Thank you for you inspiring words. I started a handmade skin care business but it failed miserably. I gave it my best shot and wasted a lot of money. My question is do you think the beauty market is saturated and what tips would you give to start a successful business.
This is a great question, Denise, you’re not the first person to ask me this.
The truth is there are A LOT of skin (and hair) care products out there and a good majority of them have exactly the same ingredients so consumers find it difficult to distinguish good brands from rubbish brands. The result is that a buyer may continue to buy a product for many, many years although that product that doesn’t work particularly well for them.
The vast majority of supermarket skincare products are in fact owned by just two companies, Proctor & Gamble and Unliever; moreover, a good proportion of more upmarket skin and beauty brands are owned by L’Oreal and Estee Lauder.
This has certain repercussions for people who want to start a new brand:
Despite this there are some advantages for you:
Is the market saturated?
It is definitely saturated for “me too” products but it’s not saturated for products that come out with a great story and attempt to do something different.
To succeed today you need to find a very narrow niche, don’t try to be all things to all people and you need to do things a little differently to turn heads and make people consider switching products.
You cannot succeed with a product that’s dull and appears to be no different to existing brands.
So, how do you succeed?
A. Have a great story.
Do you know Levi Roots? He created a cooking sauce when there were thousands of sauces on supermarket aisles. He went on to Dragon’s Den (the equivalent of Shark Tank in the US) and nailed it with his pitch.
He wasn’t same-old, same-old.
He came on with his guitar, he was authentic – he didn’t attempt to change his Jamaican Patois and he charmed us all with his reggae-reggae sauce jingle.
After that interview you just thought, I want that guy’s product, that guy deserves to be rich…and rich he became.
B. Have fantastic branding.
People have more money nowadays so they’re willing to spend a bit more for something that looks amazing.
Middle class consumers care now, probably more than ever, about how they are perceived and they want to buy things that make them look wealthy and successful.
Poorly branded products have no chance.
C. Build your own audience, grass roots style.
Have you heard of Michelle Phan? She is a beauty vlogger on YouTube that’s spent hundred of hours producing beauty videos.
She grew such a large audience that L’Oreal paid her several million dollars to have her own brand of makeup products, Em. Ultimately that product line didn’t make the type of money L’Oreal hoped for, the suspicion is that the products were overpriced for the type of fans Michelle has (young and just starting out in life), but the brand is still around; it’s now owned by Michelle’s own company, Ipsy.
Building a big following means you can sell directly to a certain audience and although most beauty bloggers won’t get bought by the L’Oreals of this world, they have an opportunity to create their own brands, they have influence and can disrupt people (and industries) from their usual way of doing business.
What do you need to build a significant audience?
Time, lots of time to produce vlogs, blogs and incredible images for your social media pages.
I hope this answered your question, Denise.
Have a business or life question you want me to answer? Please email it to me with the subject “Question”. Note that all such questions will be answered as a blog post and will be sent to my full email list.
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Levi Roots on Dragon’s Den
30/7/2016 09:49:41 pm
Great insights Heather! This has me really thinking of how to break from the usual. Creativity is key.
1/8/2016 03:23:49 pm
Great to hear! :)
1/8/2016 05:58:09 pm
Thanks so much, for the reply the blog is brilliant and very helpful
17/8/2016 06:58:48 am
You're more than welcome, thanks for the awesome question.
2/8/2016 05:18:10 pm
so true Heather. Thanks for sharing this. I notice that when I buy products it has a lot to do with the brand and some unique twist. For example businesses like Toms and Warby Parker sell the basics(shoes and eyeglass frames) but people invest because they can buy these basics at low prices and part of the money goes to charity. I can't wait until someone comes up with some unique eyeglass frames for the women of the diaspora. I think there's room for more stylish low cost eyeglass frames.
17/8/2016 07:00:27 am
Thanks Sandy - very interesting perspective :)
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Heather on Wealth
I enjoy helping people think through their personal finances and blog about that here. Join my personal finance community at The Money Spot™.