Starting a lip gloss business is a rewarding venture where your creativity and passion for beauty meet business savvy. The global lip care market is a multi-billion dollar industry, and there's consistent demand for products that offer everything from a subtle daily shine to a bold color for a night out.
This guide will take you through the practical steps of developing your unique brand, sourcing quality ingredients, navigating licenses, and marketing your products to help you launch a successful lipgloss business in the U.S.
Step 1: Plan your business and validate your idea
Begin your market research on platforms where your audience lives. Spend a few hours on TikTok and Instagram searching hashtags like #lipglossbusiness and #smallbatchbeauty. Note the trending colors, packaging styles, and application types that get the most engagement.
Next, analyze your potential competitors. Look beyond major brands and study successful small businesses on Etsy and Shopify. For broader market data, your local library may offer free access to databases like Mintel, which provide detailed consumer reports on the cosmetics industry.
Estimate your startup costs
Your initial investment can range from $600 to over $2,000. A common misstep is to forget the cost of experimentation. You should set aside about 15% of your materials budget for test batches to perfect your formula before you launch.
A basic cost breakdown looks like this: initial ingredients and supplies ($300-$700), business registration and permits ($100-$500), and a simple website with branding ($200-$600). An e-commerce platform like Shopify has plans that start around $30 per month.
Here are 3 immediate steps to take:
- Identify five competitor brands on Etsy or Instagram and document their pricing and packaging.
- Use Google Trends to check the popularity of niches like "vegan lip gloss" versus "plumping lip gloss."
- Draft a startup budget with low and high estimates for your initial inventory and legal fees.
Step 2: Set up your legal structure and get licensed
Choose your business structure
You might want to consider forming a Limited Liability Company (LLC). This structure protects your personal assets, like your home or car, if your business faces legal issues by creating a legal separation between you and the company.
An LLC also offers pass-through taxation, meaning profits are reported on your personal tax return. This setup avoids the double taxation that corporations face and simplifies your accounting. Filing for an LLC can cost between $50 and $500, depending on your state.
Navigate cosmetic regulations and permits
The U.S. Food and Drug Administration (FDA) regulates cosmetics, but it does not issue licenses or pre-approve products. Your responsibility is to ensure your lip gloss is safe and properly labeled according to the Federal Food, Drug, and Cosmetic Act (FD&C Act).
A frequent misstep is incorrect labeling. You must list ingredients in descending order of predominance and avoid making medical claims, such as stating your product "heals" or "cures" chapped lips. Stick to cosmetic claims like "moisturizes" or "softens."
At the state level, you will need a seller's permit to collect sales tax. You will also need a general business license from your city or county, which typically costs $50 to $100 annually. Processing for these permits usually takes a few weeks.
Here are 3 immediate steps to take:
- Visit your state's Secretary of State website to research LLC filing fees and requirements.
- Review the FDA's online Cosmetic Labeling Guide to understand ingredient and claim rules.
- Contact your local city or county clerk's office about obtaining a general business license.
Step 3: Secure your business insurance
Understand your insurance needs
You will want to get product liability insurance. This is often included in a General Liability policy and protects you if a customer has an allergic reaction or other issue from your lip gloss. A frequent mistake is to assume your homeowner's policy offers coverage, but it almost never does for business activities.
For a small, home-based operation, a policy with a $1 million liability limit is a standard starting point. Depending on your sales volume and state, you can expect annual premiums to range from $400 to $900. This investment protects your personal assets from business-related claims.
Find the right provider
Now that we have covered the basics, let's talk about where to get your policy. You should seek quotes from insurers that specialize in e-commerce or small businesses. Providers like Hiscox, Next Insurance, and The Hartford understand the risks associated with cosmetic products and online sales.
Here are 3 immediate steps to take:
- Request online quotes for a $1 million general liability policy from Hiscox and Next Insurance.
- Review your current homeowner's or renter's insurance policy to confirm its business activity exclusions.
- Ask potential insurers if their product liability coverage specifically includes cosmetics.
Step 4: Set up your workspace and source equipment
Designate your production space
You can start your lip gloss business from home. You will want to set aside a dedicated area of at least 50 square feet, like a desk or a small table, used only for production. This separation from your kitchen is vital to prevent cross-contamination and ensure product safety.
