It is well documented that in a global economic downturn some luxury items such as beauty products especially those with solid brand awareness experience high retail sales. Many believe that the cosmetics industry is a recession proof market because history has shown that women continue to spend on items that have the "feel good" factor and represent "value for money". Most people may not be purchasing high end/luxury items in this economy but they still continue to spend on themselves to some degree.
Certainly many parts of the beauty industry may be affected in different ways, whilst some consumers are not visiting the hairdresser, day-spa or beauty salon so often they may be replacing these visits with specialized "home-kits", beauty creams and cosmetics such as lipstick.
Many beauty-vistas are familiar with the term coined by Leonard Lauder (Estee Lauder) "Lipstick Index" as a forecasting tool for cosmetics sales. As with previous recessions this downturn may be no different, expensive global cosmetic brands and inexpensive local brands may produce sales figures that outdo other manufacturing sectors such as the food industry.
Beauty Industry producers and manufacturers continue to create and introduce new product to the Australian and Internationally market, many with sales figures soaring. Certainly one service provider to the beauty industry has found this trend in 2009, "I have received more enquiries from producers of beauty products this year than any other industry and whilst they are all mindful of production and packaging costs they are also excited by good sales results, I have clients who can't fulfill orders locally and internationally quickly enough, my job is to provide them with a 'recession-proof' packaging solution that won't break the bank so that they continue with a positive experience." Wardell commented.
Nathan Wardell is the Managing Director of Packserv Pty Limited, a packaging equipment hire and services business based in Sydney's inner west. Packserv houses an impressive set of services accompanied by an incredibly large rental fleet that is arguably the most comprehensive of its nature in the market place today, not only can clients hire a variety of fillers, cappers, labellers, conveyers and air-compressors but there is a myriad of exciting products available for hire that have never been offered in this capacity before, ink-jet coders, tube sealers, stelvin cappers, induction sealers and an on-site cool room/test facility are just some of the range for hire.
With plenty of global reports glowing about the success of the cosmetics and beauty industry it makes sense to jump in (head first and all) and begin that beauty product range you have always dreamt of …think again, being prepared with creative concepts, innovative products, finance and an operationally sound business plan in today's climate doesn't guarantee that your beauty range will have great success. Unless you can implement the manufacturing and promoting processes effectively, your product doesn't stand a chance!
"I have heard stories of producers and manufacturers spending allot of money travelling, researching and purchasing expensive packaging machinery to have all the promises of what these machines could do fall apart. I find that most start-up businesses can save this massive portion of their budget simply by hiring machinery and getting the right advice", Wardell advises.
Spending your financial resources on equipment designed to package your product may be unnecessary. Many new manufacturers have the misconception that to package orders (large or small) you either do it all by hand, engage a contract packer or purchase expensive machinery. One such manufacturer By Pure Pleasure, who produce a skin treatment range made from Himalayan & Dead Sea Salt infused with essential oils, has recently discovered hiring machinery has major benefits.
"Previously our 'factory' was the kitchen/dining room of an apartment where all the ingredients were mixed and each jar was hand filled.
This process was both time consuming and limited in the number of jars able to be filled. Labels were printed by an ink jet printer on clear stock with the promise that the labels would be both waterproof and oil resistant. Neither of these promises was kept and so we were applying 'dodgy' labels by hand. As our sales grew the amount of time needed to produce the number of jars required to fill the ever increasing orders became prohibitive. A cost effective alternative had to be found quickly so we asked our packaging suppliers for suggestions.
Their only suggestion was to contact Packserv Australia. Our first visit was certainly an eye-opening experience. Packserv showed us how we would be able to fill, seal, label (both waterproof and oil resistant) and cap more product in a day than we would have previously done in a month. This meant we were able to confidently grow our business, safe in the knowledge that we could fill all new orders both domestic and export.
We don't have to invest in a large stock holding in order to be prepared for possible future orders from distributors. Receiving a very large export order is no longer a problem. We are now able to promise delivery within a week whereas before it could take 3-4 weeks and we had to employ staff to help manufacture which reduced profitability.
In these uncertain economic times, it is very reassuring that there is a cost effective, time and effort saving way for small, medium and large businesses to bypass the need to employ extra staff and save money. This leaves us in total control of our budget, product wastage and resources." explained Ralph Dickinson, Managing Director.
So take the time to assess what kind of production and packaging equipment is essential to your products' needs, there is a lot of freedom (even in a recession) in being able to trial machinery with the back-up of technical support, surely that represents "value for money". Long live the lipstick.