join the Indie Beauty Network as well, to collaborate with other industry participants and enjoy focused training, networking and resources.

If you are not a part of a few focused communities, you will not be able to connect efficiently with your peers, and you may miss out on opportunities like the one Emily shared so freely.  You’ll also want to connect with beauty bloggers. The best place to do that is at the Beauty Blogger’s Network. It’s great to find so many of them all in one place, making it easy for you to choose which bloggers would be the best ones to develop relationships with.

4. Remember that the media is you!

After 11+ years in business, I am absolutely persuaded that you are the best media outlet for your business. I teach these principles in The Media Is You Workshops online and nationwide. It’s great to be featured in the pages of the nation’s top women’s magazines, but nothing provides the depth, consistency and richness of experience needed to maintain a strong market position like branded magazines, books newsletter, podcasts, Twitter streams, Facebook pages, etc., that allow your customers to connect with you on their terms whenever they are ready to hear from you.

There are so many social media tools, and you must be careful not to use them just to use them. I’m not saying you should not experiment. You should; that’s how you learn. But time is money, and your experimentation should be to specific ends. Here are some examples to get your creative juices flowing.

Brambleberry a Bellingham, Washington, online retailer of soap-making ingredients, makes videos to show people how to make soaps using the ingredients she sells. Each video is posted at her YouTube page, tweeted, and added to FaceBook and her blog. Her community members often use the embed code to share her videos at their blogs.

Brambleberry has over 5,000 people at her FaceBook Page — all of them chatting it up about soap and looking to the company to provide guidance, encouragement and inspiration. Over the past few years, Brambleberry’s use of social media has allowed it to cut public relations and traditional advertising costs, making the business more profitable than ever.

Video is not the only way to skin the media production cat. Take Texas-based LA Minerals, for example. At first frustrated by Twitter, Lorraine stuck with it. Today, she says the key is “giving your followers a reason to click or retweet.” I couldn’t agree more. As Lorraine suggests, “mix personal, light-hearted stuff with information, news and links to your blog.” As Lorraine knows, it takes consistency and focus, and the ever-increasing amount of engagement she sparks at her Twitter page is proof.

Also consider Soapylove, the San Diego company that publishes an ezine of the same name. Created using the inexpensive Microsoft Publisher software program, the ezine includes soapmaking techniques and how-to articles, and features photographs taken by Debbie Chialtas, Soapylove’s founder.

You might also consider these innovative beauty companies: Joan Morais’s ebooks, and Elin Criswell’s newly released soapmaking book.

And since beauty products are more than soap and lotion, check out Virginia-based Charlene Sevier’s Flickr stream showcasing her beautiful handmade jewelry. Each of these business leaders has selected media that works best to accomplish their specific goals within their niche. You can do this too!

Just remember that there is no magic bullet. The idea is to publish information that is meaningful to people in your network, including your customers, industry colleagues and women in general. Create a system that gets results for you by repeating what works well and not repeating what doesn’t. Connect with industry friends (see the importance of a network, above) to discover what works best for others. Engage people who care about the same things you care about, and your efforts will pay off in increased visibility and more sales!

6. Leverage new opportunities.

Most beauty startups tend to manufacture products they use themselves, overlooking market opportunities in plain sight. For example, according to a recent article published by Euromonitor, a global market watchdog, the men’s grooming market is “relatively small and easy to break into.” While that article focuses on opportunities for multinational companies like Procter & Gamble, the same holds true for small and independent startups. Don’t limit your options by making only products you would use.

Another option is to add a unique spin on an existing type of product. For example, Berkeley, California-based Ganache For Lips takes the simple combination of ingredients in lip balm to a new level by adding gourmet Scharffen Berger unsweetened chocolate to the mix. All the other ingredients are commonly found in dozens of lip balms sold by thousands of companies every day. By adding one simple ingredient, the company is making a potentially mundane product more exciting — and is able to increase profit margins as a result. After all, you can charge more for a tube of lip balm containing chocolate than you can for one that does not — yet it takes the same basic amount of effort to make each product.

7. Keep up with regulations and trends.

Contrary to numerous erroneous reports by traditional media and bloggers across the Web, cosmetics manufacturers and products are regulated by federal law pursuant to the U.S. Food, Drug & Cosmetics Act, which is enforced by the U.S. Food & Drug Administration (FDA), and sometimes via state law as well. Use of the term “organic” on a beauty product labels is governed by the U.S. Department Of Agriculture’s National Organic Program.

(Check for any state laws as well. While there are very few of them, you should be proactive about finding out whether you live in a state that regulates cosmetics companies at the local level.) Read the regulations, understand them and make sure you follow them. Not only will this keep you out of trouble, but it will also build your credibility in the industry.

One way to keep up with regulatory and industry trends is to subscribe to industry trade publications, some of which are free. A few examples are Global Cosmetics Industry, Happi Magazine and Beauty Packaging Magazine.

These are easy and inexpensive ways to continually read up on new and coming trends, including things like eco-packaging and green ingredient and manufacturing options.

While product liability insurance is not required, it is a good idea to procure at least $1 million in coverage so you can operate your business knowing you can protect your assets if someone claims to have been damaged by one of your products.

Join the fun!

Like all other industries, the beauty industry is expanding at a rapid clip. It is advancing and changing very quickly, with new competitors, products, services, ingredients and services arriving on the scene each day. If 2011 is your year to take your beauty business to the next level, use these tips to join the fun in an industry that is full of opportunities for growth and success!

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