U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934

For the quarterly period ended September 30, 2001

[_]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
       For the transition period from ____________ to ____________

                         Commission File Number 1-13856

                             SEL-LEB MARKETING, INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

           NEW YORK                                               11-3180295
(STATE OR OTHER JURISDICTION OF                               (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                               IDENTIFICATION NO.)

                      495 River Street, Paterson, NJ 07524
                    (Address of principal executive offices)
                                  973-225-9880
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report(s)), and (2) has
been subject to such filing requirements for the past 90 days.

                                Yes [X]   No [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,261,018 shares of common stock as
of November 13, 2001

Transitional Small Business Disclosure Format (check one):

                                Yes [ ]   No [X]



                     SEL-LEB MARKETING, INC. AND SUBSIDIARY





                                                                                   PAGE
                                                                                   ----
                                                                                
Part I - Financial Information

Item 1.    Financial Statements

           Condensed Consolidated Balance Sheets at September 30, 2001
           (Unaudited) and December 31, 2000                                         2

           Condensed Consolidated Statements of Income
           Nine Months Ended September 30, 2001 and 2000 (Unaudited)                 3

           Condensed Consolidated Statements of Income
           Three Months Ended September 30, 2001 and 2000 (Unaudited)                4

           Condensed Consolidated Statement of Changes in Stockholders' Equity
           Nine Months Ended September 30, 2001 (Unaudited)                          5

           Condensed Consolidated Statements of Cash Flows
           Nine Months Ended September 30, 2001 and 2000 (Unaudited)                 6

           Notes to Condensed Consolidated Financial Statements                     7-9

Item 2.    Management's Discussion and Analysis or Plan of Operation               10-13


Part II - Other Information

Item 6.    Exhibits and Reports on Form 8-K                                         14

           Signatures                                                               15




                                       1




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 2001 AND DECEMBER 31, 2000




                                                                       September      December
                                       ASSETS                          30, 2001       31, 2000
                                       ------                        ------------   ------------
                                                                     (Unaudited)      (Note 1)
                                                                              
Current assets:
     Cash and cash equivalents                                       $     72,887   $    213,920
     Accounts receivable, less allowance for doubtful
         accounts of $289,285 and $195,274                              7,328,921      4,951,151
     Inventories                                                        9,986,501      9,798,856
     Deferred tax assets, net                                             351,990        296,875
     Prepaid expenses and other current assets                            706,255        618,676
                                                                     ------------   ------------
              Total current assets                                     18,446,554     15,879,478
Property and equipment, at cost, net of accumulated depre-
     ciation and amortization of $1,107,440 and $1,123,601                194,172        328,634
Other assets                                                              310,625        312,814
                                                                     ------------   ------------

              Totals                                                 $ 18,951,351   $ 16,520,926
                                                                     ============   ============

              LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Note payable under line of credit                               $  3,958,836   $  3,404,505
     Current portion of long-term debt                                    406,657        859,949
     Accounts payable                                                   3,002,471      2,598,964
     Accrued expenses and other liabilities                             1,921,026        472,804
                                                                     ------------   ------------
              Total current liabilities                                 9,288,990      7,336,222
Long-term debt, net of current portion                                    735,658        928,307
                                                                     ------------   ------------
              Total liabilities                                        10,024,648      8,264,529
                                                                     ------------   ------------

Commitments and contingencies

Stockholders' equity:
     Preferred stock, $.01 par value; 10,000,000 shares
         authorized; none issued                                           --             --
     Common stock, $.01 par value; 40,000,000 shares
         authorized; 2,261,018 shares issued and outstanding               22,611         22,611
     Additional paid-in capital                                         6,496,359      6,496,359
     Retained earnings                                                  2,446,733      1,779,427
     Less receivable in connection with equity transactions               (39,000)       (42,000)
                                                                     ------------   ------------
              Total stockholders' equity                                8,926,703      8,256,397
                                                                     ------------   ------------

              Totals                                                 $ 18,951,351   $ 16,520,926
                                                                     ============   ============



See Notes to Condensed Consolidated Financial Statements.

