The Ordinary: A Case Study in Radical Transparency

Company Snapshot

MetricValue
Founded2016 (Toronto, Canada)
ParentDECIEM (acquired by Estée Lauder 2021)
2025 Revenue~$2.2B USD
SKU Count100+
Price Range$5.90 – $29.00

What Made The Ordinary Disruptive?

1. Ingredient-First Naming

Instead of "Age-Defying Renewal Serum", they called it "Retinol 1% in Squalane".

  • Built consumer education into the product name
  • Created a "formulary" feel — like a pharmacy for skin
  • Made comparison shopping trivially easy

2. Clinical-Grade Pricing

  • Retinol competitors: $60–$120 for 30ml
  • The Ordinary: $7.90 for 30ml
  • Margin strategy: High volume + minimal packaging cost (dropper bottles)

3. No Marketing Spend (Initially)

  • Zero traditional advertising
  • Growth driven entirely by word-of-mouth + social media
  • Beauty influencers became unpaid evangelists

Key Numbers for Private Label Founders

LessonApplication for Your Brand
Simplicity winsFocus on 1 active ingredient per product
Transparency builds trustPublish your full INCI list + concentrations
Price disruptivelyTarget 50-70% below category average
Education = contentCreate ingredient-deep blog content (SEO gold!)

How to Replicate This Model with OEM

  1. Choose 5 hero ingredients (niacinamide, retinol, vitamin C, hyaluronic acid, salicylic acid)
  2. Work with an OEM factory that can produce clinical-style simple formulations
  3. Use minimalist packaging (amber glass droppers = ~$0.80/unit vs $2.50 for fancy pumps)
  4. Price at 40-60% margin while still undercutting competitors 30-50%
  5. Invest savings into content marketing (YouTube/TikTok ingredient education)
⚠️ Risk Note: The Ordinary model works because of massive scale. Small brands should use this as positioning inspiration, not exact replication. Start with 3-5 focused SKUs.

Build Your Own "Ordinary-Style" Brand →