The beauty industry is currently in an era of hyper-entrepreneurship, and with that comes high levels of accessibility. With the right Instagram aesthetic, a compelling founder story, a Shopify site, and a few thousand dollars, virtually anyone can launch a beauty brand. However, beneath this lies white labeling, a quieter, less visible sector that currently powers a significant chunk of global beauty launches.

This sector, valued at $9.21 billion in 2024 and projected to reach $24.03 billion by 2033 with a CAGR of 11.5% from 2026 to 2033, enables entrepreneurs to brand preformulated products as their own, especially for indie beauty and influencer-led lines. From moisturizers to masks, an increasing number of products lining shelves and feeds are the output of the same few labs, with many brands beginning not with bespoke R&D, but with ready-made formulas and factories waiting to slap a name on a jar. While private and white labeling has created a low-barrier entry point for aspiring entrepreneurs, the model is fraught with ethical concerns, limited differentiation, and a growing saturation that threatens long-term brand equity.

The Mechanics of the Market

White or private labeling in beauty refers to the practice of sourcing preformulated products from a manufacturer and rebranding them for resale. The difference between the two terms is largely semantic. “Private labeling, white labeling—it’s the same product, just with different labels,” explained Ginger King, a cosmetic chemist with over 30 years in the industry. King is the founder of Grace Kingdom Beauty, a cosmetic product development company.

“If I have this formula done, I can sell to [A or B or C]. It’s the same baby—they’re all just adopting it,” she continued. The appeal of private labeling is immediacy. It comes with low investment, quick time to market, and oftentimes, the illusion of owning a brand. With just a few thousand dollars, anyone can be a "founder." This democratization of beauty entrepreneurship is both its power and its Achilles’ heel.

For David Chung, CEO of iLABS, the surge in demand was a signal to launch his innovation-forward and research-driven contract manufacturing company during the pandemic. “There was a real shortage of manufacturers who focused on R&D,” he told BeautyMatter. “Most are just mass-produced commodity items. I wanted to create a company that brought real innovation to brands,” he said.

iLABS now operates dual facilities in New Jersey and South Korea, catering to brands that juggle both Western and Asian markets. While white labeling may suggest a lack of original solutions to many, Chung said that what sets companies like his apart is a hybrid model—offering validated library formulas for smaller players, while still investing in next-generation R&D for ambitious brands seeking exclusivity.

A Market of Opportunities—and Limits

White labeling unlocks possibilities for dermatologists, estheticians, and content creators looking to turn their communities into commerce. However, as the market matures, the cracks are starting to show. “It’s a viable entry strategy if you don’t have a lot of capital,” said King. “But if you want to build a sustainable brand with purpose, you shouldn’t be using private label. It’s for kindergarteners. It’s a way to get your feet wet,” she suggested.

Even for those who start strong, the ceiling is quickly reached. Brands don’t own the formulation, and should the manufacturer stop production, or raise prices, as many industries did during the pandemic, entrepreneurs are left scrambling. “There’s no lifeline for you,” warned King. “During COVID, I had multiple clients come to me because their private label suppliers vanished overnight.” Moreover, competition is cutthroat. “Only a few become successful,” Chung added. “You still need capital, marketing, distribution, etcetera. It’s not enough to just have a product.”

The true value of a beauty brand lies not only in its marketing savviness but also in its ability to deliver differentiated, effective products. For Chung, white labeling can hinder that. “When you use our library formulas, you're paying a higher unit cost and you can’t claim exclusivity,” he said. “We offer it because there’s demand, but the product is not unique to you. Not everyone can commit to a minimum order of 10,000 units.”

King echoed this, drawing a parallel between adoption and parenthood. “Creating your own formula is like having your own baby. Private labeling is the adoption. But what if 100 other parents adopt the same child? What makes your version special?” she asked. For brand founders serious about long-term growth or even exit strategies, customization becomes not a luxury but a necessity.

There are also regulatory realities and cultural tensions to consider. Manufacturing can vary across markets. Chung’s facilities in South Korea, for example, must adapt to US FDA standards when creating products destined for American shelves, which can limit the use of more advanced ingredients available in Asia. “The US FDA is far behind in terms of ingredient innovation,” he noted. “Some SPF actives allowed in Korea are not even registered here.”

This disparity forces companies like iLABS to make products in Korea while still adhering to US compliance. “Our clients have the option to produce in either region, depending on their market. Some even make the same product in both locations to optimize for shipping and tariffs,” he added.

Ethical Dilemmas and Consumer Trust

Beyond the technical challenges lies an even steeper discourse on whether it is ethical to sell identical products under different names to consumers who assume they are unique. “From a consumer perspective, it’s misleading,” said King. “People want variety. If they’re buying the same thing under five different names, trust is eroded.” Yet, for many, it’s a matter of survival. White labeling offers fast entry.

“You don’t need to spend months on R&D. It’s about how well you market,” she added, “[But] as long as the product is safe and tested, it’s not unethical. It’s just not craftsmanship either.” As the white label model becomes increasingly saturated, especially in skincare, differentiation becomes more challenging. “Everyone wants to make a serum, a mask, a toner,” said King. “But what is your unique proposition? Your brand needs to mean something beyond the label.”

The industry is also seeing a philosophical shift. Consumers are increasingly interested in the origins of their products—how they’re made, by whom, their carbon footprint, and with what intention. “Today, you have to start with the end in mind,” King advised. “Are you trying to sell to a conglomerate? Build a legacy? That vision shapes everything.”

Neither expert dismissed white labeling outright. It remains a valuable gateway, particularly for market testing, low-risk brand extensions, or building early traction. The consensus, however, is clear—it’s not a destination. “If you’re serious about building a brand that lasts, eventually you’ll need to own your formula,” said King. “Otherwise, you’re just another label on a shelf.”

Ultimately, the white label model has opened the gates to entrepreneurship, but it doesn’t promise a long-standing sustainable business. For serious founders, the next step involves either evolving or being indistinguishable. Because in an age where product sameness is obvious to the market, owning your formula is no longer a luxury but a business imperative.