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Can white labeling help the beauty industry weather an economic downturn in 2023?

by Staff GBAF Publications Ltd
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Looking forward in 2023, many businesses are bracing for a potential recession. For spas, estheticians, and beauty salons, finding ways to cut costs and increase profitability can be particularly challenging. One strategy that can help these businesses weather the storm is white labeling products. Traditionally, the beauty products industry is an area of the economy that has weathered past recessions better than others. While bigger luxury transactions, like vacations, fashion, and fine goods typically decrease, smaller less expensive “feel good” purchases like skincare and lipstick often remain steady and fill the void.

What is white labeling?

White labeling is the process of purchasing a product or service from a manufacturer or supplier and then branding it as your own. This means that the product is made by one company but sold under the brand name of another company. For example, a beauty salon might purchase a line of skin care products from a manufacturer and then sell those products to their clients under the salon’s own brand name.

Why is white labeling beneficial for spas, estheticians, and beauty salons?

There are several reasons why white labeling can be beneficial for spas, estheticians, and beauty salons including:

 

  1. Increased profitability: By white labeling products, businesses can mark up the price of the products they sell and increase their profitability. This is because the cost of purchasing the white label products is typically lower than the price at which you can buy products from a brand name. For example, when purchasing a moisturizer from a brand, if the cost to the esthetician is $20, typically the esthetician will sell if for $40. With white labeling, the esthetician could purchase the product for $10 and sell it for $40, with profitability increasing by 50% (or even $50 or $60). 
  2. It is simple! Once the brand and logo are created (which many businesses already have), the process is not much different from ordering products from an established brand, and any physical retail space in the business can be used for the new white label products.
  3. Greater control over product quality: When businesses white label products, they have greater control over the quality of the products they sell. This is because they can choose to work with manufacturers that use high-quality ingredients and adhere to strict production standards. This can help businesses ensure that they are offering the best possible products to their clients.
  4. Stronger brand identity: By white labeling products, businesses can create a stronger brand identity for themselves. This is because the products they sell are directly associated with their brand name, rather than the name of another brand. This can help businesses build loyalty and credibility with their clients.
  5. Cost savings: White labeling can also help businesses save money in the long run. This is because they do not need to invest in the research and development of their own products, which can be expensive and time-consuming. Additionally, white labeling allows businesses to take advantage of bulk purchasing discounts, which can further reduce costs.
  6. Captive buyers: With so many options open to consumers today, the idea of stocking brand name products poses the challenge of remaining competitive with online sellers. When a customer purchases a product for the first time in a salon, the easiest option for a reorder is to go to Amazon or another online retailer and have the product arrive to their doorstep the next day. Often, products online are cheaper than they would be in a physical salon. White labeling offers the small business owner exclusivity because their unique brand cannot be found elsewhere, and reduces competition for in-person and online sales. 

Tips for successful white labeling in 2023

If you are considering white labeling products for your spa, esthetician, or beauty salon business in 2023, here are a few tips to help ensure your success:

  1. Research manufacturers carefully: It is important to work with reputable and reliable manufacturers when white labeling products. Be sure to research the quality of the products and the production standards of the manufacturer before making a decision. Understand their history and reputation. Have they been around for a decade or more? Will they be around a year from now?
  2. Develop a marketing plan: Marketing is key to the success of any product, and white labeled products are no exception. Be sure to develop a comprehensive marketing plan that includes tactics such as a launch event, social media marketing, email marketing, and other partnerships to promote your products.
  3. Offer excellent customer service: Customer service is a crucial element of any business, and it is especially important when it comes to white labeled products. Be sure to offer excellent customer service to your clients, including prompt responses to inquiries and concerns, and consider offering a satisfaction guarantee for your products.

White labeling products can be a valuable strategy for spas, estheticians, and beauty salons in the face of a potential recession. By purchasing high-quality products from reputable manufacturers and branding them as their own, businesses can increase their profitability, offer unique and customized options to their clients, and strengthen their brand identity. By following the tips outlined above, businesses can successfully implement a white labeling strategy to help them weather any economic downturn.