Custom Skincare Formula Development: How the Process Really Works

Custom formula or stock formula: when custom is actually worth it

Every skincare OEM project in Thailand starts with the same fork. Either you adapt an existing formula from the manufacturer's library, usually called ODM or stock formulation, or you commission a formula built to your specification. Custom development is the more exciting option, but it is not always the better one.

Custom is usually worth it when:

• You need a **specific active at a specific concentration** that no stock formula offers, for example a particular peptide complex or an unusual botanical your brand is built around.
• Your **claims strategy** depends on a formula you can document end to end, including test data generated on your exact product.
• You are entering a market with **ingredient restrictions** that existing formulas do not meet, so a reformulation is needed anyway.
• **Exclusivity** matters: you do not want a near-identical product appearing under another label.
• You plan a **product family** and want a shared base that can be varied across several SKUs.

Stock formulation is often the better start when:

• You are **testing a market** and do not yet know what your customer wants in texture, scent or performance.
• Your differentiation comes from **positioning, packaging and community** rather than from chemistry.
• You need to launch with a **limited budget and a lean timeline**, and want to reserve custom work for a second generation.

Many brands that run successfully today launched on an adapted stock formula, learned from real customer feedback, and only then commissioned custom work for their hero product. Treat the choice as a business decision about risk and learning speed, not as a judgement on how serious your brand is. A good development partner will explain the trade-offs rather than pushing you toward the most complex route.

The brief: what your formulator needs from you

The quality of a custom formula is largely decided before any chemistry happens, in the brief. Vague briefs produce many sample rounds and frustration on both sides. A strong brief fits on two pages and answers these questions:

• **Who is the user?** Age range, skin type, climate they live in, routine they already follow. A serum for humid Southeast Asia and one for dry European winters are different products.
• **What is the primary benefit?** One main promise, stated in consumer language, plus any secondary benefits in order of priority.
• **Hero ingredients and exclusions.** Which actives you want featured, and which ingredients must be excluded for positioning or regulatory reasons, for example certain preservatives, fragrance allergens or animal-derived materials.
• **Sensory targets.** Texture, absorption speed, finish, scent direction or fragrance-free, colour. Reference two or three benchmark products you like and dislike, with reasons.
• **Packaging intent.** Dropper, airless, jar, tube. Packaging constrains the formula, especially for oxygen-sensitive actives.
• **Target markets.** Each market brings its own ingredient lists, labelling rules and documentation. Say where you plan to sell in the first two years.
• **Positioning and price tier.** Not a unit price, but the segment you are aiming at, which guides ingredient grade and complexity.
• **Claims you hope to make**, so the formulator can tell you early what data would be needed to support them.

If you cannot answer some of these yet, say so; a partner offering formula development can help you work through them in a discovery session. What you should avoid is handing over a list of twenty trendy ingredients and asking for all of them. A formula is a system, and the brief should describe the outcome you want, not dictate the recipe.

The stages: from feasibility to pilot batch

Custom development follows a fairly standard sequence in Thai OEM/ODM factories, even if the names differ. Knowing the stages helps you ask the right questions at each gate.

**1. Feasibility review.** The formulator checks your brief against ingredient availability, regulatory limits in your target markets, compatibility between actives, and the packaging you intend to use. You may be told that two ingredients should not share a formula, or that a claim will require data you did not plan for. This is the cheapest moment to change direction.

**2. Laboratory prototypes.** The lab produces small batches of one or more directions. You receive samples with a prototype code and a basic description of the system.

**3. Sample evaluation and iteration.** You evaluate texture, sensory feel, scent, colour and early performance impressions, ideally with a small panel of real target users, and send structured feedback. The lab adjusts and issues the next round. Most projects need several rounds; the number depends on how clear the brief was and how far the first prototype landed.

**4. Preliminary stability and compatibility.** Once a prototype is close, it goes through accelerated stability checks and packaging compatibility testing in the actual container you will use. Instability found here sends the formula back for adjustment.

**5. Formula freeze.** The formula is locked, the ingredient list is finalised in INCI format, and the specification sheet is agreed in writing.

**6. Pilot batch and scale-up.** A pilot batch is produced on production equipment to confirm the formula behaves the same at scale. Viscosity, colour and homogeneity are compared against the lab standard.

**7. Production.** After pilot approval, commercial batches are manufactured with quality control against the agreed specification.

Timelines for each stage depend on the complexity of the formula, the testing required and the responsiveness of both sides; they are confirmed by the manufacturer for each project rather than being fixed. The single biggest lever you control is the speed and clarity of your feedback at stage three.

