MedEsthetics magazines offers business education and in-depth coverage of the latest noninvasive cosmetic procedures for physicians and practice managers working in the medical aesthetics industry.
Issue link: https://medesthetics.epubxp.com/i/123304
IT'S YOUR LINE Proprietary formulation is the most expensive option starting at around $20,000. Types of Private Label There are three different levels of private label from which to choose. Finding the right fit for your practice depends on your projected volume, budget and desired level of involvement in the development process. Basic private label companies offer existing products and lines that can be labeled with your logo. The manufacturer does not alter the formula, but simply places your name and logo onto the packaging. This is the most affordable option, allowing you to launch a physician-branded line for less than $5,000, and can include a full line of products or SKUs. Custom skincare lines allow you to work with a company's research and development team to tweak existing products by incorporating specific ingredients into the formulations. In addition, you can further customize your products with designer packaging, which costs about $2 and up per jar or bottle. Rates for this option typically start at $10,000 and go up based on the number of products created and the minimum packaging orders required. If you are required to purchase 5,000 jars, keep in mind that they do not need to be filled all at once and they can be labeled for different products. Proprietary skincare lines ensure that you have unique products and/or ingredients that no other practice offers. You work directly with a chemist to create your products from scratch. Because this requires testing, 42 MAY/JUNE 2013 | MedEsthetics proprietary formulation is the most expensive option starting at around $20,000 and increasing based on the number of products you want to create and the type of testing required. For example, fees can range from $2,500 to $10,000 per product for development and extensive testing. (NOTE: Co-branding with an established skincare company may be offered to practices or medspas with distinguished aesthetic services and retail success. This category of physician-branded products would link your name with the company's on the label of every product in the line.) Choosing the Products Before embarking on a private label or custom line, you will need to decide upon the number of cosmeceutical products you will carry under your own brand. You may choose to offer one specialty product targeting a specific condition or expand to a full retail line of up to 20 skin and body products. Reviewing your existing retail sales can help you hone in on products that will be most successful in your practice. Look at your top-selling retail products as well as back bar products used in your treatment rooms to identify categories that are most popular with your patient base. Also consider the types of products your patients are requesting. Using a questionnaire at check-in can be a valuable way to identify your patients' wants and needs. Other options to consider include choosing products with highly touted ingredients, such as collagen-stimulating © ISTOCKPHOTO.COM Regardless of the type of product line you choose to private label, the mark-up is entirely up to you, based on your wholesale, development and marketing costs. (For example, your physician-branded eye cream may cost $15 per item from production line to shelf. If you mark it up to $90 and give a 10% commission to your staff, you still net $66). The mark-up on these products can be 300% or more, depending on what the market will support. "Many brand name products that are sold in a physician's office are also available directly through the Internet, or they can be purchased from any other physician carrying the brand resulting in price wars," says Jim Krulisky CEO of Dermesse Skin Care (dermesse.com). "A private label product is only available at your office. There are no price wars. There is no losing of sales to the internet."