The cosmetics industry is undoubtedly one of the most saturated. The increasing demand for beauty products has spurred the sporadic establishment of beauty products and services brands around the world. Any entrepreneur that is thinking of venturing into the cosmetics business must be prepared to face fierce competition. In a Smartpreneur Live session with beauty coach and founder of COC Beauty School, Ayo Bassey, we gained a deeper understanding of the beauty business and how to start and thrive, especially in Nigeria.
Ayo Bassey is a certified cosmetic formulator and perfumer. She has over ten years of experience in cosmetic product formulation. Even though she bagged a BSc in Maths and Computer Science from Rivers State University of Science and Technology, she had always wanted to be a beauty entrepreneur.
After school, while others like her were looking for jobs, she was invested in setting up a beauty brand. Now, she functions as a cosmetics business coach and the Head Tutor at COC Beauty School. She has helped raise over 100 beauty entrepreneurs in over ten countries. Bassey still finds her Computer Science degree helpful as her knowledge in the field has helped her in areas such as graphic designing, website building and branding as a whole.
Before delving right into the dynamics of the cosmetics business, we would take a quick look at the definition of cosmetics to ensure that prospective beauty entrepreneurs fully grasp what it entails, and to address any misconceptions about the meaning of the term. According to Bassey, “Cosmetics are products that improve a person’s appearance or smell. Basically, they help make a person beautiful and more appealing.”
Cosmetics are comprised of skincare and hair care products.
Before Vs Now
Bassey explained that starting a beauty and cosmetics business is much easier today than before. This is because plenty of learning resources are available online and offline. Why is this important? “The first thing anyone interested in this business has to do is to learn how to make products or find out where to gain the knowledge from,” the beauty business coach said.
In Bassey’s case, learning meant a lot of hard work and determination. When she started, she wanted to learn how to make the products and sell them. The only issue was that she couldn’t find where to master the business in Nigeria. There weren’t many options in skincare as hair and makeup, but she ended up taking online courses and some physical training. “I had to learn from different people and different places. There wasn’t a single place to go to learn everything,” she said.
In the beginning, it was tough; it was mostly trial and error. Bassey tried selling all that she produced but it didn’t go according to plan. Later, she figured out what was working for her and what was selling.
The beauty expert encouraged anyone who wants to venture into the cosmetics business to be certain that they are ready to go through with it. She emphasized that it is critical to know how various products work as a business owner. “Even if you are not going to formulate [products] by yourself, it is good to know about the way formulation works and how these products are made; [from] the ingredients. After which you decide whether you want to produce or outsource production. If [you are] outsourcing, you have to get good partners, you have to draft a go-to market plan, figure out your target market and have a strategy because it’s all about your strategy,” Bassey stressed.
What to start with
Bassey highlighted that every business journey is unique and that it is not a one-size-fits-all affair. You have to know your goal and what you are offering your target market. However, she shared the foundational requirements for starting and cashing out with a cosmetics brand:
1. Product: You must have a product or service that is needed by your target consumers. This is at the centre of the business. If nothing is being sold, there is no brand or business.
2. Target Audience: This must be identified from the outset. These are the people you wish to attract and serve. Ask yourself who you are making products or services for. Who are your consumers?
3. Unique offering: Knowing the bullish nature of the cosmetics industry, this is one factor that must be considered if a brand wants to be seen and heard. This stems from the brand story. Two beauty brands cannot have the same story and brand message even if they formulate similar products. Use this to your advantage and set yourself apart from competitors.
4. Strategy: Every business needs a strategy and cosmetics businesses are no different. Create a strategy that revolves around the points listed above. Your strategy determines how and where to launch, marketing, sales, investments and overall accomplishments.
The first hurdle is building trust, especially if you’re selling to the Nigerian market as many believe that foreign beauty products are better than locally made products. Bassey disclosed how to handle this: “ It’s either you position your brand as foreign or [you] go with the smart alternative of making them realize how good [your] local [product] is. That will of course take a lot of education, [and] promotion. So building trust around that brand is the first challenge. Getting people to trust their brand enough to use it on their skin. When it comes to cosmetics, people are very sceptical because using something bad could cause long-lasting effects. The first challenge is building that trust enough for people to even agree to try the products.”
Once you’ve succeeded at being trustworthy, the next barrier could be pricing which can be sorted out because it’s all about positioning. Some people struggle with this, but once you position your brand right, it wouldn’t be an issue. Also, getting the right resources such as formulation materials, packaging, and other things needed to keep up with skincare standards could pose a challenge to newcomers in the business.
How to start without breaking the bank
It is widely assumed that a cosmetics business is capital intensive. However, while chatting with Smartpreneur, Bassey made it clear that it is actually not so expensive as many things can be done single-handedly. You can learn and acquire skills that enable you to do some tasks without outsourcing them. This way, it is very possible to use limited funds to start a cosmetics business and cash out!
Ayo Bassey also spoke about launching just a few products, one or a maximum of three as opposed to releasing many at a time. Your products should be irresistible such that anyone who hears about your brand story and sees your products would be moved to buy or at least inquire about the products. “You have to fill in the gap created by your strong competition,” she said.
Which category of beauty products is the most profitable?
While answering whether skin-lightening products cash out the most, Ayo responded in the affirmative. “In parts of the globe occupied by mostly black or brown-skinned people, skin lightening products cash out because of the way these people perceive beauty. Yes, brands churning out these whitening products might make a lot of money for only a short period of time, not long term. People who purchase skin-lightening products have a particular expectation and half the time, it’s scientifically impossible to achieve what they want so most times, these products don’t sustain a brand,” Bassey said.
She went on to say that a simple soap is a product that a business owner can easily cash out with because everyone bathes with soap, whether it is liquid or bar soap. Prospective beauty entrepreneurs should think about what people need. During the Covid pandemic, it was all about sanitisers. Beauty brands diversified their product offerings to include what people were in dire need of at the time.