Natural cosmetics brands sell skincare, body care, lip care, hair care and makeup made with plant-based or naturally derived ingredients. Many start small, mixing batches in a licensed kitchen or small facility and selling online and at markets, then grow by working with a contract manufacturer and selling wholesale to shops and spas.
Cosmetics in the US are regulated by the FDA, and the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) added new requirements for facility registration, product listing, safety and adverse event reporting, with some exemptions for small businesses. Claims matter just as much: a product that claims to treat a condition is regulated as a drug, and the word “natural” has no FDA definition.
A natural cosmetics brand at a glance
Table of Contents
| Topic | What to expect |
|---|---|
| Startup cost | Low to moderate: formulation, ingredients, packaging, testing, insurance, branding and a website |
| Key rules | FDA cosmetic rules and MoCRA, ingredient labeling, cosmetic versus drug claims, organic claims and state ingredient bans |
| Revenue model | Direct sales online and at markets, wholesale to retailers and subscriptions |
| How you earn | Product margins, which are often high on direct sales and lower on wholesale |
| Best for | Careful makers who enjoy product development, branding and meticulous records |
Who a cosmetics brand suits
It suits people who love product development and branding and are comfortable with chemistry, testing and detailed records. Formulation is only the start: you’ll also manage suppliers, packaging, labeling rules, marketing and customer service. A clear niche, such as sensitive skin, a specific ingredient, men’s grooming or refillable packaging, helps a new brand stand out.
Developing safe, stable products
Water-based products such as lotions and creams need an effective preservative system, because bacteria and mold can grow quickly; a preservative efficacy (challenge) test shows whether your formula resists contamination. Stability testing checks that products keep their texture, scent and color over time and temperature. Many founders work with a cosmetic chemist or a contract manufacturer that handles formulation, testing and production.
Follow good manufacturing practices: clean equipment, measured batches, batch numbers on every product and records of ingredients and suppliers. The FDA is developing good manufacturing practice regulations under MoCRA, so keep your processes documented.
MoCRA requirements
- Facility registration with the FDA for facilities that make or process cosmetics.
- Product listing of each cosmetic and its ingredients.
- Safety substantiation: records showing your products are safe to use.
- Adverse event reporting: serious adverse events must be reported to the FDA within 15 business days, and records kept.
- A US address or contact on the label for adverse event reports.
Small businesses with average gross annual cosmetics sales under $1 million over the past three years are exempt from registration and listing (and from future GMP rules), unless they make certain products such as those that touch the eye, are injected, are meant for internal use or alter appearance for more than 24 hours. Safety, adverse event reporting and labeling still apply.
Cosmetic or drug?
A product’s intended use decides how it’s regulated. Claims to clean, moisturize, beautify or improve appearance are cosmetic claims. Claims to treat or prevent disease or change the body’s structure, such as acne treatment, sunscreen (SPF), anti-dandruff, eczema relief or hair regrowth, make it a drug, which must follow FDA over-the-counter drug rules. Watch claims on your website and social media as well as on labels.
Labeling
Cosmetic labels must show the product identity, net contents, an ingredient list in descending order of predominance using standard names, the name and place of business of the maker or distributor, and any required warnings. Under MoCRA, labels also need contact information for adverse event reports. The FDA’s cosmetics labeling guide explains layout and type size. Use only approved color additives for their approved uses.
Natural and organic claims
The FDA hasn’t defined “natural”, so make sure the claim is accurate and not misleading; the FTC can act against deceptive marketing. Organic is different: if you claim products are USDA organic or use the USDA organic seal, the agricultural ingredients and product must be certified under the USDA National Organic Program. You can list certified organic ingredients in the ingredient list without certifying the whole product.
State ingredient rules
Several states ban certain ingredients in cosmetics. California’s Toxic-Free Cosmetics Act bans more than 20 ingredients, including some formaldehyde releasers and certain PFAS, and other states have passed bans on PFAS in cosmetics. If you sell nationally, follow the strictest rules or check each state where you sell. Fragrance allergen disclosure is also required in some places, and the FDA is working on rules for fragrance allergen labeling.
Packaging and pricing
Choose packaging that protects the product (airless pumps for sensitive formulas), suits your brand and fits shipping. Price with room for wholesale: retailers usually expect to buy at about half of your retail price, so your product cost needs to leave margin at wholesale. Use our pricing calculator.
