Starting a cosmetics business gives you the opportunity to create products that people connect with on a personal level. The market is highly lucrative: the global cosmetics market was valued at $335.95 billion in 2024 and is projected to reach $556.21 billion in value by 2032.

Whether you’re focused on a bold make-up brand or an eco-friendly skin care line, launching a cosmetics business requires creativity and strategy. From perfecting your formulations to following product safety guidelines, every step matters. Below, we’ll explain what it takes to turn your idea into a cosmetics business, including different product categories in the industry, legal requirements, and how to source your materials and manufacturers.

What’s in this article?

• Why start a cosmetics business?
  
• What types of products can you sell in a cosmetics business?
  
• What are the legal steps to start a cosmetics business?
  
• How do you source materials or manufacturers?
  

Why start a cosmetics business?

If you’re passionate about beauty and personal care, starting your own cosmetics business can be an exciting, rewarding venture. Here are some reasons why it’s an attractive industry.

A personalised product market

Cosmetics allow you to create products that reflect your vision and values. Whether you’re passionate about clean beauty, inclusivity, or groundbreaking formulations, there’s an opportunity to craft unique products. For example, customers increasingly want products that reflect their identities or values. A 2023 Edelman report found that customers are five times more likely to purchase a product from a brand that commits to addressing climate change and are four times more likely to buy from brands that promote gender equality.

Even niche-focused brands can carve out a loyal customer base. Consider the success of Fenty Beauty, which generated $602.40 million in sales in 2023. In addition to being Rihanna’s brand, it also addresses a real gap in inclusivity with a foundation range that comes in dozens of shades.

Lower barriers to entry

Compared to other industries, starting a cosmetics line doesn’t necessarily require a large upfront investment. Thanks to private-label manufacturing, small-batch production, and direct-to-consumer e-commerce platforms, you can start lean, with a small product line-up. A single, well-made hero product, such as Glossier’s Balm Dotcom or Drunk Elephant’s C-Firma Fresh Day Serum, can establish your brand.

High demand with room to improve

The cosmetics industry reinvents itself constantly, which gives you the chance to improve, perhaps by creating a multi-use product, introducing more sustainable packaging, or developing formulations for underserved markets. Customers actively seek out and reward brands that improve meaningfully, with 76% of customers saying they disengage from brands that lack relevance.

Opportunities to directly interact with customers

The beauty industry flourishes through relationships and storytelling, and TikTok and Instagram can be important places for beauty entrepreneurs to connect with their audiences. Tutorials, behind-the-scenes content, and reviews all tie customers to your brand. If you can forge connections, you can go beyond selling a product and genuinely build a community.

Repeat purchase potential

Unlike industries where customers make purchases sporadically, cosmetics often generate repeat purchases, resulting in a steady revenue stream. When people run out of foundation, lip balm, or moisturiser, they’ll probably buy more. Plus, if customers love one of your products, they are more likely to explore your other offerings, driving long-term loyalty.

A resilient, expansive market

The cosmetics industry is resilient, even in tough economic times. This is often referred to as the “Lipstick Index”, an economic theory that suggests people still buy small luxury items, such as lipstick, even when they’re cutting back elsewhere. According to a 2023 survey, 90% of shoppers said they will never stop purchasing hair care products while 77% said they’ll keep buying their skin care staples, regardless of the economic outlook.

Potential for personal and brand legacy

If you want to make an impact, the beauty industry offers a unique chance to leave a legacy. A well-positioned brand can shift cultural conversations, such as by pushing for more expansive beauty standards and by normalising self-care.

What types of products can you sell in a cosmetics business?

Cosmetics businesses sell a wide range of products, and you can design your product line-up to fit your vision. Here’s a survey of the kinds of products you can sell and why they’re worth considering.

