Ready to learn how to start your own successful Australian skin care business?
Whether you choose to make your own skin care for personal use, to create a unique range of gifts for family and friends, or you are ready to begin your own Australian beauty and skin care business, these tips for creating quality, long lasting and effective products are for you!
What is your niche? What do you love? What are the special needs of your skin? What would thrill your family and friends? If selling your products, what will make them stand out from your competitors? Do not simply copy another product from another business - develop your own and use the uniqueness as a selling point.
You may already have the answers to these questions but, if not, use your fingertips to help define your vision for your skincare - search the internet for ideas!
The possibilities are endless – will you create a mother and baby range, mens skin care, teenage skin products? Will you use Australian native ingredients, botanicals, essential oils? Will you focus on natural or organic skincare or more on the treatments your products provide? Will you move into the exclusive market or more cost effective products?
Chances are, if you are ready to begin creating your own skincare, you already love something about the industry, so call on your strengths to create your special niche.
The Department of Health and Aging (NICNAS) has introduced a Cosmetics Standard, and the NICNAS Cosmetic Guidelines to help those manufacturing cosmetics. NICNAS assesses the ingredients used in the manufacture and importation of cosmetics to ensure their safety and also regulates the types of products that are classed as cosmetics.
In many circumstances, such as when importing ingredients, or using synthetic preservatives or essential oils in your products, you will also need register your business with NICNAS.
Read the NICNAS guidlelines and Standard to ensure your chosen ingredients, product types and advertising wording meet the Standard, prior to releasing your products into the marketplace. These guidelines are easy to understand, and very easy to abide by.
Consider your niche when choosing products – it will help to keep costs down and also stop impulse buys. If you are focusing on mature skin, for example, choose butter and cream type bases rather than lotions as they will suit your product requirements. If you are making skin care for mothers and babies, check the safety precautions of the items you’re considering to ensure their appropriateness for new babies or pregnancy.
Sites such as New Directions Australia and Sydney Essential Oil Company will describe the qualities of raw materials, the types of products the ingredient is used in, and the percentage to be added to your base product. If you can’t find the information you need, email them with a question – they are happy to help prospective customers – or, do your own research on the internet.
You can also find an exhaustive list of ingredients including essential oils, hydrosols, extracts, raw materials, exfoliants, preservatives and more used by Hippy Heaven Natural Beauty along with a description of the qualities of the product and it uses.
As a general rule, when adding additional raw materials to your base product, whether you have prepared it yourself or purchased it ready made, a guide for concentrations is –
Essential oils total
Eye area - 0.25% (5 drops per 100ml)
Face - 0.25 – 1% (5 to 20 drops per 100ml)
Body – 1-2% (20 to 40 drops per 100ml)
Feet – 2% (40 drops per 100ml)
Other oils total (such as rosehip, evening primrose etc)
Extracts total (calendula, cucumber etc extracted into glycerin)
1-6% per 100ml (1-6 ml)
Hydrosol total (floral waters)
Exfoliants total (walnut shell, jojoba beads etc)
1-5% for face of fine ground exfoliant
5-10% for body of mid to course ground exfoliant
This will entirely depend on the purpose of your product. Small amounts (up to 3%) can be added to creams or cleansers to detoxify skin, or even to add colour to your product, and larger amounts will cause the product to thicken when applied, so better used for body wraps and facial masks which will be washed off when dried.
Adding essential oils to your base product will not affect the life span of your creation. In fact, some essential oils act as an additional preservative! Should you choose to use Hippy Heaven's bases and add other raw ingredients (such as extracts or exfoliants), your products will generally last at least six to twelve months from when they are combined.
Additional preservation is not necessary for personal use, but should you choose to sell your products, preservatives such as rosemary leaf extract, tea tree or vanilla essential oil, vitamin E, or your choice of synthetic preservative will help lengthen the life of your products up to two years, giving your customers longer to enjoy them!
The list of additives for you to choose from is almost endless, so research those ingredients you believe will bring your users the most benefit, while being within your price range. If you are having trouble choosing additives, search for other skin care or beauty created in the area you’re interested in, and see what they have chosen to use and how they have combined essential oils, extracts, powders, clays etc to create a specialised item.
While research is essential, ensure you do not actually copy another recipe or create a replica of an item for sale – all websites and retailers have copyright over their own products, so use your research to develop your own ideas and obtain your own loyal customers!
DEVELOPING YOUR PRODUCTS FOR SALE
Where do you find your ingredients?
We offer a number of vegan, cruelty free natural skin care base products and raw ingredients, including a start up kit with professional packaging for your creations to get you started, but there are many other quality suppliers of skincare ingredients, bases, raw materials and packaging in Australia for you to choose from.