Startup costs for a natural cosmetics brand
| Item | What to budget for |
|---|---|
| Formulation | Chemist fees or contract manufacturer development |
| Testing | Challenge and stability testing |
| First production run | Ingredients or minimum order quantities |
| Packaging and labels | Containers, boxes and printing |
| Insurance | Product liability insurance |
| Branding and website | Design, photos and online store |
Use our startup cost calculator for your total.
A worked example: a small skincare brand
These are illustrative assumptions for a small skincare brand with a contract manufacturer, not predictions.
| Assumption | Monthly | |
|---|---|---|
| Online direct sales | 900 orders averaging $38 | $34,200 |
| Wholesale to shops and spas | $6,800 | |
| Revenue | $41,000 | |
| Product cost and packaging | About 26% of online direct sales | $(8,892) |
| Wholesale product cost | $(2,900) | |
| Shipping and fulfillment | $(5,600) | |
| Online ads and marketing | $(6,200) | |
| Platform, payment and app fees | $(1,700) | |
| Part-time staff | With payroll costs | $(2,400) |
| Insurance, testing and compliance | $(700) | |
| Profit before owner pay and taxes | $12,608 |
That leaves about $12,608 a month before the owner’s pay and taxes, on about $41,000 of revenue. Advertising and shipping costs often decide whether a direct-to-consumer brand is profitable.
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Working with a contract manufacturer
A contract manufacturer (or private-label maker) can develop formulas, run testing and produce batches at scale. Ask about minimum order quantities, development fees, who owns the formula, lead times, quality testing, certifications and whether they handle MoCRA registration for their facility. Get samples, visit if you can and sign a written agreement that covers formula ownership, confidentiality and what happens if a batch fails.
Selling online and wholesale
Start with your own online store and marketplaces, then add wholesale to boutiques, spas and salons. Wholesale buyers want line sheets, minimum order quantities, consistent supply and marketing materials. Subscriptions for products customers reorder, such as cleansers, add predictable revenue, but follow auto-renewal rules.
Marketing
- Ingredient stories and transparent sourcing.
- Samples at markets and in orders.
- Reviews from real customers, never fake ones.
- Influencer partnerships with clear disclosures under FTC rules.
- Retail partnerships with local shops and spas.
Customer service and returns
Publish a clear returns policy, answer questions about ingredients quickly and take every complaint about irritation seriously. Record each report with the product and batch number, decide whether it’s a serious adverse event that must be reported to the FDA and look for patterns across batches.
Common mistakes to avoid when starting a natural cosmetics brand
- Making drug claims such as treating acne or eczema.
- Skipping preservative and stability testing.
- Using the USDA organic seal without certification.
- Labels missing the ingredient list or contact details.
- Pricing too low to sell wholesale.
Your first 90 days as a natural cosmetics brand owner
- Days 1-30: choose your niche, develop formulas and find a chemist or manufacturer.
- Days 31-60: test products, design compliant labels and get insurance.
- Days 61-90: produce your first run, launch online and approach local retailers.
Frequently asked questions about starting a natural cosmetics brand
Do I need FDA approval to sell cosmetics?
No; cosmetics don’t need FDA approval before sale, but they must be safe, properly labeled and follow MoCRA requirements.
What is MoCRA?
The Modernization of Cosmetics Regulation Act of 2022, which added registration, listing, safety, adverse event and labeling requirements.
Are small brands exempt from MoCRA?
Brands with average sales under $1 million are exempt from registration and listing for most products, but safety, adverse event and labeling rules still apply.
Can I call my products natural?
The FDA hasn’t defined natural, so the claim must be truthful and not misleading.
Can I use the USDA organic seal?
Only if the product is certified under the USDA National Organic Program.
Is a moisturizer with SPF a cosmetic?
No; sunscreen claims make it an over-the-counter drug.
Do I need product liability insurance?
Yes; most retailers require it, and it protects you if a customer has a reaction.
Can I make cosmetics at home?
Small makers often start at home or in shared spaces, but follow good manufacturing practices and check local rules.
Who owns the formula if a manufacturer develops it?
It depends on your agreement, so put formula ownership in writing before development starts.
Keep learning
- Cosmetics and skincare industry data
- How to start a soap making business
- How to start a private label products business
- Pricing calculator
Sources
- FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA)
- FDA, Cosmetics labeling guide
- FDA, Is it a cosmetic, a drug, or both?
- FDA, Color additives permitted for use in cosmetics
- USDA Agricultural Marketing Service, Organic certification
- FTC, Endorsement Guides and testimonials
Last reviewed November 4, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
