Maximize your spa’s profitability by offering your own proprietary skincare line.
It happens all too often: After working serious service magic, an esthetician lovingly curates an at-home regimen, only to watch as the client takes all of that expert advice and starts tapping away on her phone. The practice of examining products in a store only to later seek the lowest price online is called “showrooming,” and it’s been going on since the dawn of e-commerce, says Amy Gill, marketing manager of Ready Care Industries.
So how can a spa end that cycle? By selling products under its own private label, of course. According to Gill, not only does private label grant your spa pricing control and exclusivity (i.e., items that can’t be found or sold elsewhere) but it also extends your brand. “Guests are reminded of your spa every time they use your branded retail item, making them more likely to return,” she notes.
But it’s not enough to just slap your logo on some pretty bottles. Success requires marketing savvy, retail savoir-faire and plenty of old-fashioned R&D. To find out more about the art and science of private label products, we checked in with veteran manufacturers, who offered their best advice and strategies for success.
The Benefits of Proprietary Potions
The ability to control your brand by using and selling an exclusive product line formulated with your signature scents and flourishes can be an indisputable asset, but it’s also a major responsibility. That initial launch typically runs about $3,000 to $5,000 (for products, design and marketing). But what makes it invaluable is that you’re getting something the customer can’t compare to anything else—because it doesn’t exist anywhere else, points out Aleks Vranicic, VP of sales for Vitelle Dermatology Labs. “Plus, private label pricing models allow for lower wholesale costs, which lets owners offer staff higher sales commissions and get creative with promotions,” he says. Ultimately, though, spas will notice an increase in revenue, notes Lauri Smetona, CEO of RevealU Skincare. “They can now offer products at a price point lower than competitive brands, making for healthier profit margins,” she explains.
Using and selling proprietary skin care will help cultivate your spa’s overall identity, as well. “With private label, you can provide unique experiences that customers can only find at your spa, which improves the company brand,” says Smetona. Adds Karen Short, CEO of Universal Companies: “You can target specific demographics, and capitalize on trends like clean and vegan skin care.” In fact, private labeling can even boost your credibility and reputation as a skincare expert. “It allows the business to have its name associated with exceptional products,” says Laurie Nicoll Nord, president and CEO of Luxury Wellness International, parent company to Stemulation.
Nord adds that private label lines give spas the potential to make online purchasing easier for guests than shopping on Amazon. “Simply link your social media platforms to ‘buy now’ options for your products, and you’ve added a revenue stream that you likely wouldn’t have with most brands,” she says.
A Special Order
You do want to be selective when choosing a private label partner, not only to be certain that their offerings are in line with your treatment protocols and clientele, but also to ensure that their minimum order quantities suit your business. Once you’ve landed on a partner, you have to decide whether to go with a full regimen or a few signature items.
That “magic number” depends greatly on your budget, but Rachel Hutson, sales coordinator for NF Skin, points out that people may prefer fewer options—ideally a bundle of items that work well together and that your team can be passionate about. “The more specific the SKUs you have, the more likely it is that a client will purchase that package deal, rather than one or two items,” she says. Additionally, Short notes that certain impulse buys are usually popular. “Products like lip balms and body/hand lotions have always been private label staples,” she says.
When choosing between offering a few specific products/protocols versus an entire line or regimen, it’s also important to consider the level of activity and foot traffic in your spa, according to Nord. “If you’re a smaller operation, you’ll get the biggest bang for your buck with a handful of key treatment serums,” she says. “This gives you the advantage of offering exclusive and effective products without the financial weight of excessive inventory.” At the same time, client needs are a major factor. Vranicic reveals that full private label collections often thrive at smaller day spas and medspas, particularly those that are well versed in addressing very specific skin types/conditions.
Spas interested in private labeling body care ought to come up with a few different formulations, so that the products appeal to as many guests as possible. Gill recommends providing three aromas that target different preferences. “Offer a fresh, a floral and a tropical scent, or something that represents your location,” she advises. “Add branded candles, lip balms and body brushes to complete body care offerings.”
Appealing design is a key driver of sales. However, just as you wouldn’t go to an accountant for a car tune-up, you must be mindful of what’s in your wheelhouse—remember that most private label companies employ in-house graphic designers. “People today are drawn to really simple, ecological packaging,” opines Hutson. “It should be as sustainable as the ingredients clients are putting on their faces and bodies.” Vranicic agrees that less is more when it comes to product design. “We get people wanting shells, beaches, suns and moons to symbolize all the various facets of their spa, but in the end, clean and simple packaging performs best,” he says.
Once your products are sitting pretty on your shelves, you’re ready to introduce them to guests. Vranicic suggests bundling new items with popular services, which will also “deepen clients’ relationships with practitioners,” he notes. If your branded skin care is already well established among your clientele, consider promotions like gift offers or BOGO deals. “These are great ways for guests to try new products, as well as build trust and loyalty; they feel that they’re receiving value and good pricing,” says Nord.
Another way you can ensure clients see your private label line is by prominently displaying it in locker rooms and lounges, packaging items as group gifts, and providing testers and explanatory table cards in your retail area, says Gill. “Be bold when featuring your brand! Choose complementary packaging and place products in high-volume areas, in addition to point-of-purchase spots near the register,” she advises, noting that product bundles can also be used as incentives to book treatments—especially ones that incorporate your own line.
Remember that word of mouth is crucial: At-home upkeep (via your proprietary skin care) will help them retain results that potential clientele will notice. “These customers are now walking testimonies and advertisements for your spa, especially to their friends and family,” points out Smetona.
As mentioned, creating your own formula can be a costly endeavor, with potentially long lead times and high-volume minimums. It can feel overwhelming, so take advantage of companies’ in-house graphic design teams, formulation consultations, staff trainings and anything else they may offer in order to streamline the process. “Having experts on your side will cut your lead times, costs and minimums, which will allow you to launch your brand in a timely, effective manner,” says Gill.
Finally, make sure spa-goers associate your brand with luxury by following the golden rule of private label: “Never refer to it as private label in front of clients,” warns Vranicic. “The term seems to be synonymous with lower-quality, generic products, even though a lot of big-name industry brands actually started out as private label.” So stick to your spa’s brand name, and get your staff on board; make sure everyone understands the private label learning curve—that you’re working with a manufacturer rather than a distributor or vendor. “Look at it this way: If you’re selling someone else’s brand, you’re growing their company,” says Vranicic. “When you sell your products, you’re growing your own.”
This story first appeared in the August issue of DAYSPA Magazine. To receive the magazine, click here to subscribe