Lipstick Making Business – How To Start In India

How to Start Lipstick Making Business in India 

Introduction

While fashion and beauty are attaining popularity, the Cosmetic Industry is flourishing with the augmented demand for cosmetic items and the use of premium makeup and lip products for women. Cosmetic products or particularly lipsticks are not an obligation for consumers, but the feeling or the desire of having a personified look, has augmented the need for such products, specifically in women.

A step-by-step guide to Lipstick Making Business in India

Guide to Lipstick Making Business in India
Guide to Lipstick Making Business in India (pic source: pixabay)

Market potential for Lipstick Making Business in India 

One of the major benefits of the Cosmetic industry is that the prices of the product are not affected by any change in the budget. Even after the end of Lockdown, the prices for the cosmetic industry, even for Lipsticks have continued the same, and the claim had reduced on a very narrow scale. 

If we study the numbers provided by several reports as to the turnover for Lipsticks all over the globe linearly has a growth rate. A report by the NPD Group states that every year the Beauty or the Cosmetic industry makes a growth rate of 8% or higher than that. The various lipstick types for instance Lip balm, Lip gloss, lip stains, Lipliner, and so on, are just some of the examples in which they can explore their market right from the starting or else in the later stages. 

With several types to start and explore, let us have an idea of the essentials of the Lipstick Making business in India.  

License, permission and registration required for Lipstick Making Business in India

Lipstick Making Business is a cosmetic business model so you will need some licenses before initiating it. The below is the list: Registration of firm, GST registration, Trade license, Pollution certificate, MSME/SSI registration, EPI and ESI registrations, Trademark, IEC code, and FPO act.

  • Business Entity: The first registration for any business is to register it as a business entity by knowing about the form of the organization. It could be as a sole proprietorship or a partnership or a limited liability partnership or a one-person company. This will help in availing a few benefits to the business and must, therefore, be selected carefully before registering the business at the Registrar’s office.
  • Shop Act or Trade License: As the Lipstick Making business for example in Maharashtra, India requires applying for a Shop Act License from the local municipal authority to run the business. This license helps manage the working conditions along with working hours, leaves, wages, holidays, etc. of the employees and supports the business to run smoothly.
  • Udyog Aadhaar Registration: As Lipstick Making is categorized as a small business and hence it must be registered under Udyog Aadhaar which is a registration and recognition for MSMEs- micro, small, and medium enterprises.
  • GST Registration: Every business, including Lipstick Making, should associate with taxes at some point and for monitoring a single uniform taxation structure, the business should get a common GST number which stands for Goods and Service Tax.
  • BIS certification: Apart from these registrations the business should get BIS certification as well as tax liabilities.
  • No Objection Certificate from State Pollution Control Board: Lipstick Making doesn’t cause any pollution so no clearance is needed, however, it is recommended to check it with the State Pollution Control Board of the locality where the business is established.
  • Business Pan Card 
  • Current Bank Account 
  • Drug and Cosmetics Act 
  • ISO 9001 Certificate 

Raw materials required to start Lipstick Making Business 

For any business, there is a requirement for specific raw materials that would be crucial to your product quality. The following are the different types of raw materials that are essential for the Lipstick Making business in India. You have to be cautious with not adding too much oil or any other raw material in the process, as it may obstruct the end product. 

  • Herbal Ingredients 
  • Wax 
  • Plant-based oils 
  • Oils 
  • Natural Oils 
  • Preservatives 
  • Oil 
  • Stearic Acid   
  • Fragrance
  • Butters 
  • Pigments 

Equipment required to start Lipstick Making Business 

Raw materials used for this business use a part of the capital but the different machines used in this business will require many portions of the funds particularly when you desire to manufacture different kinds of lipsticks. The Equipment required from the beginning to getting the end product is mentioned below.

