The Modernization of Cosmetics Regulation Act of 2022 (MoCRA) represents a significant update in the regulation of cosmetic products in the United States. As small brands navigate this landscape, understanding what qualifies as a small business under MoCRA is crucial for compliance and growth. At J. Elle Innovations, we focus on supporting small cosmetic brands, including private label cosmetics suppliers and cosmetic contract manufacturers.
What Qualifies as a Small Business Under MoCRA?
Annual Revenue Threshold
According to MoCRA, a small business is generally defined by its annual revenue. Typically, this means businesses with gross sales under a specified limit (e.g., $1 million annually). This criterion is critical for companies looking to establish themselves without the burdens of extensive regulatory demands.
Employee Count
The number of employees also plays a role in defining a small business. Many guidelines set this limit at fewer than 150 employees. This metric helps distinguish personal brands from larger firms, allowing small cosmetic brands to thrive.
Business Structure
Small businesses can take various forms, including sole proprietorships and partnerships, making it easier for entrepreneurs to enter the market. Many small brands utilize private label products to sell without heavy initial investments, which aligns well with the MoCRA registration requirements.
Production Capacity
This criterion considers businesses that operate on a smaller scale, producing fewer units to meet consumer demands. Cosmetic contract manufacturers and private label cosmetic manufacturers often provide low MOQs that enable small brands to enter the market without sacrificing quality or compliance.
Understanding the qualifications for small businesses under MoCRA is vital for compliance and the effective launch of new products. By focusing on low MOQs, private label cosmetics suppliers, and cosmetic contract manufacturers, J. Elle Innovations is dedicated to helping small brands navigate these requirements. As small business owners embark on their journey, we’re here to offer industry insights, technical support, and the resources they need to flourish in the cosmetics market. Let’s grow your brand together!