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14 Jul

How To Start Your Own Lipgloss Business From Scratch
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(Last Updated On: August 19, 2022)

A lipgloss business is one of those entrepreneurial ventures that require little investment and has a high-profit margin. It’s a fast and easy business plan to set up, requiring no prior knowledge of the cosmetic industry or any business acumen. This is why the lipgloss business is a popular side hustle for girls as young as 10 to 12 years. 

Something considered trivial by many and brushed aside as a luxury cosmetic item, lipgloss is an essential lip care and lip health product in many parts of the world. It’s not just synonymous with makeup and a glittery pout but is used as part of one’s regular hygiene and self-care routine. 

Originally invented in 1930 for the movie industry by makeup giant ‘Max Factor’, lipgloss has come a long way from being the transparent liquid coat it initially was. Lipgloss used to provide a thin layer of sheen to the lips, but these days, it’s a rich concoction of luscious oils, wax, flavours, glitters, and colours. 

Lipgloss is a favourite and highly sought-after makeup item of all age groups. With a high and ever-increasing demand, the lipgloss industry will only grow in size and revenue, thus providing a great business proposition for those with no experience in handling a company but a zest for creating something fun and attractive.  

If you want to jump on the bandwagon and try your hands at creating these yummy colourful blends while getting paid for it, this is your time. Starting afresh, you may be overwhelmed and confused about getting things rolling. Especially if you’re new to starting a business, it’s natural to feel nervous and anxious. The good news is we’ve addressed most of your queries and streamlined the entire process into a few quick and essential steps that hold true for executing most businesses. So if you worry you have only a few bucks to spare but still want to start your very own lipgloss business, read on to find out how.

How Much Is the Lipgloss Industry Worth?

The lipgloss industry widely covers a range of lip products such as gloss, balm, lipstick, and lipliner. The global demand for these makeup products has increased tenfold since the pandemic, as young girls and women are back to using their favourite lip treatments while finally stepping out for work, socializing, or doing groceries. 

According to statistics, the industry has already reached a revenue worth $4 billion annually and is expected to grow steadily at 3.7% to 4% each year. The forecast predicts this rapidly-growing industry will reach a monetary value of about $10-15 billion by the year 2025. This surge in revenue can be attributed to the increased demand for lipgloss and other lip products by a range of customers of different age groups in the future. 

A special element attached to this business is its association with the female entrepreneurship boom in the business sector. As more and more women and teenage girls choose to make worthwhile use of their time and savings by opting for productive endeavours, the world has experienced the rise of many female entrepreneurship setups globally. From baking to creative arts and book clubs, many hobbies and leisure activities have become profitable hustles for these women. Hence if you choose to become a part of this female entrepreneurship boom, you can rest assured of investing in a worthwhile and profitable industry. 

How Much Revenue Does the Lipgloss Industry Generate?

Due to the ever-increasing demand for lip products each year, the lipgloss industry has always been a fast-growing and ever-expanding setup. With new varieties, colours, and flavours popping up of your favourite gloss or lipstick each season, it’s no wonder that this industry never seems to lose its momentum. The demand outlives the supply, and profits of makeup companies soar to sky heights. 

It was only during the short span of two years of the pandemic that a slight dip in sales was experienced by the lipgloss industry. However, things were quick to go back to their old days’ glory as soon as the world opened up post-Covid as people regained their need for beauty products. 

According to recent statistical data, the current annual revenue potential of the lipgloss industry is approximately around $25,000 for items that are mid-priced and sold at a rate of about 5000 to 7000 items annually. If you sell a tube gloss for higher prices than this, your annual revenue can increase up to $150,000. At this rate, your profit margin also increases to about $12,500 annually. Now that is an attractive figure, but starting out, it’s wiser to keep prices at the lower end to gain a loyal customer base. Once your business picks up speed, gains recognition, and sales take off, you can increase product costs and automatically aim for higher profits. 

Should You Start a Lipgloss Business?