Testing and documentation you should expect

A custom formula is only as good as the evidence behind it. Before you approve production, make sure you understand which tests are planned, who performs them, and what reports you will receive. The usual set for skincare includes:

• **Stability testing** across temperature and light conditions to confirm the product keeps its colour, odour, viscosity and pH through its intended shelf life.
• **Packaging compatibility** in the final container, because interactions between formula and packaging materials are a common source of late surprises.
• **Preservative efficacy testing**, often called a challenge test, to show the product resists microbial contamination during consumer use.
• **Microbiological testing** of batches.
• **Safety assessment** such as patch testing or a dermatological evaluation, depending on the market and on the claims you intend to make.
• **Performance or claims substantiation**, for example instrumental hydration measurements or consumer perception studies, only if you plan to use specific claims in marketing.
• **SPF and related testing** if the product is a sunscreen, which follows its own protocols.

On the documentation side, you should receive at minimum the final INCI list, a product specification, a sample certificate of analysis showing what is tested per batch, safety data for the finished product where applicable, and the manufacturer's statements regarding its quality standards such as GMP. For market entry, Thailand requires a cosmetic notification before sale, and other markets have their own frameworks, for example the product information file concept in the EU. Treat regulatory specifics as something to confirm with the relevant authority or a regulatory consultant for each market; a development partner experienced with export can prepare the technical parts of these dossiers, but responsibility for compliance in your market remains with the brand owner.

Who owns the formula? Clarify before the first sample

Ownership and confidentiality are the questions brand owners most often leave for later, and the ones that cause the most friction when a brand grows. Raise them before development starts and get the answers in writing.

• **Formula ownership.** In many OEM/ODM arrangements the manufacturer retains ownership of the formula and grants you the right to have it produced under your brand. In full custom development, ownership may be assigned to you, shared, or retained by the manufacturer with exclusivity provisions. All three models exist; what matters is that the contract states which one applies and what happens if you want to move production elsewhere.
• **Disclosure of the full formula.** Some manufacturers disclose the complete quantitative formula to the brand owner; others disclose the INCI list and specification but keep exact percentages confidential. Decide what level of disclosure you need, for example to satisfy regulators or future investors, and negotiate it up front.
• **Exclusivity.** If exclusivity on the finished formula matters to you, define its scope: by market, by channel, by time, or by product category. Open-ended exclusivity is rarely agreed and should not be expected.
• **Confidentiality.** A mutual non-disclosure agreement covering your brief, your brand plans and the manufacturer's technical know-how is normal practice.
• **Development fees and what they buy.** Clarify whether development fees cover ownership, a licence, or simply the lab work, and whether they are credited against later production.
• **Supply continuity.** Ask how raw material changes are handled, what notice you receive if an ingredient is discontinued, and who approves reformulation.

None of these points should be adversarial. Manufacturers who work regularly with international brands expect these questions and usually have standard positions. A partner who is vague about ownership or unwilling to put it in writing is giving you useful information about how the relationship will go later.

Choosing a development partner in Thailand

Thailand offers several kinds of partners for custom development, and the right one depends on how much of the work you want to manage yourself.

**Factories with in-house R&D.** Many Thai OEM/ODM factories have their own formulation laboratories and can take a brief through to production under one roof. Advantages include direct access to the chemist and tight integration between formula and production. You will need to manage packaging suppliers, regulatory work and logistics yourself, or confirm that the factory offers them.

**Independent formulation labs.** These develop a formula that you then take to a manufacturer. Useful when you want clear ownership and the freedom to choose production later, at the cost of coordinating two parties and a technology transfer step.

**Managed OEM/ODM partners.** Companies that manage the whole project through a network of partner factories, covering formulation, packaging, documentation and export under a single point of contact. 5FINE, for example, operates this way through partner GMP factories in Thailand and other countries; it suits brand owners who prefer one accountable partner over coordinating several vendors. The trade-off is less direct contact with the individual factory.

**Finding and comparing candidates.** Directories and B2B marketplaces that distinguish manufacturers from trading companies, such as THAIMOST, can help you build a shortlist; so can trade fairs and referrals. Whatever route you take, evaluate on these points:

• Evidence of **GMP or equivalent standards** at the facility that will actually produce your product.
• A **named chemist or technical lead** you can talk to directly.
• A clear, written **development process** with defined sample rounds and revision policy.
• Experience with your **target markets** and their documentation.
• Transparent positions on **ownership, disclosure and confidentiality**.
• Responsiveness during the enquiry phase, which predicts responsiveness during development.

Whether you work with an OEM manufacturer in Thailand directly or through a managed partner, the brand owner's job is the same: write a clear brief, give structured feedback, insist on documentation, and settle ownership early. Do that, and custom development becomes a controlled project rather than an open-ended experiment, and a sound foundation when you start your own brand or expand an existing one.