                                       2




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                   (Unaudited)





                                                                     2001           2000
                                                                 ------------   ------------

                                                                          
Net sales                                                        $ 15,584,778   $ 16,328,035
                                                                 ------------   ------------

Operating expenses:
     Cost of sales                                                 10,931,892     11,834,212
     Selling, general and administrative expenses                   3,506,409      3,342,086
                                                                 ------------   ------------
         Totals                                                    14,438,301     15,176,298
                                                                 ------------   ------------

Operating income                                                    1,146,477      1,151,737
                                                                 ------------   ------------

Other income (expense):
     Interest expense, net of interest income of $2,016 in 2000      (311,829)      (313,694)
     Income from litigation settlement                                280,000
     Gain on sales of property and equipment                           18,950
                                                                 ------------   ------------
         Totals                                                       (12,879)      (313,694)
                                                                 ------------   ------------

Income before provision for income taxes                            1,133,598        838,043

Provision for income taxes                                            466,292        318,450
                                                                 ------------   ------------

Net income                                                       $    667,306   $    519,593
                                                                 ============   ============

Net earnings per share:
     Basic                                                               $.30           $.23
                                                                         ====           ====

     Diluted                                                             $.29           $.21
                                                                         ====           ====

Weighted average shares outstanding:
     Basic                                                          2,261,018      2,261,018
                                                                 ============   ============

     Diluted                                                        2,319,828      2,422,803
                                                                 ============   ============







See Notes to Condensed Consolidated Financial Statements.

                                       3



                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                   (Unaudited)




                                                                        2001           2000
                                                                    -----------     -----------
                                                                              
Net sales                                                           $ 6,022,532     $ 6,300,469
                                                                    -----------     -----------

Operating expenses:
     Cost of sales                                                    4,008,830       4,212,819
     Selling, general and administrative expenses                     1,221,621       1,313,607
                                                                    -----------     -----------
         Totals                                                       5,230,451       5,526,426
                                                                    -----------     -----------

Operating income                                                        792,081         774,043
                                                                    -----------     -----------

Other income (expense):
     Interest expense, net of interest income of $1,343 in 2000         (85,383)       (125,750)
     Gain on sales of property and equipment                             18,950
                                                                    -----------     -----------
         Totals                                                         (66,433)       (125,750)
                                                                    -----------     -----------

Income before provision for income taxes                                725,648         648,293

Provision for income taxes                                              303,112         242,550
                                                                    -----------     -----------

Net income                                                          $   422,536     $   405,743
                                                                    ===========     ===========

Net earnings per share:
     Basic                                                                 $.19            $.18
                                                                           ====            ====

     Diluted                                                               $.18            $.17
                                                                           ====            ====

Weighted average shares outstanding:
     Basic                                                            2,261,018       2,261,018
                                                                    ===========     ===========

     Diluted                                                          2,322,071       2,376,035
                                                                    ===========     ===========







See Notes to Condensed Consolidated Financial Statements.

                                       4




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      NINE MONTHS ENDED SEPTEMBER 30, 2001
                                   (Unaudited)





                                                                                 Receivable in
                                    Common Stock        Additional                 Connection      Total
                               ---------------------     Paid-in       Retained   With Equity   Stockholders'
                                 Shares      Amount      Capital       Earnings   Transactions     Equity
                               ---------    --------    ----------    ----------  ------------   ----------

                                                                               
Balance, January 1, 2001       2,261,018    $ 22,611    $6,496,359    $1,779,427    $(42,000)    $8,256,397

Decrease in receivable in
    connection with equity
    transaction                                                                        3,000          3,000

Net income                                                               667,306                    667,306
                               ---------    --------    ----------    ----------    --------     ----------

Balance, September 30, 2001    2,261,018    $ 22,611    $6,496,359    $2,446,733    $(39,000)    $8,926,703
                               =========    ========    ==========    ==========    ========     ==========








See Notes to Condensed Consolidated Financial Statements.