Gather your production equipment
You should invest in dedicated supplies instead of using kitchen utensils. A starter kit might cost between $75 and $150. Your initial setup should include a digital scale with 0.01g accuracy ($20-$40), glass or stainless steel mixing bowls, and disposable pipettes for precise measurements.
For filling tubes, a 60ml syringe makes the process clean and efficient. You can find these supplies on websites like TKB Trading or Amazon. Many new owners make the mistake of eyeballing measurements, which leads to inconsistent batches. Always measure your ingredients by weight for a uniform product.
Find your ingredient and packaging suppliers
Suppliers like MakingCosmetics.com and Bramble Berry cater to small businesses and have low or no minimum order quantities. You can buy a gallon of Versagel, a popular lip gloss base, for around $60, which is enough for hundreds of tubes. This is more cost-effective than smaller quantities.
When it comes to packaging, you can source tubes and wands from U.S.-based suppliers on Etsy for faster shipping or look to Alibaba for bulk orders. Expect to pay between $0.50 and $1.50 per tube, with prices dropping as your order volume increases.
Here are 3 immediate steps to take:
- Clear and sanitize a dedicated 50-square-foot workspace in your home.
- Create a shopping cart on TKB Trading with a digital scale, pipettes, and a starter set of pigments.
- Compare the per-ounce cost of a 16 oz container versus a gallon of Versagel on MakingCosmetics.com.
Step 5: Set up your payment processing
For your online store, your e-commerce platform will have built-in payment options. Shopify Payments, for example, is integrated directly. Most processors charge a fee around 2.9% + $0.30 per transaction for online sales, which you should factor into your pricing from day one.
A frequent oversight is forgetting these fees. While a few cents per sale seems minor, it can significantly reduce your profit over time. Make sure your retail price accounts for both your material costs and these processing fees to maintain a healthy margin.
Once you are ready for in-person sales at markets or pop-ups, you will need a way to take payments on the go. For a lip gloss business that needs to accept payments anywhere, JIM offers a streamlined solution.
With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. At just 1.99% per transaction with no hidden costs or extra hardware, it is useful for selling at craft fairs. Many other solutions charge between 2.5% and 3.5%.
Getting started is straightforward:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available on your JIM card as soon as the sale is done, with no wait for bank transfers.
Here are 3 immediate steps to take:
- Calculate how a 2.9% + $0.30 transaction fee impacts the profit margin on your main lip gloss product.
- Review the payment options offered by your e-commerce platform to understand its fee structure.
- If you plan to sell at local markets, download the JIM app to see how it works.
Step 6: Fund your business and manage finances
Secure your startup funding
You might want to explore an SBA Microloan. These loans range from $500 to $50,000 and are designed for new businesses. Lenders often look for a solid business plan and a personal credit score above 620. Interest rates usually fall between 8% and 13%.
Also, look into grants, which you do not have to repay. The Amber Grant for Women awards $10,000 monthly to a female entrepreneur. Many new owners make the mistake of only pursuing loans, but grants can provide a debt-free boost to your budget.
Manage your working capital
With funding in mind, you need to plan your working capital. This is the cash on hand to run your business day-to-day. For the first six months, aim to have between $1,500 and $3,000 set aside. This amount covers inventory, marketing, and unexpected fees.
This buffer ensures you can operate smoothly before your sales build momentum. It prevents the stress of running out of money for supplies or a small marketing campaign just as your business starts to grow. A simple spreadsheet can help you track these expenses.
Here are 3 immediate steps to take:
- Research SBA Microloan lenders in your state through the SBA's website.
- Review the application requirements for the Amber Grant for Women.
- Create a spreadsheet to calculate your working capital needs for the first six months.
Step 7: Build your team and streamline operations
Know when to hire your first employee
In the beginning, you will handle everything from production to shipping. This hands-on experience is valuable. You learn every detail of your business before you delegate tasks to someone else, which ensures you can train effectively later on.
Consider your first hire once you consistently hit $3,000 to $5,000 in monthly revenue. A part-time Production Assistant is a good first step. They can take over repetitive tasks like mixing batches and packing orders, which frees up your time for marketing.
You can expect to offer an hourly wage between $15 and $20. Many new owners make the mistake of hiring too soon, which can strain cash flow. Wait until your sales can comfortably support the added payroll expense before you post a job opening.
Set up your operational systems
Before you bring anyone on board, document your processes. Create simple, step-by-step guides for everything from making your signature gloss to how you package an order. These Standard Operating Procedures (SOPs) ensure your product quality remains consistent no matter who does the work.
