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In 2020, the average annual expenditure on cosmetics, perfume, and bath preparation products totaled roughly $199 per consumer unit in the United States, representing the highest expenditure in over a decade.
Many manufacturers and sellers in the United States overlook Chinese cosmetics when deciding where to buy wholesale products from. However, the fact remains that China is where you can find an incredibly diverse range of products for some very attractive prices.
Importing cosmetics and skincare products from China is a lucrative business. However, specific regulations and best practices apply.
We’ll delve into details covering niche research, FDA approval of cosmetic items, compliance with tariff rates and exchanges, and so much more.
Cosmetics Guide
Step 1: Sourcing
Choosing Your Niche
You can consider a wide range of products when deciding on a niche. Businesses typically narrow it down with solid market research. Stick with a product you are familiar with, and be sure to research the demand, production costs, shipping fees, and required documentation.
You want to select a product that is easy to sell and turns a profit, with two significant factors to consider: deciding between an Original Equipment Manufacturer (OEM) product or Original Design Manufacturer (ODM) sourcing. We’ll delve into this a bit more below.
OEM vs ODM
Whether you choose a manufacturer or designer, knowing what to expect from the sourcing process could make the difference between getting your products on time or waiting weeks for your goods to be released from customs.
OEM Products
Companies design the product they want to sell and rely on a licensed manufacturer to produce it and the components. For example, the Acme Manufacturing Company provides custom formulation services for cosmetic businesses. Acme Manufacturing is the OEM in this scenario.
This method requires extensive knowledge of product ingredients, adequate funding, and the proper documentation for FDA approval in the cosmetic industry. When selecting an OEM, you are essentially starting from scratch. Due to strict regulations, this can be highly challenging for those looking to import cosmetics into the United States.
ODM Sourcing
Also known as “private labeling,” this method is commonly chosen due to its simplicity. Businesses can select a product design from a manufacturer’s design catalog through ODM sourcing.
The importer can tweak the product to fit their needs by adding their custom brand label to the packaging and then market it under their business model. This method still requires supporting FDA approval documents for cosmetic imports. However, certain private label manufacturers have a pre-approved list of cosmetic formulas waiting to be marketed by a particular company.
Either method has its advantages and disadvantages, so it’s essential to make your selection based on your company’s needs.
Finding a Supplier
You do not want a manufacturer who cuts corners as a business owner. Choosing the correct supplier can potentially make or break your business. One must consider the manufacturer’s production capabilities and quality management systems.
While you may want to take the cheaper route, this can end up being exceptionally costly for your business. When choosing a supplier, you want to ensure it’s done correctly, not just in the quickest way. Ask yourself the following:
Production Capabilities
Quality Management Systems
When choosing a cosmetic supplier, these are just a few key factors to watch out for. Surprisingly, many Chinese manufacturers are not keen on international trade due to the complex nature of import rules and regulations within the United States.
So it makes sense to look for a cosmetic supplier already exporting products to other businesses in the United States, primarily large US-based retailers like Sephora. These suppliers are already vetted and adequately certified, saving you the frustration of researching if the supplier is compliant with current FDA requirements.
Step 2: Manufacturing
In the US, strict rules and regulations apply to importing cosmetic goods. First, regardless of what product you are importing, the US has a list of essential documents required for the approval of international imports, including:
This paperwork can be complex for individuals to complete on their own, which is why many businesses enlist the help of a licensed customs broker. A good broker ensures no mistakes are made.
Furthermore, when importing cosmetics from China to the United States, importers must comply with the Fair Packaging and Label Act (FPLA) and the Federal Food, Drug, and Cosmetic Act (FD&C).
The FPLA is a federal law in the United States defining labeling, packaging, and ingredient regulations regarding cosmetics. Under this act, all cosmetic items must have a label with the identity of the product, the net quantity of the product, the contents name, and details of the manufacturer, packer, or distributor.
Additionally, the FD&C Act of 1938 established the quality standards for food, drugs, medical devices, and cosmetics that are sold in the US. This law provides federal regulation and enforcement of these standards. The FD&C Act is the framework in which the Food and Drug Administration operates.
Together, these federal laws define labeling, packaging, and ingredient regulations regarding cosmetics. Companies that violate these laws when importing cosmetics to the US can be subject to financial penalties, product refusal, and import restrictions.