                                       5




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
                                   (Unaudited)



                                                                               2001             2000
                                                                            -----------     -----------
                                                                                      
Operating activities:
     Net income                                                             $   667,306     $   519,593
     Adjustments to reconcile net income to net cash
         used in operating activities:
         Depreciation and amortization                                          173,978         213,128
         Provision for doubtful accounts                                        133,425          85,915
         Gain on sales of property and equipment                                (18,950)
         Deferred income taxes                                                  (55,115)        (45,385)
         Changes in operating assets and liabilities:
              Accounts receivable                                            (2,511,195)     (1,504,245)
              Inventories                                                      (187,645)     (2,003,580)
              Prepaid expenses and other current assets                         (87,579)        (24,494)
              Other assets                                                      (23,656)         18,612
              Accounts payable, accrued expenses and other
                  liabilities                                                 1,851,729       1,469,486
                                                                            -----------     -----------
                     Net cash used in operating activities                      (57,702)     (1,270,970)
                                                                            -----------     -----------

Investing activities:
     Purchases of property and equipment                                        (45,767)        (40,289)
     Proceeds from sales of property and equipment                               51,046
                                                                            -----------     -----------
                     Net cash provided by (used in) investing activities          5,279         (40,289)
                                                                            -----------     -----------

Financing activities:
     Proceeds from note payable under line of credit, net
         of repayments                                                          554,331       1,412,097
     Repayments of long-term debt                                              (645,941)       (196,614)
     Decrease in receivable in connection with equity transactions                3,000           3,000
                                                                            -----------     -----------
                     Net cash provided by (used in) financing activities        (88,610)      1,218,483
                                                                            -----------     -----------

Net decrease in cash and cash equivalents                                      (141,033)        (92,776)

Cash and cash equivalents, beginning of period                                  213,920         158,032
                                                                            -----------     -----------

Cash and cash equivalents, end of period                                    $    72,887     $    65,256
                                                                            ===========     ===========






See Notes to Condensed Consolidated Financial Statements.

                                       6




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1 - Organization and basis of presentation:
            In the opinion of management,  the accompanying  unaudited condensed
            consolidated   financial   statements   reflect   all   adjustments,
            consisting of normal recurring accruals, necessary to present fairly
            the financial  position of Sel-Leb Marketing,  Inc.  ("Sel-Leb") and
            its 80%-owned  subsidiary,  Ales  Signature,  Ltd.  ("Ales"),  as of
            September 30, 2001,  their  results of  operations  for the nine and
            three months ended  September  30, 2001 and 2000,  their  changes in
            stockholders'  equity for the nine months ended  September  30, 2001
            and their cash flows for the nine months  ended  September  30, 2001
            and 2000.  Sel-Leb and Ales are  referred to together  herein as the
            "Company."   Information  included  in  the  condensed  consolidated
            balance  sheet as of  December  31, 2000 has been  derived  from the
            audited  consolidated  balance sheet  included in the Company's Form
            10-KSB  for  the  year  ended   December  31,  2000  (the  "10-KSB")
            previously  filed with the Securities and Exchange  Commission  (the
            "SEC").  Pursuant  to rules  and  regulations  of the  SEC,  certain
            information   and   disclosures   normally   included  in  financial
            statements   prepared  in  accordance  with  accounting   principles
            generally  accepted  in the  United  States  of  America  have  been
            condensed or omitted from these  consolidated  financial  statements
            unless  significant  changes  have taken  place since the end of the
            most recent  fiscal year.  Accordingly,  these  unaudited  condensed
            consolidated financial statements should be read in conjunction with
            the  consolidated   financial  statements,   notes  to  consolidated
            financial statements and the other information in the 10-KSB.

            The consolidated results of operations for the nine and three months
            ended  September  30,  2001 are not  necessarily  indicative  of the
            results to be expected for the full year ending December 31, 2001.

