Escape Tariffs: How To Onshore Cosmetic Manufacturing Back To The US
Manufacturing your cosmetics in the US is more important for beauty brands than ever.
With rising tariffs on the horizon, and growing political and economic uncertainty abroad, it’s time to move production back home.
But for small businesses unfamiliar with the process or costs involved in switching to US manufacturing, getting started can feel overwhelming.
Innacos is here to help!
Our in-depth guide below provides a simple step-by-step process for moving your manufacturing from China (or another country) back to the US.
We discuss how to initiate the reshoring process, the costs involved, and what to do if you do not own your formula IP or testing documentation.
Why Move Manufacturing to the US? Tariffs, Rising Costs Abroad, and Political & Economic Uncertainty
As discussed in Vogue Business, the US government is introducing an additional 10 percent tariff on goods from China, with more tariffs likely in the near future. Business Of Fashion reports that the new administration intends to increase tariffs on Chinese imports to as much as 60%.
These tariffs put a strain on supply chains in the beauty industry by increasing costs for ingredients, finished products, and packaging – much of which is sourced off-shore.
The discussion about moving manufacturing away from China is not new. Costs of manufacturing in China were rising even before the pandemic, and became even more apparent with the increased Chinese import tariffs of 25% under the previous Trump administration (as discussed in Business Of Fashion).
Manufacturing Abroad in a Politically & Economically Volatile, Post-Pandemic World
The supply chain disruptions caused by the pandemic were the final push many US-based beauty brands needed to source their cosmetics elsewhere.
Some brands relocated to other countries in Asia, but avoiding Chinese suppliers alone isn’t enough.
Unexpected political or economic factors can disrupt your supply chain anywhere in the world. For example, Reuters reported in 2023 that political instability in Ukraine led to cosmetic shortages from European suppliers.
Plus, the new administration is pushing for increased tariffs across multiple regions. Most noticeably, Politico announced a 25 percent tariff on imports from Canada and Mexico, effective from February 1st, 2025.
Reshoring: A Viable Solution to Tariffs (Even for Smaller Brands)
The burden of tariffs is particularly worrisome for smaller brands with lower profit margins. In many cases, simply absorbing the increased cost of production isn’t an option.
Brands are likely to respond with cost-saving initiatives, including shrinkflation (reducing the amount of product per unit without reducing the price) and compromising product quality by using cheaper, less effective ingredients.
How can you navigate the challenges that come with manufacturing abroad without compromising on product quality – or your reputation?
The most viable long-term solution is to relocate manufacturing back to the US with a high-quality domestic product manufacturer and source most other elements of the supply chain domestically to avoid paying tariffs.
Many business owners love the idea of bringing manufacturing home – not only does it save on tariff and shipping costs, but it’s also great for the environment, and a key selling point to US consumers.
However, domestic manufacturing is not without its limitations: there’s generally less product choice, many US-based manufacturers have high MOQ, and smaller brands worry that they can’t afford the increased prices that naturally come with reshoring.
That’s why, here at Innacos, we’ve developed a process to help you relocate with as few hurdles as possible.
We set no strict MOQ (instead, we charge a small order fee for quantities under 2k pieces), offer the most rewarding loyalty program in the industry (earn up to 200% of formulating fees or up to 150% of CPC fees back when you commit to a long term manufacturing relationship), and we can help waive some of the tech transfer fees to ensure your relocation is a success.
Learn more about moving your manufacturing from China to the US by contacting us here.
The Process of Moving Manufacturing Back to the US
The actual process of moving from either home to lab or from one lab to another (even abroad) is less complex than you might think.
The total time on average is just 3-6 weeks for the tech transfer. However, if you do not own the formulation IP or testing IP, this can significantly extend the process by up to an additional 6 months. But don’t worry - we provide step-by-step solutions for tackling IP issues below.
The full timeline for moving from another lab to Innacos works as follows:
Step 1: Request a Quote or Audit [1 week+]
Email us at customerservice@innacos.com
Provide the formulation, testing documents, or a request with lab work
Please let us know if you do not own the formulation Intellectual Property (IP) and testing documentation for your products. If you cannot get it from your lab, you will need to reverse engineer your formulas with a US lab or re-formulate your products. This will add a significant amount of time (up to 6 months) to this entire process
Request an NDA first if needed
We’ll get back to you with questions/ next steps within 2-4 business days
Step 2: Book Services / Reformulating / Testing [Optional: Up to 6 months to reformulate | 10-16 weeks for testing]
This step is necessary if (a) you do not own the IP for your formula, or (b) you do own the formula IP, but do not own the relevant testing IP. PET and stability testing are mandatory, plus any other tests required for your specific formulas
If your Chinese/international lab will not provide the formula IP and testing results to you (always ask first!), your formulas must undergo these processes again
Costs will depend on whether you choose custom-formulated or preformulated products. More information on formulating methods is available here
Testing prices and timelines can be found here on our testing information page
Once completed, you’re ready for manufacturing!
