As breakthroughs in skincare continue to emerge, patients want to take advantage of the newest products that promise to reduce wrinkles, brighten complexions and restore a youthful appearance.

As their physicians, you can address their needs by offering skincare products and many doctors are now creating their own private label products to cater to their patient base.

But is private labeling the route for you?  A look at the pros and cons may help you evaluate this option.

Advantages of Private Labeling

Private label products were once seen as inferior, but the private label market has changed dramatically. Now, physicians can work with compounding chemists to develop customized products with the latest, most innovative ingredients. This is key in today’s market, for ingredients and new technology of delivery systems are constantly evolving. Upscale packaging with dazzling graphics can rival products produced by skincare giants, such as Lancome and Estee Lauder.

Developing a private label line of skincare products offers numerous advantages. Firstly, you and your practice become the brand. With a private label line, you promote your practice and your reputation and your patients’ trust in how you drive sales. The packaging and label design can also be integrated into the overall image of your practice. This integrated marketing approach is a cost-effective way to increase patient awareness of the products and services you offer.

Secondly, your line can be tailored to match your procedures, catering to the unique needs of your patient population. Furthermore, you can incorporate the latest ingredients, and continue to improve upon existing products as more advanced ingredients come to the marketplace.

The final advantage is that your practice becomes the only outlet for these products, which heightens their cachet and exclusivity. Because your practice is the only outlet, you control the products’ distribution. Therefore, you can observe the results as patients return to purchase products.

A Big Investment

Although private labeling offers several advantages, you cannot take this step lightly. A successful effort requires a considerable investment in time and money. To determine whether private labeling is right for you, consider the following:

How much advertising will you be doing for your practice and skincare products? You have to let the public know about your line. You can do this in various cost-effective ways:  using your web site as a vehicle to advertise your products; creating an inviting display in your waiting room so patients can touch and smell the products; and offering a consultation night at your practice to explain anti-aging skincare products.

How well-known are you? If you’re well-known, your private label line will be easily recognized and differentiated from others. This recognition and respect will entice patients to try your line.

What does your immediate competition offer? Do you research and find out whether you are the only local physician offering an advanced private label line. Patients can easily find generic skincare lines with effective ingredients, but they’re looking for new and advanced skincare lines which have potent antioxidants and peptides. If your products offer these ingredients, patients will be willing to try them. Patients are self–educating themselves today on new technology and ingredients, so it is up to you to stay abreast of the newest developments in skincare ingredients.  

Is the majority of your business by referrals only? Referrals may include word-of-mouth testimonials about the efficacy of the product line. Some say this type of advertising is the best. However, you may still need to do some advertising in local media. People can learn about you, your practice and your products. It is a competitive industry, more today than it has been in the past, due to our poor economy, and few of us can survive by word of mouth alone.  

Do you have contacts with a chemist who can guide you to develop your line, or a consultant who can assist in guiding you in the right direction? The success of your new line relies, in part, on the skill of this expert. Finding the right chemist to formulate products with your chosen ingredients is not always easy. Be sure you find someone who has the knowledge and experience in working with cosmeceutical ingredients.

How much do you know about ingredients and the percentages required to make an ingredient work? You are steering the process, not the chemist. When you private label skincare products, you’re putting your reputation on the line, so be sure you have a strong knowledge about ingredients. Do your homework. Test-market your finished products with patients to see if any potential side effects arise. Doing so may give you reassurance that you have a great product line, or it may give you reason to work more closely with the chemist.

Do you have a logo? Developing a logo can be time consuming and costly. However, it becomes synonymous with you so make sure it is clear and makes a strong statement.  

Should you brand the skincare line with your name? If you’re well known and respected, patients trust you. They, therefore, will trust a product which has your name on it.

While profit margins with private label products can be higher than those for established lines, this may be offset by the cost of packaging. For cost-efficiency, the packaging is normally printed in large quantities. Furthermore, you’ll be required to inventory the entire batch the chemist produces, which will tie up working capital and shelf space. You therefore may need extra space for storage.

Seeking Another Route

If you don’t have time to develop a personal skincare line, many private label manufacturers offer advanced skincare products. All you have to do is incorporate your logo onto the packaging. This is a more cost-effective approach than private labeling and can save you a great deal of time. If you consider going with a private label manufacturer, make sure you research the following:

• Is the manufacturer licensed or registered to produce cosmetic products?
• Does the chemist have the required testing to substantiate the claims you should have on your packaging?
• How long has the company been in business? You want them to be around when your line becomes recognized.
• Do you know the difference between pharmaceutical and cosmeceutical ingredients? Many OTC cosmeceutical products are made by chemists. But FDA regulations classify certain ingredients, such as Retin-A and hydroquinone 4%, as pharmaceuticals. So they must be compounded by a pharmacy, not a chemist.

Manufacturers of private label products rarely produce the marketing and point-of-sale materials to promote your line of products, so if you choose a private label approach, you will need to develop these materials, or engage a consultant or ad agency. This cost is part of developing your line and requires careful consideration. Marketing materials can be expensive so it’s crucial to include this in your budge when making the decision to private label.

With a well-known professional product line, these marketing materials are readily available, often at no cost. As you know, many well recognized generic brands exist. They offer excellent ingredients with strong training tools and staff to assist you on the marketing side.

The decision rests with your goals for the future. If you’re a strong marketer and want to sell directly to consumers, then private labeling may be the best option.

In all cases, do the research and evaluate the approach that will work best for you!