Note 2 - Earnings (loss) per share:
            As  further  explained  in Note 1 in the  10-KSB,  the  Company  has
            adopted  the   provisions  of  Statement  of  Financial   Accounting
            Standards No. 128,  "Earnings per Share" ("FAS 128"),  which require
            the presentation of "basic" earnings (loss) per common share and, if
            appropriate,  "diluted"  earnings per common share.  Basic  earnings
            (loss) per share is  calculated by dividing net income (loss) by the
            weighted  average  number of common shares  outstanding  during each
            period.  The calculation of diluted earnings per share is similar to
            that of basic  earnings per share,  except that the  denominator  is
            increased  to include the number of  additional  common  shares that
            would  have been  outstanding  if all  potentially  dilutive  common
            shares,  such as those  issuable  upon the exercise of stock options
            and warrants, were issued during the period.

                                       7




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - Earnings (loss) per share (concluded):
            In  computing  diluted  earnings  per  share  for the nine and three
            months ended  September 30, 2001 and 2000,  the assumed  exercise of
            all  of  the  Company's  outstanding  stock  options  and  warrants,
            adjusted for the  application  of the treasury  stock method,  would
            have  increased  the  weighted   average  number  of  common  shares
            outstanding as shown in the table below:



                                                           Nine Months Ended          Three Months Ended
                                                               September 30,               September 30,
                                                       ----------------------------- -----------------------
                                                          2001            2000          2001         2000
                                                       ----------      ----------    ----------   ----------
                                                                                        
            Basic weighted average shares
               outstanding                               2,261,018       2,261,018     2,261,018    2,261,018
            Shares arising from assumed
               exercise of:
               Stock options                                58,810         119,721        61,053       95,233
               Warrants                                                     42,064                     19,784
                                                        ----------      ----------    ----------   ----------

            Diluted weighted average shares
               outstanding                               2,319,828       2,422,803     2,322,071    2,376,035
                                                        ==========      ==========    ==========   ==========



Note 3 - Note payable under revolving line of credit:
            As further explained in Note 3 in the 10-KSB,  during December 1998,
            the Company entered into a loan agreement  pursuant to which Merrill
            Lynch  Business  Financial  Services,   Inc.  ("Merrill  Lynch")  is
            providing the Company with a credit facility (the  "Facility").  The
            Facility  consists  of a  revolving  line of credit  for  borrowings
            against the Company's  eligible accounts  receivable and inventories
            and three term loans (see Note 4 in the 10-KSB). As of September 30,
            2001,  the maximum amount the Company could borrow under the line of
            credit was $4,150,000 through October 31, 2001. Borrowings under the
            revolving line of credit,  bear interest  which is payable  monthly,
            and totaled $3,958,836 at September 30, 2001. Based on amendments to
            the loan agreement, on October 31, 2001 the revolving line of credit
            was extended to October 31, 2002, with maximum borrowings reduced to
            $3,800,000, and interest, payable monthly, at 2.75% above the 30 day
            London  Interbank  Offering Rate.  Outstanding  borrowings under the
            Facility are secured by substantially all of the Company's assets.

Note 4 - Stock options and warrants:
            Descriptions   of  the  Company's   stock  option  plans  and  other
            information  related to stock  options and  warrants are included in
            Note 5 in the 10-KSB. No options or warrants were granted, exercised
            or cancelled  during the nine and three months ended  September  30,
            2001.


                                       8




                     SEL-LEB MARKETING, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 5 - Litigation settlement:
            On May 30, 2001,  the Company  entered into an agreement to settle a
            legal  action it had  brought  against one of its  licensors  for an
            alleged breach of contract.  The accompanying condensed consolidated
            statements  of income for the nine months ended  September  30, 2001
            include the Company's  income from the litigation  settlement  which
            totaled $280,000.

Note 6 - Segment information:
            The Company has adopted the  provisions  of  Statement  of Financial
            Accounting  Standards  No. 131,  "Disclosures  about  Segments of an
            Enterprise and Related  Information"  ("SFAS 131").  Pursuant to the
            provisions  of SFAS 131, the Company is reporting  segment sales and
            gross  margins  in  the  same  format   reviewed  by  the  Company's
            management  (the  "management   approach").   The  Company  has  two
            reportable segments:  "Opportunity" and "Cosmetics". The Opportunity
            segment  is  comprised  of  the   operations   connected   with  the
            acquisition,  sale and  distribution  of  name-brand  and  off-brand
            products  which are purchased  from  manufacturers,  wholesalers  or
            retailers as a result of  close-outs,  overstocks  and/or changes in
            the  packaging  of  brand  name  items.  The  Cosmetics  segment  is
            comprised of the  acquisition,  sale and  distribution  of all other
            products,  including "celebrity endorsed" and "tie-in" cosmetics and
            health  and  beauty  aid   products   and  designer  and  all  other
            fragrances.