The answer to that is yes and yes. As we mentioned earlier, the pros of the lipgloss industry outweigh the cons. For starters and above all else, this industry is part of the female entrepreneurship movement, which has boomed like anything in recent times. Through such an endeavour, you are bringing something unique, creatively put together, and of value to the table. Profits aside, this gratifying sense of accomplishment is enough to make you want to set up your own lipgloss business.

Moreover, this is one of those types of setups for which you don’t need to go to business school, nor do you need to get specialized training by enrolling in a crash course. With an amount as less as under $100, you can make your entrepreneurship dreams a possibility by setting up your very own business. 

With a lipgloss business, you can be sure that there will always be demand for your products. People will not give up on beauty and make-up products anytime soon. Rather, customers have become more aware and conscious of their choices with a change in consumer mindset. They want organic and safe products, like coconut or argan oil, aloe vera, green tea extracts, etc. Also, the people want added features in the formula, such as sun protection. Besides women and teenage girls, there is a client base of self-aware men who prefer lip care products instead of chapped lips. 

In a nutshell, starting your own lipgloss business is a viable and profitable proposition. Not only does it require low startup costs and promises maximum profits, but it’s also a fun and creative way to stay busy while earning. The lipgloss business provides you with the flexibility of running it from home, online, or in a store. It gives you multiple options instead of limiting your operational plans. You can also choose your own work hours and schedule, as chances are, you’re your own boss. 

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How Much Do You Need to Invest in a Lipgloss Business?

There is no hard and fast rule regarding the amount of capital you need to kickstart your business. It entirely depends on what scale you want to operate on. Do you want to start with a basic DIY lipgloss kit purchased from Amazon and operate from home, or do you want to go all out and manufacture bulk quantities by sourcing ingredients from wholesale suppliers and booking a storage facility? Rather almost all of the startup costs vary according to your business model. This includes but is not limited to your marketing budget and licence fee. 

On the bright side, you can start a lipgloss business with an investment as low as under $50. However, adding essential costs, an estimated average investment range is between $700 to $7800. 

Your investment cost depends on the business model you choose for your lipgloss company. You can decide to either become a manufacturer or a distributor. If you decide not to make your own blend of lipgloss and just source it from retailers to sell online, you hardly need to invest anything. Besides essential licences and permits, all you need to cover is the marketing expense. 

However, most people prefer making their own formula, which truly creates their unique niche in the market and gives them a sense of satisfaction in creating something of appeal and value. For this, there is a different breakdown of essential costs. These include;

  • Manufacturing costs

The manufacturing costs include the cost of the basic supplies you would need to make your own lipgloss. If you enroll in a crash course to learn how to make lipgloss in the first place, you can add the fee for such a course here. 

  • Supplies and Equipment

These cover the cost of all the extra ingredients that will make your personal lip gloss in all its different varieties, as well as the mixing and packaging equipment. Such supplies include raw materials like flavour oils, dyes, lip gloss mixers, spatulas, packaging labels, plastic tubes and bottles, sticks, etc. 

  • Licencing Fee

You will require licences and permits to own and run your lipgloss business. The rules and regulations for such permits vary according to location, but applying for these requires paying a fee. 

  • Marketing

Once you have manufactured your products, marketing them to ensure sales is an essential cost. The amount of money you are willing to spend on marketing is also directly proportional to your sales. Marketing costs include website development and running costs, domain registration, social media and print media marketing tools and ads, etc. 

Here are the average costs for all the above essential expenses:

CostAverage
Registering business $175
Licence and permit fee$250
Insurance$300
Website $1500
Marketing$300
Business cards, brochures, etc.$250
Supplies$1500
Total Average Startup Cost$4,325

Your actual investment can fall on either end of the spectrum of the average cost. Your business plan and model will determine the exact amount you would be investing in setting up the business. 

How Do I Start a Lipgloss Business?

You can start your own lipgloss company without prior knowledge of business techniques and methods. Most online businesses have the same fundamental steps that need to be executed for the endeavour to be successful and profitable. 