New Directions – huge range of raw materials, bases, pre-formulated skincare for you to simply bottle and sell or give as gifts, packaging (glass, PET and plastic jars, bottles), mineral make-up, essential oils and much much more! No minimum order
Sydney Essential Oil Company – similar range of products to New Directions, its just personal choice as to which range you prefer – although this company does not stock packaging. $220 minimum order.
Aussie Soap Supplies – although selling a smaller range of products than New Directions or Sydney Essential Oil, this company does offer some unique and interesting items, and some packaging. $44 minimum order.
This is by no means an exhaustive list, but provides a good overview of what is available in Australia.
Where do you find your packaging?
Ant Packaging – A small, privately owned cosmetic packaging manufacturer which sells a range of plastic and PET bottles and jars at very reasonable prices. They do usually require you purchase items by the carton, which is approximately 300 x 100ml jars, for example, but the price per item makes this a very cost effective way to purchase!
Escentials of Australia – Sell a range of packaging in either small, or bulk amounts, and offer some raw ingredients and pre-made products. No minimum order, but a processing fee applies to orders under $60 in total.
And, as above, New Directions sells a wide range of packaging with no minimum amount – you can buy just one jar to see if you like it!
Again, by no means an exhaustive list, but a place to start on your packaging journey!
Where do you find your labels?
There are vast number of options regarding labels. Do you need them to be waterproof? If so, vinyl will suit. Biodegradable? Paper is the way to go. Its up to you, your budget and your design ideas. There are many labeling companies on the internet offering design services and different print mediums, so search for your favourite and ask for a quote – and find out if they have minimum order requirements.
When first starting out, though, you may want to consider creating your own labels. You can purchase adhesive paper or vinyl labels in stationery stores or newsagents and, if you have the skill, design your own label and print it.
For those of you needing a little design assistance, consider purchasing the “Avery” brand labels. They have a website which allows you to choose your label size and type, and then scroll through a selection of templates which can be edited with your wording and printed on your own printer – all for only the cost of the labels! This is most certainly a cost effective option, and also a lot of fun!
Vistaprint also offers a huge selection of highly customizable “return address labels” which can be chosen, edited and ordered online. While these labels are small and come in paper only, they are also very cost effective when starting out. Recently, VistaPrint has also added a range of "Product Labels" to their business section, which come in a huge variety of designs, and are available in small or large rectangles, ovals and circles - for that more professional finish to your products.
You may also find something suitable on eBay – a number of sellers offer a customised label creation service and will either email you a file for you to print out, or you can choose to have labels posted to you.
LABELING YOUR PRODUCTS
All products sold in Australia must comply with the Competition and Consumer Act 2010 (previously known as the Trade Practices Act 1974) in terms of providing a fair trading experience to consumers. An overview of the TPA can be found on the Australian Competition and Consumer Commission website and covers areas including fair pricing, consumer protection and more. These rules are straightforward and deal in common sense and fairness, but it's best to be familiar with them.
The ACCC has developed Standards in relation to this Act in areas of product safety, liability and more. In a nutshell, these state that you must provide a product which is of a quality consumers can reasonably expect and which performs in a way consumers can reasonably expect.
So, before releasing your products into the market, test them for reliability. While laboratory testing is generally out of reach for those starting out, you can certainly test products yourself.
Start by providing samples to friends and family who suit your target market. Ask their opinion of the product – is it smooth? does it absorb into the skin well? Have positive effects on the skin? improve the appearance/feel of the skin? In short, does the product do what it is you claim it will do?
Secondly, test the lifespan and hardiness of your product. Take a sample and place it in a hot area – a windowsill, the dash of your car, and check the sample after two weeks. Do the same in a humid area, such as your bathroom, and in your fridge. Does your sample still look as it did? Has it separated? Thickened? Changed in colour or scent? If so, you will need to change your formulation somehow, perhaps by reducing the amount of additives, or increasing the emulsifiers or thickeners in your product. All the raw ingredients to change your formulation can be purchased from New Directions or Sydney Essential Oil Company.
Check for mould preservation by leaving the lid off a sample and storing it in the bathroom for at least two weeks. Being exposed to humidity is the perfect test for mould. To test for bacteria, touch a piece of chicken, or your garden mulch, for example, and place your hand in a sample of product. If two weeks passes and your sample hasn’t changed in appearance or scent, you can be sure a customers unwashed hands wont spoil their product.
If you find mould or bacteria growth in your sample, increase the preservation of your product by small increments until you have the perfect formulation. Many preservatives, both natural and synthetic, can be purchased separately from New Directions or Sydney Essential Oils.
