Indie Beauty Brand Founders Share The Key Functions They Outsource Versus Keep In-House

In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask 12 founders and executives: What key functions do you outsource and why?

Lynette Lovelace Founder and CEO, Lifetherapy

Any entrepreneur knows you often need to be a jack of all trades to build your business. One way we've marked our growth is by being able to hire masters, meaning staff, with specialized skills who excel at what they do and will help Lifetherapy scale.

Our in-house talent handles sales, e-newsletters, digital media, accounting, inventory management, order fulfillment, technology, operations and strategy. We outsource work that depends on vibrant relationships, specifically social media and public relations, since it's important for us to work with players who are well-connected in the beauty industry and share our core values in building customers that stay with us on this journey.

Lauren Jin Creative Director, CLĒ Cosmetics

The current key functions that we outsource are social media, PR and a fulfillment center. We plan to bring a PR/marketing component in-house in the future. After briefly working with agencies, our team realized there were times when communicating what the brand and products are about, do not translate completely, whether it is the purpose of the product or what we as a brand are trying to state. 

No matter how hard both parties communicate, we realized having a PR/marketing team working remotely would not be as effective compared to having a designated team member come on board.

As a small team, we face revisions, progression, and various developments most of days. Having a PR/marketing team member on site and part of the ever-shifting developments helps the overall progression of the brand.

The benefits of having a team member present with the whole team supports their own activities within the brand. I realized for CLĒ, working closely and being a part of the environment the brand creates, led to the strength of marketing and mediating publicity.

Dewi Leona Kauw Founder and Director, Skin Dewi

We currently outsource manufacturing due to the legalities here in Indonesia. For a skincare brand to pass safety assessment, it is the law for the products to be manufactured in a certified GMP facility.  

For a startup, we decided to go with this option rather than spending more time, energy, resources running a full-blown GMP factory, which also takes large-scale capital investment. We formulate and even source and import all the raw materials ourselves, except for production.

For now, we feel that we should focus on building the brand, marketing and focus on R&D, build a strong business foundation, then maybe, in two to three years, plan to build that GMP Factory.

Meryl Marshall President and Chief Product Officer, Hynt Beauty

We decided to outsource our bookkeeper last year. Accounting can add up to a lot of time and potentially headaches if one thing is off. She’s in Las Vegas, so quite far from our New Jersey headquarters, but shared access to QuickBooks and Dropbox folders are all you really need.

We are still doing our own fulfillment, but nearing full capacity. Due to our steady growth, we’ll probably have to address this in 2019.

We employ a team that handles a combo of marketing, social media and PR. I do jump in regularly to add personal comments on social media posts and directly connect with fans and customers, but I can’t do it all. I find that delegating certain areas of your business frees me up to allocate more time and energy into growing the business through new channels as well as product development.

Claudia Negru Co-Founder and CEO, Sarya Couture Makeup

The most important key function we decided to outsource is the fulfillment process. As a small indie brand, we could not afford, when launching the business, to have our own deposit and an employed team for the entire operational process.

We decided to contract a third-party logistics partner where we currently keep our products and which handles the operational process. We had an initial training with the team over there to make sure our brand proposition is fully embraced at the operational level, and we keep a close eye on each delivery that goes to our customers. Once the business grows and becomes more established, this is a process we’ll consider to internalize, but, at this point, being in the first year of the brand, this was the most efficient decision we made.

Another key function we outsource is the accounting process. We operate our business from Italy, yet we sell globally. We needed an accounting partner that works also as a financial adviser for our business. Considering our business specific, the financial advisory is a key function we will keep outsourced long-term.

Patti Pao Founder and CEO, Restorsea

We outsource everything except research and development. We are one of the rare indie brands who owns their own lab. Our enzyme is very finicky, and it is difficult to formulate with. The reason why we have 34 issued patents is because we were the first to figure out how to formulate with our hatching enzyme without deactivating it.

