How to Start Lotion Making Business in India 2021 – Costs, Profits, ROI

Table of Contents

How to Start Lotion Making Business in India 

Cosmetics or Skin care products have been a recent attraction for many people. Skin care products do not just help with maintaining the virtue and the originality of your skin, but it also helps to make you look good and feel more confident. Cosmetics is a major market, be it females or even males, the increasing awareness about skin and the rising pollution levels have increased the demands for Skin lotions and so on. 
 
Overview 
 
As we discussed earlier, Cosmetics already has a huge market, even on a global scale. On an average, every household would purchase a cosmetic or a skin care product at least once in a month. This leads to great market potential and repetitive demand of products for the businesses dealing in that particular industry. 
 
If we talk about Cosmetic or the Skin care products as a whole, it is considered as the most fastest growing industry when compared with other consumer goods. There are so many new brands that have begun to enroll themselves in some or the other category of the Beauty Industry. 
 
Taking reference from various reports that are developed on a global scale, a report by the NPD Group says that, every year the Beauty industry takes a growth rate of 8% or more, the turnover of the same industry is always on an upward graph.  
 
Let us dive straight into the details and understand the formalities and requirements to start lotion making Business. 

woman holds jar with cosmetic cream her hands StartupYo
Skincare. Woman taking care of her dry complexion. 

1. License Required for Lotion Making Business  

A. FBA License 
 
B. Firm Registration  
 
C. Current Bank Account 
 
D. Trade Mark 
 
E. GST Registration 
 
F. Trade License 
 
G. Business Pan Card 

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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 Lotion Making business in India. 
 
A. Herbal Ingredients 
B. Oil 
C. Sugar 
D. Natural Oils 
E. Plant based oils 
F. Antioxidants 
G. Citric Acids 
H. Lactic Acid 
I. Alkalis 
J. Amino Acids 
K. Silicones  
L. D Panthenol   

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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 Lotion products further at each stage. This equipment would amount to most of your funds. The Equipment ranges from various start to end processes. 
 
A. Digital Scale 
B. Surface 
C. Water Pots 
D. Hot Plates 
E. Weighing scale 
F. Overhead mixer 
G. Pipettes  
H. pH strips and pH metre   
I. Beakers 
J. Cleaning tools 
K. Thermometer  

4. Investment required 

After taking Raw materials and Equipment into account, we can get a small estimate of the investment that would be necessary for you to start this business. However, there are various other factors such as marketing, branding, and so on to consider as well for the Investment. The total investment that would be required for starting your Lotion Making Business in India is as follows.  
 

CONTENT  AMOUNT 
Small Scale   70000 to 3 lakhs 
Medium or Large Scale   5 to 15 lakhs 

5. Expected Profits from Lotion 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 Lotion Making Business.  
If we make an assumption, an average Lotion making business, on an intermediate level would be earning around 50000 to 1 lakh per month. However, these numbers are just an estimated value derived by taking various business’s experiences into account. 
If we talk about a lotion making business that is well-settled and performing really well, with a good brand name and market, they can earn more than 2 lakhs per month.  

6. The Manpower 

Be it on a small scale or a large scale, you would require skilled and unskilled workers to assist your manufacturing process or the staffing criteria. Here we shall take into account the necessary workforce that you would need for manufacturing or distribution purposes. 
 
A. For setting up a small scale-based Lotion making business, the necessary manpower that you should go for would be around; 2 to 3 skilled workers. 
 
B. And if we talk about a business that is on a medium-scale level, the required manpower would be; 4 to 8 workers at the most and around 8 to 10 workers in a large-scale Lotion making business.  

8. Profit Margin 

 In Lotion Making Business, with enough branding and a good marketing campaigns, along with a good competitive market price, you can expect to keep a profit margin between 30% to 40%.   
 

9. Target Customers 

 A. Local shops: Your First and foremost customers or target would be the people who live nearby you, your building, your colony, or your locality. And what better way to reach all the people in your locality but through all the local shops? 
 
B. Retailers: Most Retailers stock up products that are fast-moving, and that are a necessary consumption by the consumers. Lotions and skin care products are not a fast moving and well-favoured product by retailers unless it has a good brand, yet you can always approach them as a target for expanding your reach.  
 
C. Supermarkets/Shopping malls: A store having a variety of products with a huge stock is what a supermarket looks like. Once again, skin care products or rather Lotions are not stocked by them in huge amounts, but with enough convincing and explanation of market potential you can make a permanent buyer for your business, the same case is for Shopping malls. 
 
D. 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. Lotions and skin care products sell really well on such online retail stores; hence you should definitely give it a go. 
 
E. Medical Shops and Beauty Stores: Medical shops would willingly showcase your products as it is related to their industry, and as for beauty stores, they are your major target for getting your lotion displayed to the right audience. 

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