FDA Approval
Most cosmetics imported to the US do not require direct FDA approval. However, there are a few exceptions to this rule. The most noteworthy exception is the use of color additives. All color additives must be on the permitted additives list and require immediate FDA approval before importing to the United States.
Companies must also prove that the color additives are being used for their intended purpose. For example, one may not use the same additives in lipstick found in eye shadow due to the consumer’s increased risk of potentially harmful ingestion.
The FDA labels certain cosmetic products as drugs if the product is marketed to prevent, treat, or cure any current disease or condition of the purchaser.
This includes shampoo eliminating dandruff, sunscreen that decreases your risk of contracting skin cancer, or eye creams designed to prevent wrinkles.
If you label your cosmetic product as a food or a drug, it will require FDA approval before import, and cosmetics that contain prohibited ingredients are banned from the US entirely.
Labeling
When importing cosmetics into the US, do not overlook product labels. If something is incorrect on your labels, it’s difficult to fix this mistake once the shipment ends up in customs. The correctness of the information on labels is crucial.
To ensure the public’s safety, the Federal Food, Drug, and Cosmetic Act of 1938 prohibits false information on product labels to ensure the public’s safety.
If you label any portion of the cosmetic product with information that is misleading, false, or confusing, then your shipment will not be allowed through customs until you make the proper changes.
Be sure to verify that the product label is clear and correct to prevent any setbacks during the importing process. When creating a label for your cosmetic product, you will need to include:
According to the Code of Federal Regulations (CFR), any product containing an ingredient that has yet to be approved for safety must include a warning label. Otherwise, the FDA will consider the product as misbranded.
Researching Manufacturers
Doing your due diligence on manufacturers is crucial for the importing process. There are several factors to consider when doing your research. This includes minimum order requirements, cost per unit, quality management, production capabilities, and a potential language barrier.
You want to select a manufacturer who takes pride in your business as much as you do. This way, you ensure each product you receive is up to the customer’s expectations. Manufacturers in China have their own rules and regulations. Doing your due diligence before choosing a manufacturer can save you time, money, and potential legal mistakes.
Minimum Order Requirements
Turning a profit is a top priority for any business. When choosing a manufacturer, you want to ensure they can produce the appropriate number of products while staying cost-effective.
Certain manufacturers require a minimum order limit. From a supplier standpoint, they also have to turn a profit on the products they help produce. It may not be cost-effective for them to produce only a few hundred orders at a time.
It’s essential to only purchase what you need to meet demand. If a manufacturer has a high minimum order requirement, you may have an excess of unsold products, which negatively impacts your profits.
Select a manufacturer with low minimum order requirements to ensure the products will be sold, as well as maintain the quality and consistency that customers desire.
Potential Language Barrier
When importing goods from a foreign country such as China, it’s essential to communicate clearly and concisely with the manufacturer. Even the smallest detail must be accurate since the United States Customs and Border Protection (CBP) inspects imports from China with the utmost scrutiny.
If additional assistance is needed, professional translators can communicate every aspect of the import process.
Step 3: Shipping
Importing cosmetics from China to the US is available through two methods of transportation: ocean and air. Both have advantages and disadvantages when it comes to arrival time and cost-effectiveness.
Air Freight
Air shipments can reach their intended destination within a day; however, it is the costliest choice of the two.
Suppose you have customers waiting for you to restock your cosmetic items. In that case, it may be worth the cost to import the products by air to improve customer satisfaction and prevent potential lost revenue in the future.
Shipping by air is the preferred method of transportation for products that are inexpensive to produce or if you are shipping low volumes.
Ocean Freight
Transportation via cargo ship is the preferred method for those importing goods from overseas, especially for those who import goods several times throughout the year.
There are two types of ocean freight: Full Container Load (FCL) and Less Than Container Load (LCL), which allow you to take up to a full container for larger shipment volumes, or a partial container shared with others for smaller shipment volumes.
Due to weight restrictions, the bigger the shipment, the cheaper ocean freight becomes. However, ocean freight is the slowest transportation method for importing goods from China to the United States.
It could take weeks or even months for the cargo ship to reach the US entry point, and product safety is not guaranteed. If you are shipping low to medium volumes of cosmetic goods and shipping time is not a factor, ocean freight is the better alternative.