Production: We manufacture, batch, fill and assemble our products. Sales: We have our own sales force. It was difficult to outsource this as our technology, which is backed by third party clinical studies published in major medical journals, needs to be explained. Operations: Our business is growing so quickly that we need to manage this function on a weekly basis.

We outsource all functions where the [external] expertise is greater than ours, including digital media, warehouse and distribution, accounting and legal. We raised $60 million and need to present audited financial statements to our investors.

Katrin von Hallwyl Managing Director, Ikoo Brush

We only outsource part of our PR activities because it is essential to keep close track and overview of all PR actions, on and offline, and we have found that it is more effective with external agencies at this stage as they have better analysis tools to count our ROI.

For our international distribution network, we monitor its PR activities from our headquarters in Munich, which, in some cases is done in-house and, in others, outsourced. We not only monitor, but help provide guidelines, CI structure, as well as content necessary for professional and successful PR.

Our fulfillment is also outsourced as the maintenance and expertise of logistics and fulfillment is requesting high standards of management within this field, manpower and space and a functional link-up to all courier companies.

We like to focus only on our core business, the beauty and hair care industry, therefore we outsourced this part of our business to well-selected and most valued partners. Accounting is done in-house. Never let someone else touch your money.

Jessica Kizovski Founder and Lead Formulator, Veriphy Skincare

We made the decision to outsource our PR as we wanted our brand to be positioned properly in the marketplace. At the beginning, we tried to handle the PR in-house, but soon realized it was pulling us away from other important duties and aspects of the business which we were better suited to handle.

Our business ethos is based on the fact that we are founded by a group of women in STEM (science, technology, engineering and mathematics,) meaning our expertise is in chemistry not public relations. Being aware of your business’s strengths and weakness allows you to build a better overall strategy and can help you identify where you need to spend money versus what you can take on in-house.

Dominique Nemery Founder, Amatera Cosmetics

One key function that we outsource is the production because we had the chance to find the right partner who shares the same values. Our concept is that all our products must be 100% natural, vegan, clean, efficient and with the highest percentage of certified organic ingredients. It was compulsory to find a partner sharing those values.

We had the chance to find the right one in Belgium near our location. This is also important as we can easily control the production, and maintain a partnership and ongoing collaboration between our companies. This is also in line with our transparency values. In the future, we would like to bring production in-house to have full control on the product life cycle from production to distribution. Each step will come in time.

Lori Gildea Founder, ThePureBag

I outsource almost everything right now, CFO, CPA, manufacturing, and marketing (creative and digital). With my daughter, a yoga instructor located in Denver, we’re a two-women show. With funding, we would add a strategic consumer marketer, product designer, operations personnel, plus expanded manufacturing to assist with our five-year growth plan to build out the brand and provide multiple offerings within the sports, family and travel segments.

Anthony Davis Founder, iON Performance

Maybe it's my sports background or my time in healthcare marketing, but, in both of those experiences, I really learned to appreciate the value of an empowered team and letting individuals who are masters of their craft own it and be empowered to do what they do best on behalf of the team.

As the founder of a startup, it's of course hard to recruit blue-chip talent for full-time roles, so we have elected to outsource key roles of PR, creative design and fulfillment with trusted independent consultants or small agencies who believe in the spirit of our brand and share our values.

Their experience and commitment as not just vendors, but partners, helps us do much more with less and make leaps along the development curve that would otherwise take years. We certainly hope to bring their talent in-house as we grow.

Frances Shoemack Founder, Abel Odor

We are actually in the process of outsourcing anything and everything that can be done better out-of-house. This frees up our small team to focus on the things we are best at and the things that need our love and attention the most: the fragrance and a continual series of improvements to the product, experience, environmental effect and how we communicate.

We work with distributors in most of our markets. Because they are local, they know the people, the dynamics at play and are able to best represent our interests through their constant presence in the market. Outsourcing things like order fulfillment means our customer orders get shipped the same day if ordered before 11 p.m., something we could never achieve in-house.

This is not to say we hand our business over to other parties and wipe our hands. We view our partners as extensions of our team and work extremely closely together.

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