Payments · Skincare5 min readUpdated October 26, 2026

How to Start a Skincare Brand Online

The launch checklist for an online skincare business, in order: company, formulator, MoCRA, labels, claims, policies, payments, first 90 days.

Nick Bonnassies, CMO at Tagada · checked against 10 sources

Article summary

TL;DR

Set up the company, choose a formulator or private-label manufacturer, sort out MoCRA (registration and listing, or the small business exemption), write labels and cosmetic claims, publish clear policies, then pick how you take payments. Processors read your claims, before-and-after visuals and offers, so a brand that gets these right first gets approved faster and keeps its account. Plan cash for a possible reserve.

Cosmetics don't need FDA approval; claims to treat or change the body make a product a drug.
MoCRA: register facilities and list products unless exempt; report serious adverse events within 15 business days; put a US contact on the label.
Small businesses under $1,000,000 average annual sales are exempt from registration and listing, with exceptions.
Washington's ingredient ban covers products sold online into the state.
A beauty merchant reports Shopify reserving 20% of funds for 120 days.

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On this page

This guide is part of our hub on skincare payment processing. The full launch and growth plan: how to start and scale a skincare brand.

The launch checklist, in order

Step	What to do	Why before payments
1. Company	LLC or corporation, EIN, business bank account	Processors underwrite the entity
2. Formulator	Manufacturer or private label; ingredient lists, safety data	MoCRA safety substantiation2
3. MoCRA	Registration and listing, or document your exemption2	Shows you follow cosmetic rules
4. Labels	Ingredients, US contact2	Underwriters read labels
5. Claims	Cosmetic wording only1 3	Drug claims get refused
6. Visuals	Before-and-after with typical results9	Reviewed by processors and platforms
7. Policies and offer	Refund, shipping, contact; one-time or clear subscription	Trials raise risk5
8. Payments	Choose the processor and apply	Everything above is what they check

Fig. 1Eight launch steps, and what the processor checks at each

CompanyThe entity it underwrites
FormulatorSafety data
MoCRARegistration or exemption
LabelsIngredients, US contact
ClaimsCosmetic wording only
VisualsTypical results
PoliciesRefunds, clear offer
PaymentsAll of the above

Payments come last because they read everything before.

Based on the checklist above: MoCRA (FDA), 21 U.S.C. 321, FTC endorsement rules, Stripe's prohibited list.

Before you sell: legal basics

Cosmetic or drug: cleansing and beautifying is cosmetic; treating acne or affecting skin structure is a drug1 3.
SPF products are cosmetic and drug at once3.
MoCRA: registration and listing (unless exempt), adverse events within 15 business days, safety records, label contact2.
States: ingredient bans in California and Washington, among others4.
Marketplaces add their own approval rules: Amazon, eBay, Etsy and TikTok Shop.

Full rules: is it legal to sell skincare online?

Choose how you take payments

Option	Start	Risk	Good for
Stripe or Shopify Payments	Same day	Review later; Stripe typically pauses payouts 120 days on unacceptable risk6	Cosmetic claims, one-time sales
Underwritten merchant account	PayKings displays 24 hours on average; others a few days7	Terms known first	Subscriptions, paid traffic
Both, with routing	After two approvals	Backup if one stops	Brands with recurring revenue

Documents: ID, bank letter or voided check, 3 months of bank statements, processing history if any, site and marketing7. Without history: merchant accounts for new skincare brands.

Your first 90 days of payments

Weeks 1 to 2: test
Orders, refunds and cancellation; check the descriptor.
Weeks 3 to 6: watch
Disputes and refunds by product and channel.
Weeks 7 to 12: plan
A reserve review if history is clean; a second processor.

Cash: a 20% reserve held 120 days (what one beauty merchant reports on Shopify10) on $20,000 a month keeps about $16,000 aside. Budget for it: fees and reserves.

Subscriptions: terms before the card field, reminder at least 7 days before any trial ends, online cancellation8.

Tagada follows Visa and Mastercard rules and the laws that apply to payments.

Mistakes that close new accounts

Mistake	Why it hurts	Source
"Removes wrinkles", "treats acne"	Drug claims; Stripe's harmful claims line	FDA3, Stripe5
"Risk-free" cream trial into auto-ship	Unclear trials prohibited	Stripe5
Atypical before-and-after	Must disclose typical results	FTC9
Creator posts with cure claims	Your marketing, your account	FTC
A viral spike on a new account	Triggers a risk review	Processor practice

"Removes wrinkles", "treats acne"A drug claim, under Stripe's harmful claims line.Describe how skin looks and feels.
A "risk-free" trial into auto-shipAn unclear trial, prohibited by Stripe.Show the renewal price and send a reminder before the trial ends.
A viral spike on a new accountA trigger for a risk review.Plan cash for a reserve and keep a second processor ready.

How Tagada helps

Store, checkout and payments for a new skincare brand

TagadaPay underwrites each file, with enhanced review on regulated verticals
Store and checkout standalone, on Shopify, on WooCommerce or headless, with one-click upsells, order bumps, Apple Pay and Google Pay
Subscriptions with trials, billing cycles, retries and automatic recovery
Routing across Stripe, Adyen and TagadaPay, cascade on decline

Plans are on the pricing page.

Apply for processing

Updated on October 26, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What do I need to start a skincare business online?

A company with an EIN and bank account, a formulator or private-label supplier, MoCRA registration and listing or a documented exemption, labels with cosmetic claims, clear policies, and a processor that accepts your offers.

Do I need a license to sell skincare online?

There's no federal license and no FDA approval for cosmetics. MoCRA registration and listing apply unless you're exempt, and some states ban ingredients in products sold to them.

Can I start a skincare brand on Stripe or Shopify Payments?

Yes, with cosmetic claims and simple offers. Both review later; on unacceptable risk, Stripe typically pauses payouts for 120 days, and a beauty merchant reports a 20% Shopify reserve. Plan an underwritten account as you grow.

How much cash should I keep for payments at launch?

Beyond fees, plan for a reserve. At $20,000 a month, a 20% reserve held 120 days keeps about $16,000 aside at steady state. Ask your processor for its terms in writing.

Sources

Checked October 26, 2026

TagadaPay

Launch your skincare brand with payments that last

Tell us what you sell and how you sell it. Each application is underwritten, and approval is not guaranteed.

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01Tell us what you sell and how
02Underwriting reviews your business
03Process through TagadaPay alongside your other processors