Make-up

Many people think of this category first. It includes everything from foundation and concealer to eye shadow, eyeliner, mascara, blush, and lip products. To be successful, you need to define your unique angle. Perhaps you are creating make-up that’s highly pigmented and bold, just like Pat McGrath Labs. Or maybe your focus is more in line with that of Saie, which offers natural, lightweight products for everyday wear. You could also choose to specialise in multi-use products such as cheek-and-lip tints, which appeal to customers who want to keep their routines simple.

Skin care

Skin care includes cleansers, toners, serums, moisturisers, sunscreens, masks, and exfoliators. There are major opportunities to address specific needs such as acne, anti-ageing treatment, and hydration. If you can support your products with scientific backing or effective ingredients, you’ll gain an advantage. Skin care also builds customer loyalty. Once people discover a routine that works, they tend to remain loyal.

Hair care

Hair care includes basic shampoo and conditioner as well as styling creams, leave-in treatments, heat protectants, scalp scrubs, and hair oils. There are opportunities to create products that cater to specific hair types or concerns, such as curly hair care and scalp health. A 2024 Mintel report found that the “skinification” of hair care – where customers look for skin care ingredients in their hair treatments – continues to increase in popularity. This shows that hair care is a space where people are willing to invest if they believe they’ll see results.

Body care

Body care is more than just lotion. It includes scrubs, oils, body butters, soaps, and treatments such as anti-cellulite creams and ingrowing hair serums. Customers see the appeal in products that combine skin care principles with body care, such as body washes with active ingredients (e.g. AHAs, BHAs) that exfoliate or brighten the skin.

Clean or sustainable beauty

This isn’t a product category but rather a way to position your brand. For example, you could create make-up, skin care, or body care products made with clean, non-toxic ingredients or packaged in an eco-friendly way with refillable containers or compostable materials. Although this requires a bit more effort, it’s a selling point that resonates.

Men’s grooming

Beyond shaving creams and beard oils, there’s a growing demand for men-specific skin care, hair care, and more. The trick is to package and market these products in a way that appeals to men without feeling patronising.

Wellness-adjacent beauty

This is where beauty meets self-care and wellness. Aromatherapy products, such as essential oils and mists or bath products, fall into this category. You could also explore supplements, such as collagen powders, skin-boosting vitamins, and hair growth gummies. This category markets to people who treat beauty as part of a broader lifestyle.

Niche or speciality products

These are products that target a very specific need or audience. Here are some examples:

• Sensitive skin: Hypoallergenic or dermatologist-tested formulations

• Inclusive shades: Foundations and concealers with extensive colour ranges

• Travel-friendly products: Mini sizes or multi-use items for on-the-go customers

• Dermaceuticals: Beauty products that blur the line with medical-grade skin care

Tools and accessories

This category is often overlooked but can be highly profitable. It includes make-up brushes, beauty sponges, jade rollers, and tech-driven devices such as LED masks and microcurrent tools. Accessories are a great way to complement your main product line and increase your average order value.

Fragrance

To succeed in the fragrance category, you need to tell a story. Scents that feel personal or evoke a feeling tend to resonate with customers. You could sell traditional perfumes or explore newer trends such as layering scents, solid perfumes, and scented body sprays and oils.

What are the legal steps to start a cosmetics business?

The cosmetics industry is highly regulated, so you need to ensure your marketing, ingredients, and packaging all comply with the law. Here are some of the legal considerations for starting a cosmetics business.

Formulate your product legally

Because you’re creating something that people apply to their skin, safety is a priority. Start by working with a licensed cosmetic chemist or a certified lab. They will know the exact concentration limits for regulated ingredients (e.g. salicylic acid, retinol) so your formulations meet safety standards. Other factors include the following:

• Ingredient lists: Every ingredient should be listed in descending order by weight to minimise legal risk. Common cosmetic allergens should also be listed.

• Prohibited ingredients: In the US, the Food and Drug Administration (FDA) bans specific substances, such as certain colourants and mercury. The EU’s list is even stricter. If you plan to sell internationally, you’ll need to formulate your product with the rules of multiple regions in mind.