If you conduct internet research on skin care preservation, or carefully read the information provided on each product listed for sale you locate, you will find details on which preservative to use in what circumstances, and how much is required.
ABN AND BUSINESS NAME
The Therapeutic Goods Association has produced a set of Cosmetic Claims Guidelines - guidelines for labeling and advertising of cosmetics and toiletries in Australia. While these Guidelines have now been superseded by the NICNAS Standard, the TGA Cosmetic Claims Guildelines provide a chart listing types of cosmetics, acceptable claims which can be made about those cosmetics and unacceptable claims which cannot be used. This is an invaluable resource to assist with advertising wording compliance.
In essence, these guidelines, and more recently the NICNAS standard and Guidelines, make sure cosmetics do not claim to actually medically or therapeutically change the skin itself, just improve the appearance of it - for example, it would not be appropriate to state your product "removes wrinkles", but you could advertise that it "improves the appearance of mature skin".
Additionally, the ACCC has a mandatory Standard regarding the ingredient, mass and safety information you must include on the labeling of your product, or on an information card sold with it. You can view the Standard at Product Safety Australia.
As on overview, these rules relate to the following -
All ingredients, from highest to lowest percentage must be listed in either English or INCI format (or both, if you prefer). INCI is the International Nomenclature of Cosmetic Ingredients list, developed by the Personal Care Products Council. A full list of cosmetic ingredients and their appropriate INCI names can be purchased from the council here, but, when starting out, a very comprehensive list of INCI names can be accessed for free at Making Cosmetics. You must also state the weight or volume of your product accurately.
Also, while not part of the Safety Standard, industry best practice also dictates the following be provided on the product label - and it is clearly in the consumers (and your own) best interests to do so.
How does the customer apply the product? How much do they use? Where do they apply it? An example may be – “Apply a small amount to the face using the fingertips or a cotton cloth, avoiding eye area”.
Is this product safe for pregnant women? Is there a possibility it may cause skin irritation? Can it be used around the eye area? A general cover-all precaution may be “A skin patch test is advised. Please discontinue use if irritation develops”. Or, if you have used a photosensitive essential oil in your formulation, you may write “Sensitivity to sunlight may occur. Do not expose skin to sunlight for 8 hours after application”, for example. To effectively meet this guideline, you will need to fully research any possible risks associated with your chosen ingredients, and ensure an appropriate precaution is added to your label/card.
You should include your business name, website, contact address and a contact phone number. This is to ensure that consumers who purchase your product have a way of contacting you should they have questions or concerns re the product.
Best Before Date and Batch Number
If you are creating very small batches of products when starting out, or creating each item individually as its ordered, consider making a separate small label for this information as it will change very frequently, whereas your ingredients, precautions, usage and contact information will remain the same.
The batch number is something which you should record against each order you receive, so if a customer is unhappy with their order for any reason, you can look back and see which other customers also received products from that batch.
The best before date can be surmised from the best before date on your base product. Once all your testing is complete, and your products hold their texture, scent and appearance well, simply shorten the lifespan of your product, in comparison to the base product it was created from, by six months or a year, depending on the percentage and type of raw ingredient added - a distilled floral water, for example, is in itself a purified liquid, and will not shorten the life span to such an extent as will walnut shell exfoliant grains, an unpurified natural coarse powder.
Initially, it is wise to have a best before date of not more than 12 months from the date you manufacture the item to ensure you offer the best quality product to your customers. As your business grows, you can approach laboratories to conduct small scale testing on your finished products for specific best before dates for each item.
TRADEMARKS, INSURANCES AND LICENCES
While you will be looking forward to creating and experimenting with products, packaging and labeling, this will take up a lot of your time and energy, so, before making your products available for sale, ensure your legal requirements are sorted first! Take the time now to carefully peruse the information and links below and your business will run smoothly from the start.
Also, most essentially, discuss all business plans and ideas with a solicitor, accountant or business advisor. While it may seem like an extravagant expense, this is money very wisely spent as advice from reliable sources can save costly errors.
Decide on your business structure
While most people will begin as a sole trader as it’s the easiest business to set up, and certainly the least expensive, some people may choose a partnership or even a company. Information on which business structure may suit you, and the legal requirements of it, can be found at AusBusiness Review.
Obtain an Australian Business Number
All businesses require an ABN, and companies require an ACN. The ABN allows you to communicate with the tax office and is required on all invoices. You can register for an ABN via the internet by visiting the Australian Business Register.
If you already have a large base of prospective customers or wholesalers, consider registering for GST. If your annual turnover (not profit) is $75000 pa or more, you need to be registered. To find out more, or register, visit the Australian Business Register and choose from the left hand menu.