In the case of lipgloss, the methodology and starting points are even simpler and faster, such that young kids and teens are efficiently running their personal lipgloss side hustles. The consideration is to get organized and systematic and plan ahead for all the key elements of the business. The foremost action you must take is to conduct thorough market research to analyze industry trends and customer demands. You need to educate yourself on what your competitors offer, what product sells the most, and how different items are priced. Additionally, you should investigate who your target customers are and what they would like. Besides, you would need to tap into the vendor market for sourcing supplies and list the best vendor options for yourself. It is endless research but an essential part of the process that cannot be overlooked. 

Carrying out this market analysis will help you streamline your business idea and goals. It will help you plan your products and pricing accordingly. By this time, you would have listed down your mission statement and your business model, i.e., whether you want to operate as a lipgloss manufacturer or a distributor. Once you have everything sorted, you can follow these fundamental steps that hold true for most businesses to get things going: 

  • Pick a Business Name and an Eye-Catching Logo

What do you want to call your business? Your brand name is the first contact point and impression of your company. Thus you may have to quickly decide upon a business name. However, keep in mind that the title you eventually choose should be short and easy to spell. Also, it’s a plus if the name is unique, but at the same time, it should be easy to remember. As a tip, avoid names that mention a location or a specific quality, as these elements can be restrictive if you want to expand your business to other locations and offer diverse products in the future. The title you select should catch people’s attention and make them curious. Sounds taxing? Don’t worry; there’s a solution to every query in this business. Simply use business name generating websites like ‘Wix Name Generator’ and ‘ Namelix.’ Once you have selected the name, you will need to research around to make sure it’s available. This can be done by Googling the name, checking social media, and relevant business registration government sites. 

After the name comes the logo. Your logo is a concise and sweet graphic representation of your brand. Naturally, it needs to be attractive, cheerful, and a reflection of your company. If you proudly possess a few basic graphic design skills yourself, you can independently design a great logo the way you want. Otherwise, there are several options for ordering a custom logo on freelance websites like ‘Fiverr’ and ‘Upwork’ and purchasing one-off ‘Etsy’. Additionally, there are online logo generating websites such as ‘Place It,’ ‘Design Free Logo Online’, and ‘Brand Crowd’, to name a few. 

  • Register Your Business

Brand name and logo out of the way; now comes the time to register your business. You will need to register to make your company official and exist on official records. It is a crucial step operate your business. 

Your business structure will be a key factor affecting the type of registration option you opt for your company. There are 4 registration methods;

  • sole proprietorship, 
  • partnership, 
  • corporation, 
  • and LLC.

In the first two, you or you and your partner are the company’s sole owners on paper. This means you directly get all the profits and are simultaneously responsible for any debts and lawsuits. In the latter two, your business is a legal body on official records. You will extract your profits through shareholder dividends. The plus point of registering your company as an LLC is that your personal data or money will not be under threat and will be fully protected if a disgruntled customer decides to sue you. In such an event, the company will be sued, not you. 

  • Build a Website

The importance of a good website cannot be mentioned enough. Your website is your brand’s online presence and a reflection of your virtual storefront and identity. Thus the graphic appeal, as well as the user experience of the site, has to be top-notch. This will ensure recurring customer traffic and a growing client base. 

There are many options for bringing your business website into existence. For starters, you can hire the services of a professional developer to do so, or if you are feeling too creative and brave, you can design one yourself. Building your own website from scratch has become super easy with the services of many credible web hosting providers like ‘HostPapa.’ HostPapa’s website builder lets you make your own site all by yourself in a few quick and easy steps. The company’s shared hosting service gives you alternative options of using WordPress also. Alternatively, you can hire the company’s services to build your website for you if you are not quite confident about building one yourself. 

Engaging a good web hosting company’s services is elemental in running an efficient website. When you opt for HostPapa’s web hosting services, you get full security and maintenance of your website, unlimited webspace, as well as free domain registration, business email, and much more. All of these are essential in obtaining a strong and potent online presence and for the smooth operations of your business. 