Understand the claims you can make

Cosmetic businesses must be careful about the language they use. According to FDA regulations, for example, the line between a cosmetic product and a drug is razor-thin. You can say your product “moisturises” or “smooths”, but you can’t claim it “treats acne” or “reduces eczema” unless the FDA approves it as a drug. This applies to all marketing channels, including your website, ads, product packaging, and even influencer collaborations.

Avoid buzzwords such as “clinically proven” unless you’ve conducted a legitimate clinical trial. Government agencies monitor misleading claims and can crack down on false advertising.

Conduct safety testing

Before you sell anything, your product must be proven to be safe. You’ll need to test for the following:

• Stability: Does your product stay effective and safe throughout its shelf life?

• Microbial testing: These tests assure that your product doesn’t contain harmful bacteria or yeast.

• Patch testing: While it’s not always legally required, testing your product for irritation on volunteers (or synthetic skin) is highly recommended to minimise liability.

Work with a third-party lab to conduct these tests; it’s worth the investment to avoid potential lawsuits or recalls.

Know the importance of labelling

Cosmetics labelling must meet very specific rules. Ensure your packaging includes the following:

• Product name: Clarify what the item is (e.g. “Moisturising Face Cream”).

• Net contents: List the contents in both metric (grams or millilitres) and US customary units (ounces).

• Ingredient list: Use the International Nomenclature of Cosmetic Ingredients (INCI) names for your list. Common names such as “aloe vera” might be inadequate in certain regions.

• Manufacturer or distributor info: Include your company’s name and an address where you can be contacted.

• Warnings: If your product has usage risks (e.g. you have to wear sunscreen when you use retinol), include clear warnings on the label.

Protect your intellectual property

Branding is central to the beauty industry, so protecting your intellectual property is an important consideration. Take these steps:

• Trademark your brand: Trademark your logo, brand name, and product names to prevent copycats. There’s a risk that your successful indie brand could get imitated as it gains traction.

• Secure your formulation: If you’re working with a manufacturer or chemist, use non-disclosure agreements and ensure you own the formula outright unless you’re white-labelling.

Comply with local regulations

Some local governments have stricter cosmetic laws so it’s important to check that you’re adhering to these regulations. In the US, for example, there are different state-level requirements, such as the following:

• California’s Proposition 65: This regulation requires you to disclose whether your product contains any chemicals known to cause cancer or reproductive harm.

• State manufacturing laws: If you’re making products in your home, some states might require a permit while others forbid manufacturing from a residence.

Use Good Manufacturing Practices (GMP)

Even if you’re outsourcing production, you’re responsible for ensuring that your manufacturer follows GMP, which stipulates that:

• Facilities are clean and hygienic

• Products should be properly stored to avoid contamination

• Batch records should be kept to track production and address issues if they arise

Ask your manufacturer for documentation that proves it meets GMP standards. If you’re producing in-house, familiarise yourself with GMP guidelines.

Obtain insurance specific to cosmetics

Because cosmetics have the potential to cause allergic reactions or contamination, product liability insurance is important. Choose a policy that specifically covers:

• Adverse reactions

• Allergic responses

• Manufacturing defects

Comply with international market requirements

If you plan to sell globally, be aware that each market has its own requirements:

• The EU requires that a responsible person for cosmetics handle compliance in the region. Products must undergo safety assessments and be registered in the cosmetic products notification portal.

• In Canada, you must notify Health Canada of all cosmetic products.

• Many countries, including China, require animal testing unless you’re selling through cross-border e-commerce.

How do you source materials or manufacturers?

The right materials and manufacturers can make the difference in whether your company succeeds or fails. Here are some important steps for sourcing the components and suppliers you’ll use to build your products.

Define your product

Before you start searching, be clear about what you’re making and what matters most to you. Are you prioritising certain active ingredients? Do you need vegan or cruelty-free certifications? Do you want to deliver luxurious textures or eco-friendly packaging? Knowing what’s non-negotiable will help you choose suppliers and manufacturers that fit your brand.