For a small operation, you can skip expensive management software. A shared Google Calendar is perfect for scheduling a part-time employee. Your e-commerce platform, like Shopify, already includes inventory and order management features that are sufficient for your early growth stages.
Here are 3 immediate steps to take:
- Draft a job description for a part-time Production Assistant.
- Write down the exact recipe and process for your best-selling lip gloss.
- Review the inventory tracking features on your e-commerce platform's dashboard.
Step 8: Market your business and acquire customers
Focus on social media content
Your main marketing channels will be TikTok and Instagram. Aim to post 3-5 times a week. Create videos that show your process, like mixing colors or packing orders. These behind-the-scenes clips build trust and are highly engaging for your audience.
Many new owners use poor lighting, which makes products look unprofessional. You do not need expensive gear. Simply film near a window for bright, natural light. Also, make sure to respond to every comment and direct message to build a loyal community.
Collaborate with influencers and use paid ads
Once you have some content, you can reach out to micro-influencers with 10,000 to 50,000 followers. They often have high engagement and may promote your product for free or for a fee of $50 to $250. This is a cost-effective way to get your gloss in front of a new audience.
You can also experiment with paid ads. Start with a small budget, like $10 a day on Instagram Story ads, to see what resonates. Track your Customer Acquisition Cost (CAC). If you spend $100 on ads and get 10 customers, your CAC is $10. Aim for a CAC that is less than your product's profit margin.
Here are 3 immediate steps to take:
- Identify five micro-influencers on TikTok whose followers match your target audience.
- Plan one week of social media content, including at least one video of your production process.
- Calculate the maximum CAC you can afford based on your best-selling lip gloss's profit margin.
Step 9: Price your products for profit
Calculate your cost and set your markup
First, calculate your Cost of Goods Sold (COGS) for a single tube. Add up the price of the tube, wand, gloss base, pigments, and label. A frequent misstep is to forget small costs. Your COGS for one unit might be around $1.25 to $2.00.
With your COGS figured out, you can set your price. A standard markup in cosmetics is 4x to 8x your cost. If your COGS is $1.50, a 6x markup would result in a retail price of $9. This strategy aims for a gross profit margin of 70-80%.
Analyze the market
Now, check your calculated price against the market. Look at five other indie lip gloss brands on Etsy or Instagram that have a similar style to yours. If they successfully sell their gloss for $12-$15, a $9 price might make your product seem low-quality instead of a bargain.
You can also offer bundles to increase your average order value. For example, you could sell a single gloss for $12 but offer a curated set of three for $30. This encourages customers to spend more while they feel like they are getting a deal.
Here are 3 immediate steps to take:
- Calculate the total COGS for one finished lip gloss, including the tube and label.
- Find three direct competitors on Etsy and note their prices for a single gloss and for bundles.
- Use your cost and competitor prices to set a starting price for your main product.
Step 10: Control your quality and scale production
Establish your quality standards
To ensure every tube is perfect, create a "gold standard" sample for each of your products. Use this master sample to visually compare the color and consistency of every new batch. You should also document your recipe and process with exact weights and temperatures.
Many new owners forget to keep detailed batch records. For each batch, you should log the date, ingredient lot numbers, and final quantity produced. This practice is part of Good Manufacturing Practices (GMP) and is invaluable if you ever need to trace an issue.
Plan your production growth
Once you consistently sell 200-300 units per month, your 60ml syringe will slow you down. This is the time to invest in a semi-automatic tube filling machine, which can cost between $500 and $1,500. This purchase can increase your output tenfold.
As your order volume grows past 500 units a month, your e-commerce platform's basic inventory tools may not be enough. You might explore dedicated inventory management apps like Katana or Cin7 Core from the Shopify App Store to track supplies and forecast needs.
Here are 3 immediate steps to take:
- Create a batch log sheet to record ingredient weights and lot numbers.
- Research the cost of a semi-automatic tube filler for when you hit 200 orders per month.
- Review inventory management apps like Katana on the Shopify App Store.
Your lip gloss business is about more than just mixing colors. Your unique story and brand are what truly connect with customers. Remember that consistency in your product and message builds trust. You have the roadmap, now go bring your vision to life.
As you grow and sell in person, a simple way to get paid helps. JIM turns your phone into a card reader for a flat 1.99% fee, with no extra hardware. Your journey starts now. Download JIM.
