‘We absorb as much as we can’: Rising indie beauty brands weighed down by increasing costs and logistical issues

Shakeup Cosmetics is a male cosmetics brand headquartered in the UK and is sold across several markets, especially in Asia Pacific. The brand recently launched in Australia this year and is gearing up to expand its footprint after its initial successes.

However, like many beauty brands, it has been plagued with logistical challenges which is affecting the company in various ways. Some issues it has encountered have been small but greatly annoying, such as the shortage of wooden pallets for shipping.

“People were fighting for them and it’s things like that just makes the costs go through the roof. And right now in Europe the energy costs have just gone up too. So, whatever the costs of the goods you had at the beginning of the conversation with your manufacturer, that could be revised,” ​said co-founder Jake Xu.

Xu told CosmeticsDesign-Asia​ that the brand is doing the best it can to absorb the extra costs as to not burden its customers, which has proven to be a challenge.

“We have not increased our prices and we’re trying to keep it that way because obviously, the consumer is also facing the same challenges and we can’t keep passing the cost on to them. So, we’re trying to absorb as much as we can.”​

However, he acknowledged that if things continue as they are, the brand may have no choice but to make that dreadful decision.

“I'm really hoping not. But at some point, you might have to because you have no choice. We’re working really closely with our suppliers, who are facing are a massive increase in costs to keep their factories running. We work with them to figure out how much we can absorb and how much they can absorb so we don’t pass it on to the consumers. But eventually, if this keeps going the way that it’s going now, I don't see any other choice.”​

Currently, the brand manufactures its products primarily in the UK, which is one of its key selling points, especially for a market like China. As such, it hopes to continue manufacturing in the UK, despite the energy crisis.

Sluggish development times

Currently, the brand has around six to eight SKUs in the development pipeline that is being affected by various challenges across the entire supply chain.

“There are global logistical challenges that everyone is facing right now. Things are just taking longer to develop – that is if you manage to find an OEM that will work with you because right now a lot of them are no longer taking on new contracts and are focusing on servicing their existing clients,” ​said Xu.

“Everything is pushing the lead time out and out and out more. Before the pandemic, we’re talking five to six months, now the standard is eight to nine months.”​

While that is only a difference of around three months, it can derail many plans for small independent brands.

“Two to three months is already a lot. When you launch a new product, you have to formulate, get it all signed off first and then you had to wait for almost a year before you can actually get a stocking warehouse. And if we’re talking about more complicated formulations, it can easily take 10 to 12 months,”​ Xu explained.

“For indie brands, for brands that need to be agile to catch on the trends, that something your customers are asking for, waiting a year for that to be available? By that time, there’s already a new trend.”​