Custom Formulations versus Standard Products: Which is Right for Your Brand? In the world of skincare or wellness products, there will come a time when a brand will need to decide between custom formulations or standard products. There are pros and cons for both, and the decision to go custom or standard will be based upon your branding needs/wants, goals, and audience.
This blog will look at some of the critical differences between custom formulations and standard products, and help you decide which route is right for your brand!
Understanding Custom Formulation
Custom formulation refers to a unique product tailored to your brand’s specifications. This includes the process of working with manufacturers or labs to create a product that contains your exact requirements, and contains ingredients which meet your obligations regarding functionality and performance.
Key Features of Custom Formulation:
Unique Ingredients: Custom formulas allow brands to choose from specific active ingredients that align with their values, audience, and intended benefits.
Tailored to Express Brand Identity: The product can be created to embody your organisation’s philosophy, aesthetic, and consumer needs.
Innovation & Exclusivity: Custom products can differentiate you from your competitors in the marketplace – custom products provide you with exclusive attributes that your competitors do not offer, creating uniqueness.
Full Control: Make every major decision from start to finish – from the sourcing of the ingredients to testing the final product.
Pros of Custom Formulation:
Brand differentiation: Custom formulation allows you to differentiate yourself from competitors in the marketplace. With custom statement products, you’re producing something that none of your competitors can imitate.
Designed for Specific Needs: Custom formulations can be designed to address specific solutions unique to your target audience, whether they’re skin concerns such as hyperpigmentation, or specific issues related to wellness. This makes your product more attractive to a niche audience.
Total Control Over Ingredients: Custom formulations allow you to customise and select high-quality ingredients for efficacy. This also gives you total control over the product’s benefits and the opportunity to have the product align with your brand’s ethics (e.g., cruelty-free, vegan, organic).
Higher Profit Margins: Custom products are based on exclusivity, which typically incurs a higher price point, especially if marketed properly, resulting in higher profit margins.
Cons of Custom Formulation:
Higher Initial Cash Investment: The process of developing a custom product involves a large investment in research and development, formulation, testing, and manufacturing. This can be a hurdle for smaller or new brands.
Longer Development Time: In contrast to off-the-shelf products that are ready to change and use, custom formulations have an extensive timeline for research and testing, resulting in the potential for a lengthy product development cycle that could take months or longer.
Smaller Production Runs: Custom formulations are usually produced in smaller production runs, resulting in a higher per-unit cost. This, combined with longer development times, can impact your ability to scale quickly.
What Are Standard Products?
Standard products are ones off the shelf that have been created in advance by manufacturers to be offered to brands for white labeling and branding as their separate product. These products are already pre-formulated, tested, and prepared to be packaged, but may have some customization options. Essentially you are purchasing a ready to go product and simply making it your own!
Key Features of Standard Products:
Pre-Formulated: Already created and tested, and ready to be branded.
Lower Product Cost: Standard products are usually less expensive to produce since it has a more streamlined, mass-manufacturing process.
Faster Time to Market: The products are ready to be packaged, without the trouble of product development, the time to market is substantially reduced.
Pros of Standard Products:
Reduced Capital Investment: Off-the-shelf products often don’t need marketing research, which means you will save a lot from the start.
Faster Marketing: Off-the-shelf products can be sold as soon as they are received, which requires only branding and packaging. This means they can be marketed and sold quickly than other products.
Reduced expenses/proven formulas: Many off-the-shelf products are market-approved. Their constituents and formulations have already been tested, thus the risk of failing the product is minimised.
Increased production efficiency: Off-the-shelf products are produced in large quantities, therefore enabling firms to rapidly increase production volumes while simultaneously reducing costs for individual units
Cons of Standard Products:
No Distinction: As other companies can purchase the same products, differentiating yourself in the market becomes challenging. Standing out and cultivating brand loyalty becomes difficult.
Lack of Personalisation: Formulation is out of your scope, meaning some compromises might be made on the ingredients or product performance in order to meet the brand’s expectations.
Deficient Product Quality Control: The insight you have into the product’s development process or the quality of raw materials used to manufacture the product may not be sufficient, which in turn could tarnish the reputation of your brand
Which Option Is Best for Your Brand?
Now that we’ve covered the variations between custom formulations as opposed to standard products, let’s take a look at which option might work best for your brand.
Consider Custom Formulation If:
You want to differentiate: Custom formulations are the right option when you really want to create a product that’s truly unique to your brand and that no one else can easily duplicate. This differentiation is crucial in highly competitive industries, like skincare and beauty.
You Have an Audience or Niche: If your brand caters to a specific demographic or if your brand looks to address specific skin problems (e.g., acne, anti-aging, pigmentation), custom formulations can allow you to customize and tailor your product for those initiatives.
You are ready to invest: Custom formulations involve financial and time investments in R&D, testing, and production. If you have the time and the ability to follow a special product, then custom formulations may be an option for your brand.
Brand Integrity: If your brand is based on a mission, value, or ethos (such as organic, sustainable, cruelty-free), custom formulation allows you to formulate a product that is totally in line with your values.
Consider Standard Products If:
You Want to Get into the Market Quickly: If you want to be in the market quickly or do not have the resources for a long development cycle, standard products give you the fastest time to market and let you test the waters before developing custom formulations.
You Are On a Budget: Custom formulations have a heftier cost, especially for small brands. Standard product formulations allow you to start small with less upfront expenses and financial risk.
You Are Looking to Test the Market: If you are uncertain about the product’s viability or just testing a new product line, standard products let you assess market demand and customer response with little investment compared to custom formulation.
At the end of the day, product vision documenting and aligning with your product vision is inherently important. Whether you pick custom formulations or standard products, both could be successful by building into either process, and looking back, you could classify it as the same one product concept. Understanding your target main audience and your vision should influence your decision on which products to choose.
Conclusion
Cost-effective larger brands could very well stock standard products, so to pick custom formulations or standard products comes down to your brand’s vision, goals, and resources. Custom formulations mean you are free to be different, exercise more control, have far more uniqueness, and usually command higher profit margins. General products, despite their simplicity compared to custom formulations, may provide cheaper options. On the other hand, a faster and more cost-effective way to take a product to market is with standard products, which have historically worked and are usually cheaper, don’t remain as different as customizable things over long periods, but are more unique/customized than standard products.
At the end of the day, product vision documenting and aligning with your product vision is inherently important. Whether you pick custom formulations or standard products, both could be successful by building into either process, and looking back, you could classify it as the same one product concept. Understanding your target main audience and your vision should influence your decision on which products to choose.
See our previous article on Why Choosing the Right Private Label Manufacturer Matters for Your Brand for more details