One of the Biggest Challenges in Manufacturing Cosmetics

In the dynamic world of cosmetic manufacturing, the quest for quality, innovation, and customization is paramount. For beauty entrepreneurs and businesses, the road to success often encounters a significant obstacle - Minimum Order Quantities (MOQs). 

These MOQs, determined by manufacturers, are set to streamline the production process and reduce costs per unit. While this approach makes sense from a business perspective, it can be quite a challenge for smaller enterprises, startups, and budding beauty entrepreneurs in the beauty industry. Read on to find out why manufacturers insist on implementing these MOQs. 

Why does manufacturing cosmetic products require high MOQs?

There are a few main reasons why Korean cosmetic manufacturers require high MOQs.

Reason 1: Economies of Scale

Manufacturers in various industries, not just the beauty industry, often employ the strategy of setting high Minimum Order Quantities (MOQs) to achieve cost-effective production. This principle is rooted in the concept that as the production volume increases, the cost per unit decreases, offering economies of scale. In simpler terms, the more units produced, the lower the average cost per unit, contributing to improved profit margins for both manufacturers and suppliers. While this approach can be advantageous for larger enterprises with substantial capital and storage capacities, it can pose challenges for smaller players in the industry.

For smaller beauty businesses or beauty startups, high MOQs may present a barrier to entry due to limited resources and smaller-scale operations. Meeting the minimum order requirements may strain their financial resources, tying up capital that could be allocated elsewhere in the business such as marketing. Additionally, smaller players may face difficulties in managing large inventories, leading to concerns about product shelf life, storage costs, and potential obsolescence.




Reason 2: Resource Allocation

The intricate nature of the cosmetic manufacturing process entails the allocation of various valuable resources, each playing a pivotal role in the production cycle. These resources encompass not only raw materials but also extend to critical elements such as time, skilled labor, and specialized equipment. In the cosmetic manufacturing industry, efficiency is often closely linked to economies of scale, where larger production runs tend to optimize the utilization of these resources, resulting in lower costs per unit.

Smaller orders, on the other hand, can pose challenges to efficiency and profitability for cosmetic manufacturers. Handling multiple small orders may require more frequent production changeovers, leading to downtime and decreased overall efficiency. Additionally, the coordination and management of smaller quantities demand a more intricate approach, potentially increasing labor costs and the risk of errors in the production process. The utilization of equipment for smaller runs may not be as optimized, further impacting the cost-effectiveness of cosmetic production.

To address these challenges and justify their efforts, cosmetic manufacturers often establish higher Minimum Order Quantities (MOQs). Setting higher MOQs allows cosmetic manufacturers to consolidate production, reduce changeover frequencies, and streamline processes, ultimately improving efficiency and profitability. While this approach aligns with the principles of economies of scale, it can present hurdles for beauty businesses with smaller-scale needs and newer beauty startups, as they may find it economically challenging to meet these minimum requirements.




Reason 3: Quality Control

Consistency and quality are an important aspect when it comes to cosmetic manufacturing or skincare manufacturing within the beauty industry, where brands often place a premium on reliable and uniform product experiences. To uphold this standard, manufacturers often opt for larger production runs as they provide an environment conducive to maintaining and monitoring consistent cosmetic formulation throughout the entire manufacturing process. In larger batches, cosmetic manufacturers can implement rigorous quality control measures more efficiently, ensuring that each unit meets the specified standards.

The advantages of larger production runs extend beyond quality control. Standardization becomes more achievable in terms of ingredient measurements, formulation ratios, and manufacturing protocols. This meticulous attention to detail is pivotal in creating products with consistent textures, scents, and efficacy, enhancing consumer trust and brand reputation. Moreover, the economies of scale associated with larger production runs allow for better control over variables such as temperature, humidity, and mixing times, contributing to a more controlled and predictable manufacturing environment, which is crucial to ensure high quality and consistent formulation. 

Consistency is not solely confined to the cosmetic product itself but also extends to packaging and presentation. Larger production runs facilitate uniformity in labeling, packaging design, and overall branding, creating a cohesive and recognizable image for the product on the market. This consistency enhances brand identity, making it easier for consumers to identify and connect with their preferred beauty products.

Navigating High MOQs with White/Private Labeling

One noteworthy approach to overcoming the high MOQ challenge is through white/private labeling. White/private label cosmetic products represent items manufactured by one company or one manufacturer and subsequently rebranded and distributed by other businesses. This innovative approach empowers Korean cosmetic manufacturers to maintain their high MOQ standards, enabling them to produce substantial product batches with consistent formulas. These products can then be divided into smaller quantities, ready to be embraced by multiple enterprises who will rebrand them as their own. The downside is that since these products are ready-made, they cannot be modified or customized. To view products available for white/private labeling, please view our catalog here. 

The Beauty Industry's Shifting Landscape

The beauty industry is in a constant state of evolution, driven by innovation, consumer demand, and a quest for perfection. In this landscape, flexibility and customization are key. MAYK, a data-based cosmetic and skincare manufacturing network platform based in Korea, is renowned for offering top-notch solutions tailored to meet the unique needs of beauty entrepreneurs, beauty startups, and established beauty brands alike.

MAYK prides itself on understanding the critical importance of flexibility and customization in the beauty industry. Whether you're embarking on a journey of private label cosmetics or require custom cosmetic formulation, MAYK’s expertise in contract manufacturing for beauty and cosmetic products guarantees your vision will become a reality.

One of the standout features of MAYK is their niche in customizable private label products. You can request to add one ingredient to the original formula to make your product stand out more in the market. For more details, please contact us, and let us know which private label product you'd like to customize.  

The K-beauty manufacturing platform at MAYK empowers you to create your own skincare brand that resonate with your target audience. With MAYK’s expert consultants by your side, you're afforded the freedom to experiment with various formulations and packaging, ensuring that your brand truly stands out.

Explore the endless possibilities with MAYK and embark on a journey into the world of Korean cosmetic manufacturing. Contact us now!