How Much Does It Cost to Start a Cosmetic Business [in 2024]

how much does it cost to start a cosmetic business illustration

If you wanna start a cosmetic business, the first question that comes to your mind might be:

“How much does it cost?”

To find out how much it costs to start a cosmetics business, you have to break it down into major expenses.

  1. Incor­po­ration Fees 
  2. Brand Develo­pment Costs
  3. Production Costs
  4. Website Costs
  5. Marketing Costs

Production costs are probably the largest expense among those, while it’s the hardest piece of infor­mation to obtain when new to the industry.

Many cosmetic manufac­turers keep their production prices a big mystery, but we don’t!

1. Incor­po­ration Fees ($300)

One of the first steps in launching a cosmetics business is choosing a business entity type.

This decision impacts your taxes, legal liabi­lities, and financial management.

incorporation fees for cosmetic business illustration

Incor­po­ration Fees in The USA

If you decide to incor­porate or form a limited liability company (LLC), you will need to file articles of incor­po­ration or organization with your state.

The filing fees vary widely from state to state, ranging from $50 to $725, though most states charge less than $300.

Incor­po­ration Fees in Europe

Incor­po­ration fees vary signi­fi­cantly by country. While the average cost is similar to that in the USA, around $300, some countries, like Germany or the UK, allow you to start a business for as little as $1.

2. Brand Develo­pment Costs ($1500)

In our opinion, this is the most under­rated cost factor when thinking about starting a cosmetic brand.

brand development for cosmetic business illustration

Especially in a market, where it’s all about beauty and aesthetics, investing in profes­sional brand develo­pment rather than relying on DIY logo generators and similar tools is absolutely essential for several reasons.

Why You Should Invest in Brand Develo­pment

A profes­sio­nally crafted brand helps to establish a unique identity that distin­gu­ishes your cosmetic brand from its compe­titors. Your brand is the only way to stand out and build trust in a crowded market.

Profes­sionals bring expertise in market research, consumer psychology, and design principles that are typically beyond the scope of basic logo creation tools.

This results in a cohesive brand identity that resonates more effec­tively with your target audience.

While upfront costs may be higher, the long-term benefits of a strong, profes­sio­nally developed brand can signi­fi­cantly outweigh initial savings achieved through self-made, often generic branding elements.

Our Brand Develo­pment Service starts at just €1490, while our most advanced service costs around €3000.

It includes every­thing, from your brand core (vision, mission, purpose), market research, compe­titor analysis, a logo suite, branded colours, typeface pairings, brand pattern, brand perso­nality, social media templates, packaging design and much more.

3. Production Costs ($2500)

Production costs is where you probably struggle the most to get a realistic estimate for your first order.

But don’t worry!

We, as a cosmetic manufac­turer, can give you a pretty good ballpark for the production cost of different cosmetic products.

production cost for cosmetic business illustration

First, you have to choose the production method.

There are basically three options: Pre-manufac­tured products, pre-formu­lated products and a develo­pment of new products.

Pre-Manufac­tured Cosmetic Products ($149 + $26/Month)

There are some private label cosmetic suppliers, like Blanka, where you’ll find on-stock cosmetic products starting from just 1 unit.

There’s basically no investment in production needed. They literally drop-ship products labelled with your logo.

Major downsides are the lack of custo­mization and really high unit prices.

Pre-Formu­lated Cosmetic Products ($2500)

Then you have cosmetic manufac­turers like us:

We offer pre-formu­lated but not pre-produced products. This is just another type of private label cosmetics.

There is a minimum order quantity of around 1000 units (depending on the product category), but the price per unit is much cheaper.

It also allows you to change and customize the packaging to make it truly unique.

1Lipstick1000$2.00 — $3.50> $2.000
2Nail Polish1000$1.50 — $3.00> $1.500
3Mascara3000$2.50 — $4.00> $7.500
4Moistu­rizer1000$5.50 — $8.00> $5.500
5Powder1000$3.00 — $4.50> $3.000
6Face Brushes3000$1.50 — $3.00> $4.500
7Eyeliner / Lipliner1000$1.50 — $2.50> $1.500
8Foundation1000$4.00 — $5.50> $4.000
9Lipgloss1000$2.00 — $3.50> $2.000
10Shampoo1000$5.00 — $7.00> $5.000

Custom Formu­la­tions ($5000)

The third option is to develop a custom formu­lation.

This takes a few months and costs about $500-$5000 extra (depending on the formula).

The minimum order quantity and unit price is similar to the second option.

4. Website Costs ($40 a Month)

Starting your own cosmetic business can indeed be profi­table, whether it is a skin care or makeup line.

website costs for cosmetic business illustration

But the speed at which profi­ta­bility is achieved can be somewhat uncertain. As a small-scale start-up, the likelihood of placing your products in major retailer, like Sephora or Ulta, or even mid-sized local stores is slim when you start out.

Start an Online Shop Before Going Into Retail

A practical approach is to launch online, which allows you to gather sales data and attract initial customers. This data proves invaluable when approa­ching local markets to persuade them to stock your products.

The broader the public’s awareness of your product, the greater your chances of success.

If you’re somewhat familiar with technology, we’d recommend setting up a Shopify store by yourself. It’s very straight­forward, even with no coding experience.

You can basically build your own fully functional online store in just one day.

It costs around $36 a month.

Other Shopify alter­na­tives, like Wix, Square­space or Weebly, costs pretty much the same:

  • Wix: $13 to $39 per month for a premium plan.
  • Square­space: $12 to $18 per month billed annually, or $26 billed month to month.
  • Weebly: $5 to $25 per month.

5. Marketing Costs ($2000)

Your marketing budget is a highly individual choice. We’ve seen anything working, from zero to hundred of thousands of dollars.

Marketing Costs for cosmetic business illustration

Brands With $0 Marketing Budget

On the one hand, we have plenty of successful customers who basically started without any marketing budget at all.

Some have had plenty of followers on Instagram, others gone viral with one of their TikToks or were trending on Amazon without any marketing spent.

Brands that Invest in Paid Ads

On the other hand, there are brands that invested hundred of thousands into building a strong brand and wouldn’t have been successful without it.

They invest in all kinds of brand building efforts and buy paid ads across different platforms like Google, Social Media and TV.

We’d Recommend a Mix of Both

You should do every­thing possible to grow organi­cally (post daily on all social media channels, do search engine optimization, try to trend on Amazon, and so on).

But at the same time, plan a realistic budget for marketing that increases the chances of your success — even if this is just a backup if organic alone does not work out for you.

Total Costs of Starting a Cosmetic Business ($9000)

As we’ve discussed, the costs for starting a cosmetic business varies on many factors, but here’s a simplified calcu­lation:

  1. Incor­po­ration Fee: $300
  2. Brand Develo­pment: $1,500
  3. Production Cost: $5,000
  4. Website Cost (1 Year): $480
  5. Marketing Budget: $2,000

In total we are looking at a minimum required budget of around $9,000 — $10,000.

Get started now

Request your desired cosmetic products in just a few minutes and we will help you in the best possible way.

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