I’ve come across more and more Cosmetic Practices and Medical Spas asking me about private label products. I’m not sure what has spawned the latest interest? There hasn’t been an increase in private label manufacturers, actually in the past few years, due to the economy, a few have closed their doors. I don’t believe that consumers are actually asking for private label products. To the contrary with Skinceutical’s intense push in to the cosmetic medical space, (they have the financial clout of L’Oreal behind them) consumers are probably asking more for Skinceuticals more than any other product.
To launch a well positioned private label line it takes time and money. So many people believe it is a quick way to make more profit (margins tend to be better 70% on average vs. 50%) but what isn’t understood is how quickly those margins will become meaningless if sales drop.
If you select highly recognized, very effective skin care lines that have a medical focus then the marketing machine behind the products will drive sales through brand recognition, product integrity and great merchandising. In addition, it aligns your brand with highly credible products that enhance who you are as a cosmetic medical practice.
There are exceptions such as cosmetic practices that are sufficiently large enough or have garnered incredible brand loyalty that can successfully launch a private label line but those are the exception not the rule.
So, my opinion, focus more on highly profitable cosmetic medical procedures and compliment them with some of the great brands out on the market and you will make your fair share of product profit.