The challenges posed by minimum order quantities (MOQ) are among the foremost concerns for small and medium-sized enterprises (SME) in the finished beauty product sector, according to a report published by the organiser of the in-cosmetics Global trade show.
‘Unlocking Potential: Meet the SMEs Driving Innovation in Cosmetics’, published by RX Global, explores the impact and influence that SMEs are having on a market segment set to generate $646.2 billion this year.
The report sheds light on the financial and environmental repercussions of SME cosmetic companies being compelled to order larger quantities of ingredients than necessary.
“From my point of view, the main challenge is regarding MOQs and end dates,” said Elsa Pomès, co-founder of Paris, France-based finished products maker Atelier Populaire.
“As an SME, for some ingredients we don’t need big quantities, and suppliers do not always propose small quantities. When they do, usually the price is far higher,” she added.
“Sometimes, when we don’t have any other choice than to buy a big quantity, we are limited with the end date of the raw material and have to throw away the ingredient.”
Despite these hurdles, others quoted in the report pointed towards a glimmer of hope regarding MOQs.
“The manufacturing landscape has changed significantly in the last six years in favour of the SME,” said Emma Thornton, founder and owner at British brand TRUE Skincare.
“Those that originally required an MOQ of 5,000 units are now offering more flexible solutions to allow smaller businesses to bring their vision to life with much lower MOQs,” she added.
Other challenges highlighted in the report include sourcing raw materials at competitive prices, limited manufacturing capacity, ensuring consistent product quality and compliance with regulatory standards, supply chain disruptions, and establishing distribution networks and logistics operations.
To download the report, please visit https://www.in-cosmetics.com/global/en-gb/lp/sme-mini-report.html.