  • Create a Detailed Lipgloss Business Plan

Consider your business plan the blueprint of your entire business idea. A solid and workable business plan will act as a guidebook to help you launch your company and to keep running it smoothly. Your business plan will address all the important aspects of the process, such as your budget and startup costs, market analysis, product trends, pricing, etc. 

Designing a workable plan may be the non-creative and boring side of the process, as it deals with figures, facts, and numbers. Yet it’s detrimental to making your idea a reality and a successful reality at that. Hence, your business plan should include the following:

  1. Your business goals/objectives/mission statement
  2. Target customers
  3. Competitors’ market profile and products
  4. Your product catalogue with pricing 
  5. Marketing and sales plan (this includes your social media marketing strategies and sales methods)
  6. Operational plan ( how you plan to operate the business. Will it be running physically in a brick-and-mortar setup or will it be entirely online.  A real-life setup will include office running costs, supplies, logistical details, physical assets and equipment, etc)
  7. Financial Plan (consider working out a financial plan for at least the next 2-3 years. Details of this will cover laying down your startup costs, break-even analysis, profit and loss projections, operational expenses, etc)
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  • Get Supplies for your Lipgloss Business

In case you decide to manufacture your products yourself, there is a list of ingredients and supplies you will need to purchase. Consequently, you’ll have to make a purchase inventory to keep a record of everything. After that, comes the selection and dealerships with the vendors who will be supplying you with these materials and equipment. 

The typical supplies that you may require to make and package your own lipgloss are;

  1. Lipgloss base (a transparent base that serves as a foundation for the gloss. Glitter and other ingredients are added to this base).
  2. Natural oils ( lavender, coconut, argan oil, etc)
  3. Wax for thickening the gloss (beeswax, vegetable wax, etc
  4. Clays (for further thickening)
  5. Flavors ( for that extra yummy zing to the gloss. An array of flavour oils are available such as key lime, coconut, raspberry, spearmint, etc)
  6. Liquid lip dyes
  7. Wand tubes and squeeze tubes (for packaging your gloss)
  8. Pipettes and syringes (for mixing and transferring the gloss to the tubes)
  9. Spatulas (for mixing)
  10. Lip glitters (optional)

You can conveniently purchase most of these supplies online through Amazon or Alibaba. If starting out, budget constraints limit your purchasing power, you can opt for the cheaper DIY lipgloss starter kits available online. 

  • Promote Your Business

A sound marketing strategy is your business’s ‘making or breaking’ point. You may have created unique and amazing lipgloss varieties with cute packaging, and truly believe you are offering the world something special. Unless you get out there and tell the world about your offerings, they won’t sell. 

This means you need to market your product well across all online and physical channels. There are countless marketing options available nowadays. Luckily for us, the internet is a great place to start. Social media marketing is a giant industry in itself. You can make use of potent social media platforms like Facebook, Instagram, and TikTok to upload pictures and videos of your products and circulate them around. Engaging posts will increase traffic to your profile and grow your fan base, translating into more customers. 

Besides this, such platforms also provide the option of paid marketing. You can choose a subscription plan to market your product across the length and breadth of the platform’s subscribers. Google also offers the same paid advertising plan. 

Another interesting way to market your lipgloss is to have social influencers use them and promote them in their posts on TikTok or Instagram. Many influencers offer such services free of cost. Starting a personal blog and introducing your products to it is another great way of gaining customers. 

Other than social media and online marketing, you can go the conventional way and consider print advertising. This can include your business cards, product catalogues, and brochures. Real-life physical marketing tools work wonders as they stay with the customer for easy reference. 

Is a Lipgloss Business Profitable?

The lipgloss business can be a highly profitable venture as it requires minimum investment and brings forth great profits. As opposed to other lip products, the demand for lipgloss is high across all age groups, such as pre-teens, teenagers, young adult women, and middle-aged women. Several men also prefer buying some form of neutral lipgloss to maintain good lip health and moisturization. People also prefer lipgloss and lip balm due to their lower price points and other non-cosmetic reasons. Lipgloss thus serves as part of daily self-care for many people. These factors can lead to a larger revenue potential for the lipgloss industry. 