            Net sales,  cost of sales and other related segment  information for
            the nine and three months ended September 30, 2001 and 2000 follows:




                                                           Nine Months Ended            Three Months Ended
                                                             September 30,                 September 30,
                                                      ---------------------------   -------------------------
                                                          2001           2000          2001          2000
                                                      ------------   ------------   -----------   -----------
                                                                                      
            Net sales:
                Opportunity                           $  6,894,847   $  7,194,067   $ 2,698,086   $ 2,676,824
                Cosmetics                                8,689,931      9,133,968     3,324,446     3,623,645
                                                      ------------   ------------   -----------   -----------
                       Total net sales                  15,584,778     16,328,035     6,022,532     6,300,469
                                                      ------------   ------------   -----------   -----------

            Cost of sales:
                Opportunity                              4,155,837      4,802,928     1,520,053     1,649,757
                Cosmetics                                6,776,055      7,031,284     2,488,777     2,563,062
                                                      ------------   ------------   -----------   -----------
                       Total cost of sales              10,931,892     11,834,212     4,008,830     4,212,819

            Selling, general and administrative
                expenses                                 3,506,409      3,342,086     1,221,621     1,313,607
                                                      ------------   ------------   -----------   -----------
                       Total operating expenses         14,438,301     15,176,298     5,230,451     5,526,426
                                                      ------------   ------------   -----------   -----------

            Operating income                             1,146,477      1,151,737       792,081       774,043
                                                      ------------   ------------   -----------   -----------

            Other income (expense):
                Interest expense, net                     (311,829)      (313,694)      (85,383)     (125,750)
                Income from litigation settlement          280,000
                Gain on sales of property and
                    equipment                               18,950                       18,950
                                                      ------------   ------------   -----------   -----------
                       Total other income (expense)        (12,879)      (313,694)      (66,433)     (125,750)
                                                      ------------   ------------   -----------   -----------

            Income before provision for income taxes  $  1,133,598   $    838,043   $   725,648   $   648,293
                                                      ============   ============   ===========   ===========


                                       9



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion  and analysis of the Company's  results of operations,
liquidity  and  financial  condition  should  be read in  conjunction  with  the
Condensed  Consolidated  Financial  Statements  of the Company and related notes
thereto.  This Quarterly Report on Form 10-QSB contains certain  forward-looking
statements,  including  statements  concerning  the  adequacy  of the  Company's
sources of cash to finance  its current and future  operations.  Actual  results
could differ materially from those projected in the  forward-looking  statements
due to a number of factors,  including but not limited to general  trends in the
retail industry (both general as well as electronic outlets), the ability of the
Company to extend its financing arrangements (or obtain satisfactory alternative
financing) on favorable terms, or at all beyond the term of the recently renewed
operating line of credit,  the ability of the Company to successfully  implement
its expansion plans,  consumer  acceptance of any products developed and sold by
the  Company,  the  ability of the Company to develop  its  "celebrity"  product
business, the ability of the Company to sell its specially purchased merchandise
at favorable  prices,  on a timely basis or at all, and other  factors set forth
herein or in reports and other  documents  filed by the Company with the SEC. In
addition,  quarterly  results in the  Company's  two  business  segments  do not
necessarily indicate trends in the Company's overall business operations, due to
the  timing of  special  purchases,  special  sales  and large  sales to any one
particular customer.

The Company has two  principal  business  segments  (see Note 6 to the Company's
Condensed  Consolidated  Financial  Statements  -  Unaudited) - Opportunity  and
Cosmetics.

