Should I Choose Cosmetic Factories Near Me Or Abroad? [Pros & Cons]
Looking for potential cosmetic factories is an exciting time for beauty brands, but the sheer number of options makes it hard to narrow down your search.
“Should I look for labs exclusively near me, or expand my search abroad?”
If this dilemma resonates, you’ve come to the right place.
Our in-depth guide below outlines the pros and cons of working with domestic manufacturers over offshoring. Plus, we discuss the two biggest reasons why formulating from home is not a viable option in 2024 and beyond.
Why Work With Professional Cosmetic Factories? Can’t I Make My Products At Home?
In the past, it was much easier for beauty brands to start small at home and scale up to a professional supplier over time.
But the game has changed in 2024.
Here’s the new reality: early lab partnerships are key to setting your business up for success.
Homemade Cosmetic Formulas Are Not Up To Scratch
Why? For starters, the bar for cosmetics today is so high that homemade formulas just can’t compete.
Making a quick lip scrub or body butter at home is relatively easy, but formulating effective anti-aging serums with cutting-edge ingredients and lab-grade equipment is an entirely different story.
The Dangers Of Formulating At Home
It’s not just about product effectiveness, formulating from home also introduces serious safety risks.
Imagine the worst-case scenario: a customer is harmed by one of your homemade products. You’ll not only have to cope with the emotional guilt of causing injury, but it also leaves you open to legal action.
Learn more about the potential dangers of formulating at home in our full blog post here.
Cosmetics need to meet specific safety and legal standards, and these regulations are only getting stricter in the US.
For example, the 2022 MoCRA Act means it is no longer feasible for brands earning over $1 million in sales to formulate at home. Learn more about the implications of the MoCRA act for your business in our full blog post here.
Save yourself this stress by partnering with professional beauty labs that specialize in working with new small brands like yours.
Cosmetics factories hire skilled chemists with expertise in formula effectiveness, ingredient safety, and mitigating contamination risks.
Plus, professional suppliers can help you create cosmetic products that comply with the ever-changing legal standards set by the FDA or equivalent regulating bodies abroad.
Ready to make the switch from home-to-lab? At Genie Supply, we’re experts at creating preformulated and customized cosmetic products for small brands like yours! Learn more about moving from home-to-lab with Genie Supply here.
The Pros Of Working With Cosmetic Factories Near Me
Now that we’ve discussed the downsides of formulating at home, it’s time to look for a suitable lab.
In theory, you can source beauty products from all over the world, however, there are serious downsides to choosing a cosmetics manufacturer from abroad.
1. The Power Of ‘Made In The USA’
In the age of social media, beauty consumers are more aware of the behind-the-scenes cosmetics manufacturing process than ever before.
It’s not enough to offer pretty packaging and product promises anymore, consumers are taking a closer look at the ingredients, ethics, and origin of products before they buy.
Not only are they searching for vegan, cruelty-free, and clean ingredients, but many are also making a point to check exactly where the product was produced.
As reported by Huff Marketing, The Reshoring Institute found that 70% of American consumers have a preference for US-made products.
Supporting the local economy is viewed as important, plus American products are often perceived as higher quality and come with the confidence that workers are paid fairly.
The same survey found that 83% of respondents would pay up to 20% more for goods made domestically.
That’s important for small home-to-lab businesses who rely on lower volume, higher cost agreements with cosmetic factories. You may be able to offset some of the additional costs by advertising your ‘Made in the USA’ credentials to American consumers.
At Genie Supply, we manufacture all of our cosmetics in the US from our Bedford, Indiana headquarters. Learn more about our US-based beauty lab on our website here.
2. More Efficient Supply Chains
Shipping and logistics tend to be an afterthought when choosing a cosmetic manufacturer.
Naturally, shipping goods from distant locations is more expensive than shipping them domestically, and import customs fees only add to the cost.
However, delivery expenses are only one of the potential supply-chain challenges when sourcing further afield.
Account for the time it takes for your shipments to reach US shores, clear customs, and finally arrive at your chosen warehouse.
Each additional step increases the chance of delays, making Just In Time (JIT) manufacturing difficult, creating inventory gaps, and hindering your ability to keep up with new product trends in the industry.