Freight Forwarders
Selecting a freight forwarder is just as essential as choosing the right supplier. A freight forwarder can provide a wide range of services and features to your business, saving you time and money.
An ideal freight forwarder should be able to offer you:
Freight forwarders help with your shipping needs by facilitating the import process. It’s essential to do your research beforehand to ensure reasonable prices. At Bookairfreight, our mission is to provide a smoother shipping experience. We offer free quotes for shipments, an easy-to-use website, and free consultations with our logistics experts.
By using our services, you can compare, book, and manage your shipments all in one place. With rates far cheaper than the leading competitor, your products are guaranteed to arrive from factory to warehouse quickly, cheaply, and safely.
Weight Calculations and Charges
There are multiple factors to consider when examining the costs of importing cosmetics from China to the US:
A combination of the above has a bearing on the cost of shipping. Most cosmetics are lightweight, meaning shipping costs are relatively low and can be measured in kilograms.
However, cosmetic products are measured volumetrically and can increase shipping costs. Examples include shampoo, toothpaste, and lotions.
The above factors impact how much you can expect to pay to import cosmetics from China to the United States. It is recommended you work with a freight forwarder and customs broker to ensure the shipping method you choose is efficient and cost-effective.
Taxes, Duties, and Import Documents
Proper documentation is essential when importing goods from foreign countries. Not only does the United States have specific requirements for documentation and regulation, but so does China.
Some important notes to consider are tariffs, particularly Section 301. The US has imposed higher tariff rates on goods imported from China due to China’s unfair trading practices. These taxes were initially applied to all goods imported from China to the US, although a list of exclusions is updated regularly.
The tariff depends on the product itself. It ranges in percentage, based on the amount of imported product. When filing the paperwork for your import, you will need to locate the Harmonized Tariff Schedule (HTS) code for that product. This allows CBP to calculate the import duty on your shipment. Incorrect codes can look suspicious to CBP, and your products will not be allowed through customs until the proper code is obtained.
Typically, cosmetics fall under the HTS heading 3307. To classify your specific product, you will need the appropriate subheading. For example, antiperspirants are classified as 3307.20.00.00. These codes are subject to change, so it’s always best to consult a customs broker before importing.
Working with a Customs Broker
Agencies such as CBP, USDA, and the FDA all have their own sets of rules and regulations required to import cosmetics from China to the US.
Changing political climates and free trade agreements could complicate the importing process, making it overwhelming for businesses and individuals. Licensed customs brokers are highly experienced professionals who aid in the entire importing process. Customs brokers can assist you with:
You should prioritize every shipment with care and dedication. If you want to import your cosmetics quickly and without complications, consider what working with a customs broker could do for your business. You should now have all the information you need to import cosmetics from China to the United States.
This guide can help you navigate the correct manufacturer, distributor, transportation method, and the proper supporting documentation. In light of the above, importing cosmetics from China to the US may seem daunting. When in doubt, consult a professional to work out the finer details. By doing so, the entire process can be made quicker, more efficient, and certainly more cost-effective.
Frequently Asked Questions (FAQ)
- Does the FDA pre-approve cosmetics?
Most cosmetics that does not classify as drugs imported to the US do not require direct FDA approval.
FDA does not pre-approve cosmetic products or ingredients, with the important exception of color additives.
- What are some examples of cosmetics classified as drugs by the FDA?
Cosmetics could be classified as a drug when it has two intended uses, with ingredients intended to do two different things. for instance, moisturizers and makeup marketed with sun-protection claims as both cosmetics and drugs.
- How to know if my product should be classified as a cosmetic or as a Drug?
Cosmetics and drugs are defined by U.S law under the The Federal Food, Drug & Cosmetic Act (FD&C Act).
The FD&C Act defines cosmetics as "articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body...for cleansing, beautifying, promoting attractiveness, or altering the appearance.", and defines drugs as "articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease...and articles (other than food) intended to affect the structure or any function of the body of man or other animals."
When in doubt please consult legal professionals about your specific circumstances.
Proud Co-Founder and CEO of Bookairfreight. Shortly after starting to work in the world of logistics, I was astonished at how difficult and time consuming it was for businesses to get their hands on a simple air freight quote. I saw this as an opportunity to really make a difference in people’s lives, and felt like I had to do something. It was the spark that lit the fire of Bookairfreight’s creation.
