As we have already seen on the page Private label, the advantages of creating your own brand in general, here we will go through how to set up the process in such a way to make it much more profitable for you.
There are two options you can cooperate with manufacturer of cosmetic products:
- Manufacturer sells you the finished product under your Trade Name.
- Manufacturer sells you only "bulk", in barrels from 20lbs to 200lbs, and you do the rest of the work through a Sub-contracting company.
Still first option has a number of significant flaws, which we, in “Pelen” can successfully manage.
The main benefits of working with LLC "Pelen" for creating your brand are as follows:
- Reduce cost as low as possible
- Postpone customs payments
- Provide maximum flexibility in the development of your business
Manufacturer specializes in the creation of cosmetic products, which is his major purpose and originality. At the same time, the rest of the components can be purchased from other sources, and the entire cycle of work for production of the final product can be fulfilled by outsource with better quality and cheaper.
For example, end product is a nail treatment item, the manufacturer of which is in Western Europe or the United States. For final product (nail care product or nail polish), are required bottle, cap and brush, at least. These components are most likely produce far from the manufacturer of cosmetics, somewhere in China or India. Thus, the producer of cosmetics imports these components, pays for their delivery, pays customs fees and taxes, and so on... or purchases them on the local market (hence all costs are already included into the price, as well as the percent of middleman)
Then, they put on necessary drawings to the bottles and caps; bottling of bulk, labeling, packaging of final products into boxes, (by the way, boxes also purchased from third party). Finished goods are put to the warehouse and waiting for their shipment to the customer.
It’s not a secret that the cost of a full cycle of works in the country of manufacturer (in our example USA or Western Europe) is very high, and for his work the manufacturer must get his profit.
This is the way that your purchase price for product from manufacturer formed.
Now final product will be sent to the customer, who for his part will pay shipping, customs fees and taxes.
Have you noticed that shipping and customs fees are paid twice? But now the expenses will be calculated basing on much larger amount which includes price of all components, cost of work done and customs fees that have been paid several times.
Thus, you get a bloated cost price of finished products, which you cannot influence in any way, because the entire production chain is not under your control.
Significant is that part of cosmetics itself (the content) usually is in the range of 8%-30% of the total purchase price of the manufactured product. It means, that the main components of the cost of finished product - not its contents!
Our goal is to save as much as possible of the remaining 92% -70%. In doing so to reduce, total first cost of the product and improve your competitiveness and appeal in the market.
In today’s saturated market, it is so important to create a competitive product and to be flexible enough while pricing.
The best way for this is to follow the next rules:
- To let each contractor in production chain of your product to make ONLY his own part of work.
- Avoid double costs for international shipment of components and elements of final product.
- Establish cooperation with contractor who specializes in filling / packaging of cosmetic products.
We, in “Pelen” believe that that we can be useful in creating your product, using our many years' experience and favorable geographical location.
Our company does not produce cosmetics; this gives you full flexibility in choosing the right manufacturer.
We do not make any changes or processing with components or bulk obtained in barrels; this is why we can indicate that product has country of origin based on manufacturer of the bulk. For example, if bulk produced and received in barrels from USA, then on your product, accordingly, will be stated "Made in USA".
With us you can easily combine in one brand best cosmetics from different manufacturers from all around the world and save on creating and promotion of a new product.
In accordance with the requirements of the customer, "Pelen" will perform a full cycle of work to establish the finished product under your trademark:
- Filling / packing liquid and gel-like cosmetics into appropriate containers like vials, tubes, plastic jars, bottles, etc.
- Screen printing (silkscreen printing on glass bottles)
- Foiling (applying decorative strips to the caps)
- Packing in blisters
- Packing of finished products
- Warehousing of components and finished goods
- Transportation of finished products to Russia or abroad by any kind of transport
- Customs clearance, import / export
- Quality control of final products
We can also assist in further distribution of your products.
Our geographical location in Kaliningrad region has additional significant advantages:
Firstly, Kaliningrad Region has direct access to sea ports, railway and road junctions, for convenient transportation throughout Western and Eastern Europe.
Secondly, Kaliningrad Region has been granted status of a Special Economic Zone (SEZ) allowing, with the right approach, to receive significant customs and tax benefits.
If you plan distribution of your products on the territory of Russian Federation, than working with us you will be able to get two main advantages:
- Delay of paying customs fees and VAT
- Reduction of initial costs
For example, you keep the manufactured goods in our warehouse; receive order from your customer and probably upfront payment for the order placed. Only after this we will send part per subject order for customs, procedure will be passed right exactly before shipment from Kaliningrad Region to Russia. Thus, you have postponement to pay customs fees & VAT, which you can pay already from the amount of the order received. Moreover, which is very important, you reduce initial costs on manufacturing.
If you plan to export your products outside Russian Federation, than due to special terms of Kaliningrad Region, you do not bear additional costs for customs payments and VAT. So, this way, you eliminate one more eventual "hand" in the chain of manufacturing of the product and additionally increase your competitiveness.
We will be glad to answer any of your questions and suggestions. To obtain contact information, please visit the Contacts.