  • Plastic 
  • Aluminum tubes
  • Molds  
  • Flaming machine   
  • Triple Roller Mill 
  • Jacketed Vessel 
  • Gaze Machine  
  • Heating Machine 
  • Mixing Tank 
  • Weighing scale 
  • Dye 
  • Refrigerator 
  • Lipstick Filling Machine  

The manpower required to start Lipstick Making Business 

For Lipstick making business, an individual can appoint a few skilled workers and staff that has an idea about Cosmetics and any knowledge regarding the same. In case you desire on manufacturing various types of lipsticks simultaneously, you may also require an accountant who would organize records of your capital. To be precise, the manpower needed is stated as follows. 

A. If arranging a small scale-based Lipstick making business, with one or multiple lipstick types, the necessary workers that you should go for would be about; 2 to 5 skilled workers. 

B. And if we plan for a business that is on a moderate level, the required staff would be; 5 to 8 people at the most and almost 9 to 12 workers when thought about a large-scale Lipstick making business.

Investment required to start Lipstick Making Business 

As we go through the needful raw materials, machinery, and workers, we can analyze and arrive at an estimate of the capital that would be essential for either a small or large-scale Lipstick making business. Also, we must plan about the capital that would be utilized on marketing, promotion of the brand, and the factory set-up. The total investment that could be estimated based on the needs for starting your Lipstick Making Business in India is explained below.

Total amount required to start Lipstick Making Business 

  • Small Scale (Single or Multiple types) Rs. 1 to 4 lakhs 
  • Medium or Large Scale Rs. 5 to 25 lakhs 

Profit from Lipstick Making Business in India

All the business owners definitely will have some projections when it comes to the returns that can be gained through the Lipstick Making Business.  Now, based on the numerous types of lipsticks that a business is forecasting to deal with, the profits would differ. The profit margins vary for all the diverse types of lipsticks. On average, the expected gain that even a small Lipstick business owner can expect to earn comes to be Rs. 35000 to 1 lakh. When we see about a Lipstick-making business that is well-settled and performing awesome, with a proper brand name and market, they can gain 2.5 lakhs per month or more.

Profit margin in Lipstick Making Business

In case if you miss this: How To Start A Biryani Business In India.

Profit margin in Lipstick Making Business
Profit margin in Lipstick Making Business (Image credit: pixabay)

For the Lipstick Making business, you can predict an average profit of about 20% to 35%.

Target customers for Lipstick Making Business in India

A. Local shops: Usually for any business the primary targets are store owners and retailers. However, for lipsticks, not many traders would be desired to stock your item. But local shops would be willing to support you and even communicate the word about your item within his contacts.

B. Shopping malls: Whenever you enter shopping malls, there is a range of shops that visible, filled with cosmetics and skincare items. Malls are perfect locations for you to publicize your product and make deals with in-house stores in the shopping malls. 

C. Online Retail Stores: Currently you can see several E-commerce websites and retail stores. Cosmetics and skincare products are sold very easily using online retail stores; hence, it’s a great opportunity to try online. 

D. Beauty shops: The above segments would only grant you a sale if your customer is interested to purchase a cosmetic product. However, if your product is available at beauty shops, you have a very major aspect of making profits as the customer who plans to go to beauty stores has the objective of buying cosmetics. 

How to sell your Lipstick product

You can sell your Lipstick product in local markets or you can even sell in online stores. You can also register in B2B websites and B2C websites in online markets to promote Lipstick Business products.

You can also sell your products in supermarkets, small stores in shopping malls, etc. Advertise about your product through social media to get a huge number of clients in this way you can increase and promote your business. There are very limited Lipstick Business manufacturers in India, but the demand for encouraging the new product is also high because of its medicinal properties. So, you need not worry about the market. You can sell your product based on the Lipstick Business wholesale price in India.

Marketing strategies to promote your Lipstick product

As Lipstick are consumer goods you must be careful on creating brand equity, maximize brand perceptibility, and endorsing brand usage. You can begin selling them locally by starting a distribution channel. Approach some retail brands to have a deal with your business. In India saloons, hotels, retail markets, shopping malls, online markets, cinema field, cosmetic companies are the major customers of Lipstick.

You can plan for some creative designs for Lipstick. Register your product with diverse online shopping platforms to entice online consumers. Get prepared to establish an online presence in your Lipstick making business. Give some clear informative facts there about numerous varieties of Lipstick and their various colors and aroma.

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