Choose a business and domain (website) name and check for availability
Unless you are a sole trader, choosing to conduct business only under your own name (i.e. – Jane Smith), you must register a business name.
Because you will be utilising the internet, via your website, for your sales, consider this carefully when choosing a name. Your name needs to express what it is you offer (your niche) but also will benefit by having popular internet search terms included, such as skincare, beauty, facial, spa, natural, Australian etc.
It is best to have several possible names and variations of these ready, as you will need to choose up to three variations for your business name registration, and you need to have BOTH the business name and domain name available to be registered.
Check for availability of your chosen business name at the National Names Index at the Australian Securities and Investments Commission.
Apply for your business name at the Department of Fair Trading in your state.
A state by state guide can be found at the registration and licences section of business.gov.au, along with a wealth of information on starting your own small business.
Check for availability of domain names at any domain name provider, such as www.netregistry.com.au
You can also use the domain supplier of your choice to purchase domain names, or ask your website designer to do this for you. It is always wise to purchase all the widely used Australian variations of your business/domain name, including .com.au, .com, .net.au and .net.
If you own all these domain names, each one of them can be pointed towards your main site, giving you more opportunities for marketing and linking.
SETUP AND MARKETING OF YOUR WEBSITE
Trademark your name
Holding a business name does not provide you with legal protection from someone else registering a trademark using that name. This means all your hard work, advertising, marketing, signage and websites could be wasted!
Check for availability of your chosen trademark at the National Names Index at www.ipaustralia.gov.au and apply for a trademark here also.
You will be creating products for people to use on their skin. While all due care will of course be taken, some people may have adverse reactions to ingredients you choose to use. To ensure you are financially protected from any complaints, take out product liability insurance to cover all the products you create. Hippy Heaven chooses to use EBM insurance for their cover.
You will need to know the ingredients you will be using to formulate your products when applying for this insurance, so once you have developed, tested and decided on your start up product range, apply for your insurance prior to advertising them for sale.
Should you also choose to sell your products via your own retail outlet, or by party planning or at markets, consider also public liability insurance, which covers you for any injury people may suffer when in your store/attending your party/perusing your stall. EBM provides this cover as an all inclusive package, and AAMI also sells a limited cover for those selling only at market stalls.
Contact EBM Insurance
Prepare storage for financial records
You must legally retain all financial documents in hardcopy or electronic format for specified times. Should you be inexperienced in bookkeeping, consider contracting the services of a reputable bookkeeper to ensure appropriate records are kept. Also choose an accountant to help with tax returns at end of financial year.
A list of the documents which must be kept can be found at the Australian Taxation Office website
Help for business tax obligations can be found at the Australian Taxation Office Business website and, specific small business tax support can be found here
There are also a number of taxation concession entitlements for small business owners. Find out about these from the ATO website.
While most people will choose to begin their business independently, should you be in a position to hire employees, ensure all appropriate regulations and rulings are met, including Occupation Health and Safety Laws, Fair Work Australia rulings, anti-discrimination legislation and more.
An overview of your responsibilites as an employer can be found at www.fairwork.gov.au
If employing people, you will also need to register for PAYG Withholding Payments, for taxation, at the Australian Business Register and will need Workers Compensation Insurance of your own choosing.
Business Licences and Registrations
The majority of people will choose to begin their business from home and, should you choose to sell via the internet only, this may be where your business will remain. Whether this be the case or not, there may be licences required by your local council to operate a home based business, to have advertising signage, to have customers visit your home etc.
To find out which licences or permits apply to you, visit www.business.gov.au and the Business Licence Information website – this site has a state by state online questionnaire which will provide you with a list of all possible licences and permits required.
The simplest and most cost effective way of selling your new range of skin care is via an online presence. Websites are relatively inexpensive to set-up in comparison to the outlays of a retail store, and allow you to easily run your business from home.
Looking for assistance to set up a website for a reasonable price? Hippy Heaven is pleased to suggest the professional and very affordable website design services of SiteFresh Web Design. Packages start from just $250 and include graphic design, SEO and much more, plus, you will have two hours design work completed on your very own website BEFORE you decide to go ahead!
Visit SiteFresh Web Design and view their previous work in skin care website design.
We hope this information assists you to begin your skin care business journey!
Any information presented is solely for informational purposes only. Hippy Heaven Natural Beauty makes no guarantee that any of the information is complete. Hippy Heaven Natural Beauty cannot be held responsible for any loss or damage caused by reliance on any of the information or advice provided. If you are serious about your business, please consult a solicitor, accountant, or business consultant for advice. This document is not legal advice. Any use of this information is solely at the readers own risk
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