You probably don’t think about the types of companies that make your cosmetics and beauty products but if you did, you might make different choices in the products you buy.
Big and Small companies
The majority of beauty products you can buy at supermarkets & department stores are made by big companies like P&G, Colgate-Palmolive, L’Oreal, Unilever, etc. If you’re curious, here is a list of the Top 50 Us companies and this list of the Top 30 International companies. But most of the unique beauty products you can buy on the Internet or in specialty shops are produced by small companies, often mom n pop shops started by an enterprising marketer, chemist, or other person interested in the cosmetic business. So, you might wonder, what’s the difference?
How are the products different?
There are many differences between the products produced by big companies and those made by small ones. Here is a list of 6 key characteristics of a beauty product and how big companies stack up against small ones.
Cosmetic Technology
Big companies have lots of money to spend on research and development. They hire the most scientists, pay the highest salaries, and consequently get the best people. This doesn’t automatically translate into superior products but it’s a good bet that they will be. Big companies also are given special privileges by raw material suppliers, so they can also get exclusive use of the best technologies available.
Small companies usually don’t have much money to develop their products so they end up using generic formulas made by their contract manufacturer. This is the company that actually makes the batches of products for them.
When it comes to the technology of your beauty products, small companies have a hard time competing.
Product Testing
Big companies spend more money on testing their products. There are two main reasons for this. First, they want to protect themselves from lawsuits. If they have testing to back up their claims, it’s much harder to sue. Second, they want to give themselves a competitive advantage over other products. In the beauty biz, it’s difficult to differentiate your product from a competitor. Testing can help reveal differences.
Small companies can typically afford to do only the bare minimum of testing required.
More testing doesn’t automatically mean better but it certainly doesn’t hurt.
Quality
Big companies have large staffs of people dedicated to testing the raw materials and finished products of everything they make. Small companies have one or two cosmetic chemists who have to test everything.
Safety
Big companies are sensitive to lawsuits and will be extra careful to ensure that their products do not cause someone to sue them. They are also more likely to get fined by governments for not complying to regulations so they are ultra cautious.
Being cautious is a disadvantage for small companies because it interferes with their ability to come out with unique products. Some also might be more likely to use lower quality raw materials because they can get it for a lower cost. This doesn’t apply to all small companies and most of their products are perfectly safe.
Products from big companies are more likely to be safer.
Cost
The more of a product you buy, the less money it costs. Big companies buy lots of raw materials so they get them for a much lower price. This is why they can charge less for their products. If a small company tries to sell a lower cost product, they will eventually run out of money & go out of business. It is not a good strategy. This doesn’t mean every product from big companies are reasonably priced (P&G tried to sell Physique for $12 a bottle when it didn’t cost more than Pantene to make). But for the most part, lower cost, better value will be found from big companies.
Advertising
This is where big companies spent the bulk of their money. TV commercials are not cheap. Of course, advertising doesn’t make the products better so this is actually a disadvantage for big companies. However, small companies do advertise, it’s just usually on the Internet. Unfortunately, the Internet is not regulated like mass media so anyone can pretty much claim whatever they like on the Internet. (e.g. the advertising is less believable). You are just more likely to be misled by the advertising of a small company than a big one.
Having said that, big companies can also be misleading in their advertising.
Uniqueness
Big companies formulate products for the maximum number of people they can. This means they won’t come out with special products for special problems. This is where small companies can thrive and shine. They don’t need to satisfy shareholders and have record sales and profits every quarter. They can make a living selling to a small select group of consumers and have a thriving business. If you have a unique problem (e.g. you want gluten free beauty products), you’re more likely to find a solution from a small company.
Beauty Brains bottom line
So who’s product should you be buying?
If you are most concerned with getting the safest, highest quality products with the newest and best-tested technology, you should buy your products from big companies
If you are interested in finding unique solutions for your particular beauty problems, aren’t as concerned about cost, and are willing to risk some quality issues, you should look to small companies for your beauty products.
Would you rather buy your products from small or big cosmetic companies? Does it matter to you? Leave a comment below.