How to Start Lipstick Making Business in India 2021 – Investments, Profits, ROI

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How to Start Lipstick Making Business in India 

While fashion and beauty are gaining popularity, the Cosmetic Industry is booming with the increased demand for cosmetic products and the use of premium makeup and lip products for females. Cosmetic products or particularly lipsticks is not a necessity for consumers, but the feeling or the want of having a personified look, has increased the demand for such products, the majority of them in the female gender.  

Lipstick Making Business in India

Overview 

One of the major advantages of the Cosmetic industry is that the prices of the product are never affected by any change in the economy. Even after the end of Lockdown, the prices for the cosmetic industry, even for Lipsticks have remained the same, and the demand had reduced on a very small scale. 

If we consider the numbers provided by various reports as to the turnover for Lipsticks all over the world has a growth rate in an upward direction. A report by the NPD Group says that every year the Beauty or the Cosmetic industry takes a growth rate of 8% or more, the turnover of the same industry is always on an upward graph. 

Businesses dealing or planning to deal with Lipstick manufacturing have too many different types of lipsticks available to explore. The various types such as Lip balm, Lip gloss, Lip liner, lip stains, and so on, are just a few of the examples in which they can expand their market right from the beginning or else in the future. 

With so many different types to begin and explore, let us have a look at the basics of the Lipstick Making business in India.  

1. License Required for Lipstick Making Business 

 A. Drug and Cosmetics Act 

B. Firm Registration  

C. Current Bank Account 

D. Trade Mark 

E. GST Registration 

F. Trade License 

G. Business Pan Card 

H. MSME Udyog Aadhar 

I. ISO 9001 Certificate 

J. BIS Certification  

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2. Raw Materials required 

Just like any other business, you’d require some raw materials, that would act as a base for your product quality. The following are the various types of raw materials that are required for the Lipstick Making business in India. You have to be careful with not adding too much oil or another raw material in the process, as it may disrupt the end product. 

A. Herbal Ingredients 
B. Oil 
C. Wax 
D. Natural Oils 
E. Plant based oils 
F. Oils 
G. Butters 
H. Fragrance 
I. Preservatives 
J. Pigments 
K. Stearic Acid   

3. Equipment Required 

 Raw materials may require small amounts of funds, but you would also require various equipment that would help you to process your Lipstick products further, especially if you plan to manufacture various types of lipsticks. This equipment would amount to most of your funds. The Equipment ranges from various start to end processes. 

A. Plastic 
B. Aluminium tubes 
C. Heating Machine 
D. Mixing Tank 
E. Weighing scale 
F. Dye 
G. Moulds  
H. Flaming machine   
I. Gaze Machine  
J. Triple Roller Mill 
K. Jacketed Vessel 
L. Refrigerator 
M. Lipstick Filling Machine  

4. The Manpower 

 For Lipstick making business you would require few skilled workers and staff that has knowledge about Cosmetics and any experience regarding the same. In case you plan on manufacturing various types of lipsticks together, you may also need an accountant who would maintain records of your funds. To summarize, the manpower required is mentioned as follows. 

A. For setting up a small scale-based Lipstick making business, with one or multiple types, the necessary manpower that you should go for would be around; 2 to 5 skilled workers. 

B. And if we talk about a business that is on a medium-scale level, the required manpower would be; 5 to 8 workers at the most and around 9 to 12 workers in a large-scale Lipstick making business, with again multiple types.  

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5. Investment required  

As we read along about the required Raw materials, equipment, and manpower, we can calculate an estimate of the investment that would be necessary for our small or large-scale Lipstick making business. However, we also need to consider the funds that would be spent on marketing, branding, and the factory settings. The total investment that would be required for starting your Lipstick Making Business in India is as follows.  

CONTENT  AMOUNT 
Small Scale (Single or Multiple types)  1 to 4 lakhs 
Medium or Large Scale   5 to 25 lakhs 

5. Expected Profits from Lipstick Making Business 

With all the Investment or funds on the line, any businessman would have some expectations when it comes to the profits that can be earned through the Lipstick Making Business.  
Now, depending on the various types of lipsticks that a business is planning to deal with, the profits would vary. The profit margins are different for all the different types of lipsticks. On average, the expected profits that even a small Lipstick business owner can hope to earn is around 35000 to 1 lakh. 
If we talk about a Lipstick making business that is well-settled and performing really well, with a good brand name and market, they can earn more than 2.5 lakhs per month. 

6. Target Customers 

A. Local shops: Normally for any business the foremost targets are shop owners and Retailers. However, in the case of lipsticks, not many Retailers would be willing to stock your product. But Local shops would be ready to support you and spread the word about your product. 

B. Shopping malls: Whenever you enter shopping malls, there are varieties of shops that are out there, filled with cosmetics and skin care products. Malls are a perfect place for you to market your product and tie-up with the inhouse shops that are available in the shopping malls. 

C. Online Retail Stores: With so many E-commerce websites and Retail stores, you can always set up an account and get your products displayed on all the retail stores that are out there. Cosmetics and skin care products sell really well on such online retail stores; hence you should definitely give it a go. 

D. Beauty shops: The above channels would only grant you a sale if your customer is willing to purchase a cosmetic product. However, if your product is promoted at beauty shops, you have a very high chances of making profits as the customer who visits beauty stores has the intention of purchasing cosmetics. 

 7. Profit Margin 

 In the Lipstick Making business, you can expect to make an average profit percentage of 20% to 35%. 

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