When working with a cosmetic manufacturer, skincare brands face a big decision: private label or custom formulation? This choice is important in shaping your brand’s identity, market positioning, and future success. While private label offers quick and cost-effective solutions, custom formulations allow for more creativity and exclusivity. In this post, we’ll guide you through the decision-making process to help you choose the right approach based on your goals, resources, and market demands. 

What is Private Label?  

Private label products are pre-formulated skincare solutions produced by third-party manufacturers and sold under your brand’s name. Essentially, the product already exists and requires minimal adjustments, such as adding your brand’s logo and packaging. 

How It Works 

• Choose an existing formula from the manufacturer’s catalogue. 
• Make slight modifications if desired, such as scent or color. 
• Apply your branding and packaging. 
• Launch the product without the need for R&D or extensive testing. 

Private label options are great for businesses looking to enter the market quickly with a proven product. However, the trade-off is less control over ingredients and formula customization.  

What is Custom Formulation? 

Custom formulations are unique skincare products developed specifically for your brand. This means you can create a formula that matches your vision and needs. 

How It Works 

• Begin by collaborating with the manufacturer to design the formula. 
• Select ingredients based on your brand’s ethos (e.g., clean, vegan, organic). 
• Go through research and development phases to refine the formula. 
• Conduct stability testing and regulatory compliance checks. 
• Launch once the product is finalized and tested. 

With custom formulations, you have complete control over the product’s ingredients, performance, and packaging. However, it’s a more involved process requiring time and investment. 

Private Label vs. Custom Formulation: Key Differences 

Choosing between private label and custom formulation depends on your goals, budget, and timeline. Let’s break down the key differences: 

• Speed to Market: Private label products allow for faster launch times, as the formula is already developed. You only need to focus on branding and packaging. On the other hand, custom formulations take longer due to the development, testing, and regulatory approvals needed. 
• Cost Considerations: Private label generally involves lower initial costs but may have higher per-unit costs. Since the formula is pre-made, there are fewer costs upfront. Custom formulation, however, demands a higher initial investment, as it includes R&D and testing fees. 
• Uniqueness & Control: With private label, customization options are limited. Many brands use the same or similar formulas, which can lead to a saturated market. Custom formulations, however, give you complete control over the ingredients and final product. 

Factors to Consider When Choosing Between Private Label and Custom Formulation 

Budget: Which Option Fits Your Financial Plan? 

Private label is the more affordable option in the short term. It’s great for startups or brands with limited budgets looking for a faster return on investment. Custom formulation requires a higher upfront cost, but it can justify the investment through exclusivity, premium pricing, and a unique product offering. You need to evaluate both your immediate budget and your long-term financial goals to determine the best choice. 

Vincent Caballer, the owner of Medpak Solutions, a leading cosmetic manufacturer based in Florida, USA, “It’s crucial for brands to assess whether they’re ready for the investment in time and money that custom formulations require, but the rewards can be substantial in terms of brand loyalty and growth.” 

Time to Market: How Quickly Do You Need to Launch? 

Private label products are ready for market quickly since they require minimal changes. Custom formulations take more time, as they involve creating and testing a new product from scratch. If time is critical for your brand, private label is the best option. However, if exclusivity and a unique offering are essential, custom formulations may be worth the wait. 

Brand Vision: How Unique Do You Want to Be? 

Private label products can be an excellent choice for brands that need to launch quickly, but they often lack differentiation in the market. Custom formulations, however, provide the opportunity to create a truly unique product that matches your brand’s values and vision. If brand differentiation is a priority, custom formulation offers the flexibility to create something special. 

Ingredients and Certifications: What Are Your Product Standards? 

Private label options may not provide a wide range of ingredient choices or certifications (e.g., organic, cruelty-free). Custom formulations give you the freedom to select ingredients and pursue certifications that resonate with your target audience, such as vegan or all-natural products. Let’s say your customers demand eco-friendly or ethical products, custom formulations give you full control over the ingredients, and certifications. 

Vincent Caballer added, “Custom formulation helps build a stronger brand identity, which can boost market success. While private label offers standard formulas, Medpak Solutions allows customization within private label to give brands unique products while maintaining cost-effectiveness and faster production.” 

Scalability: Is Your Brand Ready for Growth? 

Private label products are easy to scale since the formulas are already developed. However, the lack of uniqueness can make your brand blend in with competitors. Custom formulations offer a unique selling proposition, but they require more attention when scaling to ensure the consistency and quality of your unique product. Moreover, custom formulations allow for long-term scalability and differentiation, while private label products may limit your brand’s ability to stand out. 

How to Work with Your Cosmetic Manufacturer: Tips for Success 

Building a successful partnership with your cosmetic manufacturer is key to getting the best results, regardless of whether you choose private label or custom formulation. 

• Clear Communication: Start by discussing your goals, values, and expectations with your manufacturer to ensure alignment. 
• Collaborative Development: Whether choosing private label or custom formulations, work closely with your manufacturer to ensure the product fits your needs. 
• Sampling Process: For custom formulations, always request prototypes and test batches before proceeding to full-scale production. 
• Ask About Compliance: Ensure your manufacturer meets all necessary regulations, especially if you’re making specific claims like organic, cruelty-free, or vegan. 

The Decision-Making Framework: Private Label or Custom? 

To help you decide between private label and custom formulation, consider this decision-making framework: 

1. Define your goals: Do you need a fast launch or are you looking for exclusivity? 
2. Assess your budget and time constraints: Can you afford a custom formulation, or do you need something more cost-effective? 
3. Evaluate market need for uniqueness: How much value does your target audience place on unique products? 
4. Consult with your cosmetic manufacturer: Ask for expert advice based on your brand’s goals and resources. 

Choose Wisely for Your Brand’s Future 

Both options have their advantages, but the right choice will help propel your brand forward. Whether you choose private label for quick market entry or custom formulations for exclusivity, a trusted cosmetic manufacturer will be a key partner in your skincare brand’s success. For personalized advice on your skincare line, reach out to Medpak Solutions and explore the best manufacturing options available.