Choose a sourcing strategy

How you source for your products depends on how much control you want. Here are some options:

• Private label: With a private label, you’re choosing pre-made formulas from a manufacturer and adding your branding. This method is faster and cheaper but limits your customisation options. It can be effective for testing the market or launching simple products such as lip balms and basic serums.

• Custom formulation: This approach involves collaborating with a cosmetic chemist or laboratory to develop a product from scratch. It grants you complete control over the formula, but it requires more time and financial investment. It can be a good option for niche or innovative products.

• In-house manufacturing: If you plan to make the products yourself, you’ll need to directly source raw materials from ingredient suppliers and invest in equipment. This requires extensive formulation knowledge and compliance with GMP.

Find reliable suppliers

The ingredients you choose can make or break your product, so it’s important to find reputable suppliers.

• Start with directories: Use platforms such as UL Prospector, Spec-Chem Industry, and MakingCosmetics to find reputable suppliers for raw materials.

• Go global, but vet thoroughly: Many high-quality cosmetic ingredients come from specific regions (e.g. shea butter from West Africa). Although sourcing internationally can save money, ensure the supplier meets international standards for safety and quality.

• Ask for documentation: Always request Material Safety Data Sheets (MSDS), certificates of analysis (COA), and allergen statements for your ingredients. If sustainability or ethical sourcing is part of your brand, ask about certifications such as Fair Trade, COSMOS Organic, and RSPO (for palm-derived ingredients). These documents prove your ingredients’ purity, safety, and compliance.

Source packaging materials

Packaging affects functionality, shelf life, and sustainability. Start by identifying the type of packaging you need (e.g. glass jars, airless pumps, biodegradable tubes) and look for suppliers that specialise in cosmetic-grade materials. Sites such as Packaging of the World and Berlin Packaging offer a range of options, and you can order samples to test durability, compatibility with your formula, and the overall look and feel. If eco-friendly packaging is important to your brand, look into refillable systems or biodegradable materials.

Research and vet manufacturers

Your relationship with your manufacturer is just as meaningful as the product it produces. You want a vendor that can be a true partner. Here’s how to find the right fit:

• To get started, platforms such as Thomasnet, Alibaba, and Made-in-China.com can connect you with manufacturers. Attend trade shows such as Cosmo Prof and In-Cosmetics Global to meet manufacturers in person.

• Ask to see examples of products manufacturers have made, especially if they’ve worked on similar formulations.

• If possible, visit the company’s factory. This will give you a sense of their manufacturing and cleanliness standards and overall professionalism.

Ask the right questions

As you narrow down manufacturers or suppliers, don’t focus only on pricing. Dig deeper by asking these questions:

• What certifications does the manufacturer hold? Look for GMP, ISO 22716, or FDA registration.

• Can it handle small batches? If you’re starting small, find out its minimum order quantities.

• Does it offer research and development (R&D) services? If you’re using custom formulations, you’ll need a manufacturer with a strong R&D team.

• What’s its lead time? Understand how long it will take to manufacture and deliver your products.

• What’s included in its pricing? Ask about formulation fees, testing costs, and packaging compatibility testing.

Test compatibility early

A worst-case scenario is finding out your formula reacts poorly with your packaging (e.g. the product breaks down in plastic containers or leaks from pumps). To avoid this:

• Send your formula to the packaging supplier for compatibility testing

• Conduct accelerated stability tests to see how the product performs over time in its packaging under different conditions (e.g. heat, humidity)

Establish long-term relationships

Once you’ve chosen your suppliers and manufacturers, build strong relationships with them based on consistent communication and mutual respect. These relationships will be particularly valuable when you scale and need faster turnaround times or want to negotiate for better pricing.

Negotiate without compromising quality

Your manufacturing costs matter, but they’re not everything. Cheaper suppliers often cut corners, which can lead to product recalls or bad customer experiences. Instead of choosing the lowest bidder, negotiate bulk discounts, payment terms, or reduced fees for repeat business.