Consolidated  Results of  Operations - Nine  months  Ended  September  30,  2001
Compared to the Nine Months Ended September 30, 2000:




                                              September 30,  September 30,
                                                  2001           2000         $ Change
                                                  ----           ----         --------
                                                                    
Net sales:
    Opportunity                               $ 6,894,847    $ 7,194,067     $(299,220) (A)
    Cosmetics                                 $ 8,689,931    $ 9,133,968     $(444,037) (B)
                                              -----------    -----------     ---------

               Total net sales                $15,584,778    $16,328,035     $(743,257)
                                              -----------    -----------     ---------

Cost of sales:
    Opportunity                               $ 4,155,837    $ 4,802,928     $(647,091) (C)
    Cosmetics                                 $ 6,776,055    $ 7,031,284     $(255,229) (D)
                                              -----------    -----------     ---------

              Total cost of sales             $10,931,892    $11,834,212     $(902,320)

Selling, general and administrative expenses  $ 3,506,409    $ 3,342,086     $ 164,323  (E)
                                              -----------    -----------     ---------

              Total operating expenses        $14,438,301    $15,176,298     $(737,997)
                                              -----------    -----------     ---------

Operating income                              $ 1,146,477    $ 1,151,737     $  (5,260)
                                              -----------    -----------     ---------

Other income                                  $   280,000    $         0     $ 280,000  (F)
Interest expense, net                         $  (311,829)   $  (313,694)    $   1,865  (G)
Gain on Sale of property and equipment        $    18,950    $         0     $  18,950
                                              -----------    -----------     ---------


              Total Other income (expense)    $   (12,879)   $  (313,694)    $ 300,815
                                              -----------    -----------     ---------


Income before income taxes                    $ 1,133,598    $   838,043     $ 295,555
                                              ===========    ===========     =========



(A)   The "Opportunity" segment of our business is comprised of the acquisition,
      sale and  distribution  of  name-brand  and off-brand  products  which are
      purchased from either manufacturers, wholesalers, or retailers as a result
      of close-outs,  overstocks and/or change-of-packaging of name-brand items.
      The  net  decrease  in  sales  in  this  segment  of  our  business,   was
      approximately $299,000, and

                                       10


      resulted primarily from management's  continuing,  conscious  decisions to
      restrict sales to companies that  management  feels may pose severe credit
      risks.  This was partially  offset by the  introduction  during the second
      quarter  of 2000  of a line  of  specially  purchased  merchandise,  which
      increased this  segment's  overall sales during the first quarter of 2001,
      and the  introduction  of  another,  newly  developed  line  of  products,
      introduced during the third quarter of 2001.

(B)   The  "Cosmetic"  segment of our business is comprised of the  acquisition,
      sale  and  distribution  of  all  other  products,   including  "celebrity
      endorsed"  and "tie-in"  cosmetics  and health and beauty aid products and
      designer and all other  fragrances.  Sales of certain  components  of this
      segment  increased as a result of increased sales in the electronic  media
      portion of the business, as well as the successful continued  introduction
      of new products and development of new customers.  However,  this increase
      did not offset the  reduction  in sales  compared  to the same period last
      year for a specialty  fragrance line, which was completely sold out during
      the year  2000,  which,  in the first  nine  months of 2000,  had sales of
      approximately $ 1,400,000

(C)   Cost of sales for the "Opportunity" segment of our business decreased from
      approximately  67% of sales in 2000 to 60% of sales in 2001. This decrease
      resulted primarily from significantly higher margins on the sale of a line
      of specially purchased merchandise, which was introduced during the second
      quarter of 2000,  further  improved by the  introduction  during the third
      quarter  of  2001 of a  newly  developed  line  of  products  which  yield
      significantly higher margins.

(D)   Cost of sales for the "Cosmetic" segment of our business was approximately
      77% of sales for the nine months ended  September  30, 2000 as compared to
      78% for the  nine  months  ended  September  30,  2001.  The  decrease  of
      approximately $255,000 resulted primarily from lower sales.

