Dropshipping cosmetics: it seems so easy
With modern technology, it’s super easy to start your own webshop and sell products. Especially dropshipping, where a webshop only acts as a middle-man between the factory and the consumer is booming.
But it’s also become much easier to do sourcing of raw materials and product intermediaries outside the EU and turn them into your own products for a profit. So it’s obvious that this also applies to cosmetics.
This a good trend, because this enables more and more entrepreneurs to build their own brands and create an impact on the world
The dark side of the dropshipping model
Unfortunately, many entrepreneurs with a cosmetics brand need to deal with the shadow side of dropshipping.
In this story, we’ll highlight these negative consequences, to ensure that entrepreneurs and business owners improve their decision-making on this.
As cosmetics safety assessors, we receive many requests to check cosmetic products, from various types of companies. Lately, we’re seeing a remarkable trend in this, which is also the reason for writing this piece of content. This trend mostly applies to one specific type of company, which entails:
Passionate entrepreneurs (often influencers) with their own cosmetics brand, promoting their cosmetic products through social media (influencer-based marketing).
So far, no surprises there. But many of these companies that were calling us were checked by the NVWA, which are the Dutch authorities responsible for cosmetics safety.
All of these businesses didn’t have the correct paperwork. A few of them – and this is something that we hate to hear – only heard about the existence of cosmetics compliance when they were checked by the authorities.
They were required, by the authorities, to fix their paperwork. Which was why they called us.
Trying to comply with the cosmetics safety law
To ensure that their products complied with the law, all of their products needed a safety assessment, allowing the entrepreneurs to prove to the authorities that their products were indeed safe for consumers.
A safety assessment starts with the product formulation, the recipe containing all ingredients, and after that checking each individual raw material in the product.
The factory manufactures the product, so they obviously know best about the product formulation and their raw materials.
What was immediately striking to us, was that a lot of these entrepreneurs sourced their products from the same manufacturer, a factory somewhere in the USA.
Easy-peasy, we thought, since we only have to ask one company for all information.
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Webshops shut down due to cosmetics from non-EU manufacturer
When we contacted this factory, we ran into a huge problem; the manufacturer wasn’t willing to share this information since it was sensitive information.
We acknowledge this too, because the product formulation is literally the recipe of a cosmetic product, so you don’t want to let this get into the wrong hands.
But it should be shared with a safety assessor because this information is a critical part of the safety assessment. Without a complete safety assessment, a product cannot be sold in the EU.
Together with this group of entrepreneurs, we’ve tried everything to obtain this information from the factory. But the factory stood its ground and refused to share this information at the time.
For the entrepreneurs who sourced their products from this manufacturer, this was the worst-case scenario; cosmetics with a positive and complete dossier are prohibited to be sold in the EU.
Since they didn’t have a complete safety assessment, these companies had to close their webshop immediately.
Because the manufacturer was established outside of the EU, and with a completely different cosmetics law in the USA, it was impossible to push this issue back to the manufacturer.
It’s the entrepreneur’s worst nightmare.
Cosmetics were safe, but authorities gave high fees
After a lot (A LOT) of back-and-forth communication, the manufacturer eventually did share (directly with us) the information we needed to assess the safety of products.
All of the products we checked were (luckily) safe because otherwise, the entrepreneurs would have had to do a public recall to remove the non-compliant products from the market, including all of the costs and potential damage to their brand image.
Since they couldn’t prove the safety of their products during the first check, the companies did receive high fees by the authorities, because these products were put on the market without a PIF dossier.
Similar risky situations with cosmetics safety
And these types of terrible situations happen often and in many ways. When Alibaba and AliExpress were started a few years ago, we saw the same story happening with Chinese factories that couldn’t provide information to dropshipping companies.
With all the consequences for brand owners who import their products through these channels and often also have built up a large brand.
But also the other major platforms cause these issues, where cosmetics produced by a non-EU manufacturer are sold to brand owners and importers in the EU.
And though the latter companies are legally obliged to ensure that their products comply with the EU law, sometimes they aren’t aware or don’t take the time to obtain the right information.
Example: raw material suppliers causing trouble
We recently experienced a similar story with a brand owner who had just developed a cosmetic product and wanted to launch it on the market soon.
This company was well aware of EU cosmetics legislation and called us well ahead of schedule to make the safety assessment.
The brand owner produced the product himself, buying raw materials from all kinds of parties. One of these parties was a raw material supplier outside Europe.
Yes, this story is also heading that way… the raw material supplier could not provide all the necessary information for the safety assessment.
As a result, the brand holder had to replace this raw material with a different raw material from another supplier.
So that was a reformulation, in which part of the stability tests and challenge tests also had to be redone. These tests take a few months so that the shelf life of the product can be properly determined.
Due to that, the product launch suddenly had to be moved by six months, which was really painful for this company.
6 tips for safely dropshipping cosmetics
Doing business is also about helping each other. That’s why we’ve written down a few super quick tips for anyone starting their own cosmetics company. Are you already selling cosmetics? Then this is a really good checklist of course 😉
1. There is a cosmetics law
Cosmetics must comply with this specific cosmetics legislation. There is specific cosmetics legislation for dropshipping, importing, and selling cosmetics in the Netherlands and in the EU. Make sure that the products you sell comply with this law in advance. Even if you sell products via a webshop or through social media.
2. As an importer or brand holder you are (held) responsible
Companies outside the EU often do not know EU legislation well, or have nothing to do with it at all. As an importer (even with dropshipping), you are responsible for ensuring that the products comply with cosmetics legislation.
2. Communication is key
Make sure you work with a party that wants to share all information about the product so that a good safety assessment of the product is made.
3. Start on time
Collecting all mandatory information really takes a lot of time, and you often depend on several parties. We can’t repeat it often enough: Start on time.
4. Engage all relevant parties in good time
Fixing a mistake afterwards can cause a product launch to be delayed by months. So, for example, make sure that a safety assessor monitors the purchase of raw materials from the start so that no wrong raw materials are purchased. Or to prevent that a safety assessment must be done “the day before” the launch of the product. Or only when the NVWA starts checking the product.
If it goes wrong, make sure it goes wrong correctly
Even if your product safety has already been arranged, still assume the worst-case scenario. So get legal advice in time and get good insurance, etc., so that the damage is limited. #SafetyFirst, also for entrepreneurs.
Was this story recognizable to you? Feel free to share your experience too!