When starting a skincare beauty brand in Malaysia, it is crucial to get several things right from the start.
Also, it is equally crucial to avoid certain common traps and mistakes. The skincare sector is very competitive, and the average customer has come to expect a certain degree of quality.
Here are the most common errors to avoid when starting a skincare retail business.
1. Choosing the wrong OEM cosmetic manufacturer
Being new in the beauty industry means you might make the mistake of partnering with the first OEM cosmetic manufacturer you encounter.
Before deciding to engage with a cosmetic manufacturer, make sure you’ve spoken with as many as possible.
Compare their offerings and business aspects such as manufacturing cost, factory location, available equipment, terms and conditions, and more.
2. Lacking a well-defined target market
You know what they say… You’ll wind up satisfying no one if you strive to please everyone. This is especially true in the beauty industry.
It is advisable to have a defined target market and concentrate on their needs and desires. But first, you’ll need to figure out who they are.
Don’t make your target market overly broad, for example, trying to sell to all women between the ages of 18 and 65. It is preferable to target a more specific or niche market. For example, ‘face brightening cream’ for ‘teens or young adults’.
3. Offering far too many product discounts
The most damaging effect of discounting products is that you teach your customers to wait for a discount before making a purchase. You never want a customer to hesitate before making a purchase.
Discounts also reduce the value of your brand. Discounts tell customers that a beauty brand and its products aren’t worth what they cost at the store.
If the thought of discontinuing product discounts frightens you, consider adding limited-time value to orders instead. For example, spend x Ringgit to get free delivery (great for increasing your average order size).
Another example: you can purchase a full-size product for yourself and we’ll send a sample to a friend (this exposes your brand to new customers).
4. Beginning with a wide range of products
It’s easy to become overly excited because you are starting a new business. You might ask your OEM cosmetic manufacturer to produce a long line of products.
However, keep in mind that there are costs associated with each product you create in terms of equipment, materials, packaging, and labelling, which can significantly increase your start-up costs.
Furthermore, you’ll need to do testing on each product to improve the recipe, which might lengthen the time it takes to launch. It’s advisable to start with a modest range because it will be less expensive and take less time to set up.
You can always add to the product line as your business expands.
5. Lacking a marketing plan
People will immediately know you exist and where to locate the fantastic website you’ve developed once you open your natural skincare business, right?
That’s what most startups think! Unfortunately, potential buyers will not come to your brand simply because you have launched it.
Marketing is critical to success and is an area where many startups underinvest in both time and money.
Your marketing success will be determined in part by how strong your USP (unique selling point) is and how well you know your target market. That’s why you should have a well-defined target market.
If you’re on a tight budget, begin by trying a few different methods of marketing that match your existing talents and abilities. See what works best for you—this may require some trial and error—and then concentrate on the areas that deliver the highest return on investment.
If you have the budget, engage a digital marketing specialist who will be able to provide you with more bang for your ringgit.
6. Not pricing your products for profit
Another area where companies frequently go wrong is failing to price their products for profit from the start, and then wondering why they aren’t earning a profit even after a few years in business.
For instance, many entrepreneurs are concerned about charging too much for their private label cosmetic products.
However, because people associate higher costs with higher quality, if your prices are too low, they might have a negative impression of your product quality.
Another typical pricing blunder is deciding on a retail price without considering a wholesale price. Then, when they come across a wholesale deal, they realise it’s not worth it because they’d only make a small profit.
When setting your prices, consider expenditures such as insurance, labour, and product waste. Set wholesale prices from the beginning, even if you do not intend to wholesale immediately.
All in All
Don’t allow a few mistakes to hold you back. There will always be some hiccups with every new venture. Also, avoid having high expectations at the start, and give your new business time to flourish and find its stride.
If your early sales aren’t what you expected, get customer feedback, pay attention to what buyers are saying, and rethink your sales strategy. Remember to have fun during the entire process!