ONE MANUFACTURER, TWO CONTRACTSTHE FACTORYSTOCK FORMULASOLD ON TO ANYONEPROPRIETARYCANNOT BE RESOLD$12$28
Industry TrendsBrand Founders6 min read21 August 2026

Same Factory, $28 Versus $12. The Question Is Whether You Paid for a Formula or Rented One.

Beauty Independent published a piece on 18 August examining whether products from the same contract manufacturer are really the same. Its useful distinction is not about factories at all: it is between brands that license a manufacturer's stock formula, which can be sold to anyone, and brands that pay for custom work the manufacturer is contractually barred from reselling. One of those is an asset you own. The other is a rental you are marking up, and the margin depends entirely on nobody looking too closely.

SL
Sophie Lansbury

Beauty 2.0 Founder - 20 years in the beauty industry

Every SKU you sell sits in one of two categories: a formula you commissioned and control, or a formula your manufacturer can sell to the brand launching next to you. Knowing which is which is the difference between a margin you can defend and one you are hoping nobody audits.

Key takeaway

In brief
On 18 August 2026 Beauty Independent published an explainer asking whether beauty products made by the same contract manufacturer are really the same. It draws a distinction that matters commercially: a brand can license a manufacturer's existing stock or white-label formula, which that manufacturer remains free to sell to other brands, or it can pay for proprietary custom development that the manufacturer is legally barred from reselling. The piece names manufacturer Schwan, linked through shipping records to products from both Charlotte Tilbury and Kiko Milano, and sets Charlotte Tilbury's Lip Cheat at $28 against Kiko Milano lip pencils at $12 to $16. It reports no formula-similarity testing, so nothing here says any two products are identical. What it does say is that the pricing gap between brands sharing a supply chain rests on differentiation that founders should be able to describe precisely.
Who this is for
Brand Founders
Main takeaway
Every SKU you sell sits in one of two categories: a formula you commissioned and control, or a formula your manufacturer can sell to the brand launching next to you. Knowing which is which is the difference between a margin you can defend and one you are hoping nobody audits.
What to do next
Go through your range and mark each SKU as stock formula, modified stock, or fully proprietary. Then check your contracts for whether the manufacturer is barred from reselling the ones you believe are yours. Most founders discover at least one SKU is not where they assumed it was.

On 18 August 2026 Beauty Independent published a piece asking a question that circulates constantly in private and rarely in public: are beauty products made by the same contract manufacturer really the same. Source: https://www.beautyindependent.com/beauty-products-same-factory-contract-manufacturers/.

The answer it lands on is more useful than either of the two positions people usually take. It is not that shared manufacturing means shared products, and it is not that the whole question is unfair. It is that there are two genuinely different arrangements hiding behind the phrase "our manufacturer", and they have opposite implications for whether you own anything.

The piece names Schwan, a manufacturer linked through shipping records to products from both Charlotte Tilbury and Kiko Milano, and puts Charlotte Tilbury's Lip Cheat at $28 next to Kiko Milano lip pencils at $12 to $16. It reports no comparative formula testing, and it is worth being precise about that: nothing in the reporting establishes that any two specific products are the same. What it establishes is that a price gap of that size exists between brands whose supply chains overlap, and that the gap has to be explained by something.

The two arrangements

The first is a stock formula. A manufacturer has a developed, tested, compliant base. You choose it, you choose a shade range, you put your packaging on it, and you go to market quickly and cheaply. The manufacturer keeps the formula and remains entirely free to sell it to the next brand that walks in, including one that will price it at half your level.

The second is proprietary development. You pay for formulation work, often with a minimum commitment and a development timeline measured in many months, and the contract prevents the manufacturer from selling that formula to anyone else.

Both are legitimate. Plenty of good brands are built on stock formulas, particularly at launch, and there is nothing dishonest about it as long as you are not claiming otherwise. But they are not the same kind of thing on a balance sheet. One is a purchase. The other is a rental with a markup attached.

Why this is becoming a visible problem rather than a quiet one

The reason to pay attention now is not that the practice is new. It is that the information is newly available.

Shipping records are searchable. Ingredient lists are photographed and compared across brands by people who do it for fun. Communities exist specifically to identify dupes, and a plausible dupe claim now travels faster than any brand's response to it. The thing that used to protect a stock-formula business, which was simply that nobody could check, has largely stopped working.

Which means the exposure has changed character. It is no longer a supply chain risk that sits with your operations team. It is a positioning risk that can arrive on a Tuesday in the form of a video with two products held side by side.

What actually justifies a price gap

There are real answers, and brands that have them should be able to say them without hesitating.

Concentration and grade of actives, where the formula genuinely differs. Testing you paid for, whether that is clinical, consumer or stability work that the cheaper product has not had. Shade development, which is expensive and is where a great deal of genuine formulation work sits in colour cosmetics. Packaging that performs differently in use, not just in a photograph. Service, refill programmes, guarantees. And brand, which is a legitimate part of the answer and a dangerous one to lead with, because it is the part a dupe video is specifically designed to make look weak.

The answers that do not survive contact with a comparison are the vague ones. Higher quality ingredients, without naming which. Rigorous standards, without saying whose. Premium formulation, when the formulation was selected from a catalogue.

The audit worth doing this month

This is a one-afternoon exercise and most founders find something they did not expect.

Take your SKU list and mark each one as stock formula, modified stock, or fully proprietary. Be honest about the middle category, because "we tweaked it" covers everything from a genuine reformulation to a fragrance change, and only one of those gives you protection.

Then check your contracts rather than your memory. For every SKU you believe is proprietary, find the clause that bars the manufacturer from reselling it. Founders regularly discover that a product they describe internally as bespoke was developed under terms that leave the manufacturer free to use it elsewhere, sometimes because the development was partly funded by the manufacturer to reduce the upfront cost.

Then look at your hero product specifically. If your best seller is a stock formula, that is the single most important fact in your business, because it means your most valuable asset is available to anyone willing to place a similar order.

What to do with the answer

If your range is largely stock formulas, the response is not panic or immediate reformulation. It is sequencing. Pick the one or two SKUs that carry your identity and move those to proprietary development first, accepting the cost and the timeline. Leave the supporting range where it is. Differentiation has to be paid for somewhere, and concentrating it in the products that define you is far more efficient than spreading a thin layer across twenty items.

If your hero is already proprietary, then your job is to say so clearly and specifically. A surprising number of brands with genuine formulation investment describe it in exactly the same vague language as brands with none, which throws away the advantage they paid for.

The uncomfortable framing

The way to think about this is that your gross margin has two components. One is the value you added, through formulation, testing, shade work, packaging performance and the trust you built. The other is the information gap between you and your customer.

The first is durable. The second has been shrinking for years and the rate is accelerating.

A price gap between two products sharing a manufacturer is not automatically indefensible. Plenty of them are entirely justified. But the brands that will still be holding their price in two years are the ones that can explain the gap in one specific sentence, and mean it.

If you cannot write that sentence about your best-selling product, the work is not marketing. It is product.

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SL

Sophie Lansbury

Founder of Beauty 2.0. Nearly 20 years in beauty — from counter to boardroom, indie launches to global houses. Writes about the operational reality of growing beauty brands.

About Sophie

A shared factory is not the problem. A shared formula that you do not own is the problem, and only one of those two facts is visible to your customer.

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