Step 3: Place Custom Manufacturing Order [1 week+]
1. Place a contract manufacturing order with us (typical MOQ 2k+ pcs, a small order fee applies for quantities below this)
This can take longer depending on...
Complexity of project
Your packaging supplier
Shipping timelines
Step 4: In-House Testing [3 week+]
1. In-house testing (this guarantees products are free of contamination):
USP 61 & 62 testing
Other testing (CBD, etc.)
Quickness depends on tests and adjustments
Step 5: Filling + Assembly [4 - 12 weeks]
Projects are booked onto the assembly line ASAP
The timeline depends on the current queue and other factors, including seasonality, order size, and complexity
Contract manufacturing timelines are most heavily impacted by the availability of the ingredients used in them!
Step 6: Payment + Shipping [1 - 2 weeks]
1. Invoice issued for final payment (A/R) and/or shipping
2. Once paid, your order is shipped the next day!
up to 1 week for domestic orders (USA)
up to 2 weeks for international orders (outside the US)
Read more about relocating back to the US on our website here.
I Do Not Own the IP For My Formulas. What Next?
Unless you have a contract explicitly stating that you own the formulation IP, you need to find a way to obtain it from your manufacturer.
Always ask nicely first, then try to negotiate a buyout. If they refuse, you will need to reverse-engineer your products with another lab or reformulate them completely.
How Much Will It Cost to Reverse-Engineer/Reformulate? How Long Does It Take?
The cost of this step ranges from $0 to $5,000 per formula, depending on whether you obtain the formula IP for free, negotiate a deal with a new manufacturer, or require a full reformulation. Even after payment, the process can take several months to perfect.
Reverse formulating typically takes 1.5 to 3 months but it could extend up to 6 months.
This timeline may be even longer if your formula contains complex ingredients with multiple variants (for example, polyisobutene comes in various forms that behave wildly differently in formulas yet may appear identical on ingredient lists).
As noted in the manufacturing timeline above, if you don’t have the required testing documentation for your exact formula, you will need to retest. This will take 3 months and costs upward of $1,250. For a full breakdown of moving your manufacturing out of China, please read our in-depth blog post here.
We understand that this additional cost can be difficult for small businesses to face. That’s why we can discuss waiving some of the tech transfer fees if you choose to manufacture with Innacos. Learn more by contacting us directly here.
Why Relocate Your Manufacturing to the US with Innacos?
Innacos has the Necessary Experience and Expertise
We are experts in moving cosmetics manufacturing from China to the US. Our founder, Megan, spent years manufacturing cosmetics in China and also worked as a consultant for US brands in China before launching Innacos, where we manufacture 100% in the US.
Not only do we develop high-quality cosmetics, but we also have the expertise necessary to make the transition from Chinese to US-based manufacturing as smooth as possible.
Plus, if you have any questions or concerns, we offer consulting services to help you navigate your business’s unique challenges.
Learn more about our full range of consulting services here.
Lower MOQs & Reduced Tech Transfer Costs When You Work with Us
Many small brands worry about adjusting to higher MOQs when switching to domestic manufacturing.
At Innacos, our general MOQ for contract manufacturing is among the lowest in the industry, starting at 2,000 pieces for consulting clients.
We can even manufacture in smaller quantities (subject to a small order fee). Plus, we can drop the MOQ 60% lower if you do a partial tech transfer with us (of your formula or your testing, or both, as discussed above).
Learn more about contract manufacturing here.
Choose Clean Beauty with a Diverse Range of Formulating Options
At Innacos, ethics come first. We are experts at developing clean, vegan, cruelty-free, and sustainable skincare and color cosmetics.
Although facing transfer costs and switching manufacturing to a domestic lab can be daunting, it’s also an opportunity to level up your business. Now is a great time for deep target market research and business analysis.
Evaluate your profit margins, identify your key best sellers, note which SKUs are underperforming, and take the steps necessary to improve your entire product line for your target base.
Maybe it’s time to refresh your product range and develop something new and exciting with a US-based manufacturer.
If you need to reformulate or offer something new, Innacos provides multiple formulating methods to suit your product needs and current budget. These include private label/bulk, custom product creation, and custom formulating, in addition to contract manufacturing.
Learn more about our formulating options on our website here.
Advanced R&D including Innovative Ingredients
At Innacos, our R&D process is second to none. We’re constantly innovating and developing new techniques to improve our formulas, including environmentally-friendly upcycled ingredients, proprietary ingredient blends, and custom luxury fragrance/essential oil blends.
In sum, moving your cosmetic manufacturing back to the US to avoid tariffs involves the following steps:
Request your formulation IP and testing documentation from your current offshore supplier. If they refuse, you'll need to reformulate and retest domestically
Get a quote and lab audit from a US-based manufacturer like Innacos
Book reformulation and/or testing services if needed
Place your contract manufacturing order
Source packaging from a third-party supplier
Allow time for testing, filling, and shipping
Ready to bring your manufacturing back to the US? At Innacos, we take every step necessary to make the transition back home as easy as possible for small cosmetics brands like yours. Get in touch for a full audit and quote by calling: (812) 329-1105 or emailing: customerservice@innacos.com