Therefore, the demand for lipgloss is always on the increase, and since the reopening of the post-pandemic world, it is predicted to grow at an enormous rate. According to statistics, the demand for lipgloss is increasing at the rate of about 3.7 to 4% annually. This is a promising figure for an industry which has already reached a revenue worth of $4bn. 

For an approximate profit estimate, if you sell each tube at a mid-priced range, e.g., $5, and sell 5000 tubes a year, you can expect to earn annual revenue of $25,000 with a profit of about $12,500. As the business expands, so can the price points of each tube, resulting in higher revenue and profit scales.

It’s pertinent to mention that focusing mainly on numbers isn’t a wise idea. To increase your sales, you should pay attention to the quality of your ingredients, customer service and satisfaction along with your marketing strategy and creating your unique niche. 

How Much Can You Sell Lipgloss For?

The reason lipgloss is so popular is its low-end price point as compared to its luxurious high-end relative, the lipstick. Starting out, we advise you to keep your prices low to attract customers. A lip balm can be sold for something as low as $1 a tube. Of course, limited or special edition pieces can be sold at higher prices, starting at $10 and going up all the way to $50. As a general rule, though, keep your price range market-competitive, both for the basic and the special varieties. Besides this, you can offer special offers and bundle package deals which increase the average order value. 

The great thing about the lipgloss business is that even when you opt for high-grade premium ingredients, your profit-sale ratio is reasonable at almost 50%. At the end of the day, there is no limit to how expensive and high-end your product can be. The trick is to get there slowly and gradually as you build a loyal customer base and learn the ins and outs of the business through trial and error. 

Do You Need a Licence to Start a Lipgloss Business?

To run any kind of business, you require the necessary permits and licences from your local and federal governments. A lipgloss business is no different. The rules and regulations regarding these permits vary from region to region. The best approach is to consult the official website of your local government to verify what procedure you need to follow to obtain a business licence. 

Additionally, as a lip product company owner, you will be required to comply with the Occupational Safety and Health Authority (OSHA)’s regulations and policies. Then there are other considerations such as copyrights, patents, and other industry-specific requirements. 

The lipgloss business falls is a part of the cosmetic industry, which is regulated by the Food and Drug Authority (FDA). For any business related to cosmetics to operate, it needs to comply with the FDA’s policies and guidelines. 

Obtaining a business licence is an extremely serious and crucial step of your business plan and should not be overlooked. Failing to comply with your area’s legal requirements can result in heavy penalties. 

How To Start Selling Online Legally

To make your business legal, you have to comply with the FDA’s framework and policies. The FDA has strict guidelines regarding product ingredients and manufacturing methods. For your operations to run legally, make sure you do not compromise on the quality of your products. 

The ingredients you use to manufacture your lipgloss should be natural and safe. This means they should not contain any harmful chemicals or additives. Your product labelling and packaging should be an honest representation of what lies inside the tube. The dyes and flavours inside the gloss have to be FDA approved. Remember, you cannot call your product organic unless 90% of the ingredients inside are organic. 

Moreover, the legalities of the business in terms of necessary permits should be followed before you get into an active operational mode. 

Final Thoughts

As the world has re-opened its doors to social interaction and the need to look beautiful, the demand for cosmetics and beauty products has increased after experiencing a slight dip during the pandemic. So if you want to try your hands at a productive money-making endeavour, now is a good time to start, and opting for a lipgloss business is an even better idea.

The lipgloss business requires no special expertise or knowledge on the owner’s part, doesn’t drain your pockets, and pleasantly brings in nice profits. All this while you get to create unique products of value for your customers. Hopefully, our guide on how to get started will be your go-to manual on this adventure. Best of luck!

Mehreen Hassan

Mehreen is a content writer with an added experience in proofreading and editing. She is a history buff who loves her book collection, especially South Asian history titles. While she is a good swimmer and a fitness freak, she also finds her zen painting and embroidering.

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