Plus, the environmental impact of a longer transport distance makes offshoring a bad business move for sustainability-focused businesses.
At Genie Supply, our US-based business prioritizes efficiency and offers an Amazon FBA dropshipping service to help ease supply chain stress for your business. Learn more about our special Amazon FBA dropshipping service here.
3. Domestic Cosmetic Factories Share The Same Economic & Political Reality
When you source domestically, your manufacturer experiences many of the same ebbs and flows in the wider business world as your brand.
What happens if the situation at home in the US is stable, but chaos erupts in your manufacturer’s country? What if this coincides with your brand going viral or if you are in the middle of scaling up your manufacturing?
This is where sourcing from abroad adds an extra element of risk. Manufacturing delays, delivery halts, and complete shutdowns are all a possibility.
According to BAIRD, the beauty industry was one of the top 10 most negatively impacted industries during the 2020 pandemic, with the impact on manufacturing including finished-good delays, product development delays, material shortages, and restrictions of shipments.
BAIRD further explains that the industry placed a new focus on supply chain diversification in response.
The American Chamber of Commerce in South China claimed that 64% of American businesses were considering moving production away from the country, while Japan’s government saw the pandemic as a sign to encourage reshoring to mitigate risks like this in the future.
4. Build A Closer Working Relationship With Domestic Manufacturers
Imagine that you have narrowed down your choice to two cosmetic factories - factory A or factory B.
Factory A works in a different timezone to your business, speaks a different language, and the distance is too far to travel.
Given these circumstances, it's not difficult to see how moving from the product concept phase to receiving your products in hand could be a lengthy process.
Now compare factory A with factory B:
Factory B is based in your time zone, speaks the same language, and is located close enough to open up the possibility for in-person meetings.
Building a working relationship with factory B is easier, results in fewer miscommunication issues or delays, and thus makes the product creation process from start to finish much more efficient.
At Genie Supply, we pride ourselves on our authentic, transparent communication and the personalized attention that we show to each and every client. Learn more about getting started with our US-based cosmetics manufacturing services here.
The Cons Of Working With Cosmetic Factories Near Me
1. Local Sourcing Limits Specialization Options
We recommend focusing on domestic manufacturers and choosing quality over quantity, but when you are entering a narrow, highly specific niche it can be difficult to find a suitable lab closer to home.
Expanding your search to include cosmetic factories abroad will naturally increase your chances of finding a lab that can formulate the types of products you need.
Some countries are renowned for their expertise in particular cosmetic niches: think South Korea for skin care, France for fragrance, or Italy for eyeshadow.
While you can also find high-quality manufacturers in these niches in the US, some international labs have access to unique manufacturing techniques or special ingredients that are difficult to access in the US – making these highly unique formulas difficult to replicate closer to home.
2. Local Cosmetic Factories Are Typically More Expensive
If you are on a severely limited budget, looking for cosmetic factories abroad could be the smart choice for your business.
The reality is that US-based manufacturers often contend with higher operational and labor costs compared to many alternative options abroad.
This naturally has an impact on the price and can offset some of the savings made from spending less on delivery closer to home.
However, don’t fall into the trap of assuming manufacturing abroad will always be less expensive than sourcing in the US! Do your due diligence, evaluate labs in multiple different regions of the world, and price compare before you make a choice.
For example, as we’ve discussed at length on the blog in the past, manufacturing in China is becoming increasingly expensive over time.
In sum, the main pros and cons of working with cosmetic factories near me for small beauty businesses include:
‘Made in the USA’ carries a price premium
Sharing an economic and political reality with your supplier mitigates risk
Closer labs result in a more efficient and less expensive supply chain
There’s greater potential for building closer relationships with nearby manufacturers
Local sourcing limits specialization options
Nearby cosmetic factories are typically more expensive
Ready to start working with cosmetic factories in your area? Genie Supply is proud to produce 100% of our skin care and color cosmetics right here in the USA. Learn more about creating your own range of cosmetics with our lab by calling: (812) 329-1105 or emailing: customerservice@geniesupply.com.