(E)   Selling,  general  and  administrative  expenses  consist  principally  of
      payroll, rent, commissions,  royalties, insurance,  professional fees, and
      travel and promotional expenses. The increase during the nine months ended
      September  30,  2001 versus the nine months  ended  September  30, 2000 is
      primarily  the result of higher costs due to more sales being made through
      outside  sales  agencies  and the  electronic  media,  which  have  higher
      associated selling expenses.

(F)   Other income  represents  proceeds  from the  settlement of a legal action
      brought  against one of the Company's  licensors for an alleged  breach of
      contract.

(G)   The  decrease  in  interest  expense  during the nine month  period  ended
      September  30, 2001 versus the nine month period ended  September 30, 2000
      results  primarily from lowered  overall  borrowings and reductions in the
      borrowing.

Consolidated  Results of  Operations -- Three  months Ended  September  30, 2001
Compared to the Three Months Ended September 30, 2000:



                                              September 30,     September 30,
                                                  2001              2000         $ Change
                                                  ----              ----         --------
                                                                      
Net sales:
    Opportunity                                $2,698,086        $2,676,824     $  21,262  (A)
    Cosmetics                                  $3,324,446        $3,623,645     $(299,199) (B)
                                               ----------        ----------     ---------

                 Total net sales               $6,022,532        $6,300,469     $(277,937)
                                               ----------        ----------     ---------

Cost of sales:
    Opportunity                                $1,520,053        $1,649,757     $(129,704) (C)
    Cosmetics                                  $2,488,777        $2,563,062     $ (74,285) (D)
                                               ----------        ----------     ---------

                 Total cost of sales           $4,008,830        $4,212,819     $(203,989)



                                       11





                                                     September 30,     September 30,
                                                         2001              2000         $ Change
                                                         ----              ----         --------
                                                                                

Selling, general and administrative expenses          $1,221,621        $1,313,607     $ (91,986)(E)
                                                      ----------        ----------     ---------

                 Total operating expenses             $5,230,451        $5,526,426     $(295,975)
                                                      ----------        ----------     ---------

Operating income                                      $  792,081        $  774,043     $  18,038
                                                      ----------        ----------     ---------

Interest expense, net                                 $  (85,383)       $ (125,750)    $  40,367 (F)
Gain on Sale of property and equipment                $   18,950        $        0     $  18,950
                                                      ----------        ----------     ---------


                  Total other Income (Expense)        $  (66,433)       $ (125,750)    $  59,317
                                                      ----------        ----------     ---------

Income before income taxes                            $  725,648        $  648,293     $  77,355
                                                      ==========        ==========     =========


(A)  The net  increase in sales of the  Opportunity  segment of our business was
     approximately $21,000.

(B)  The net  sales of the  Cosmetics  segment  decreased  as a result  of lower
     cosmetics  sales,  partially  offset by increases in the  electronic  media
     segment.

(C)  Cost of sales for the "Opportunity"  segment of our business decreased from
     approximately  62% of sales in 2000 to 56% of sales in 2001.  This decrease
     resulted primarily from  significantly  higher profit margins on continuing
     sales of specially  purchased  merchandise,  and, sales of newly  developed
     products introduced during the third quarter of 2001, which also yield high
     profit margins.

(D)  Cost of sales for the "Cosmetic"  segment of our business was approximately
     71% of sales for the three months ended  September  30, 2000 as compared to
     75% for the three months ended  September 30, 2001. The decrease in margins
     for this segment resulted  primarily from the Company's decision to provide
     sales at lower  margins to  customers  with whom the  Company is hopeful of
     doing  significant  business in the future.  This  decrease  was  partially
     offset by increased sales in the electronic  media portion of our business,
     which generally yields a higher gross profit margin.

(E)  The decrease in selling,  general and  administrative  expenses  during the
     three  months  ended  September  30,  2001  versus the three  months  ended
     September  30,  2000 is  primarily  the  result of  managements  continuing
     efforts at monitoring and controlling these costs.

(F)  The  decrease  in interest  expense  during the three  month  period  ended
     September  30, 2001 versus the three month period ended  September 30, 2000
     results  primarily from lower overall  borrowings  coupled with significant
     reductions in the borrowing rate.

Liquidity and Capital Resources

At  September  30,  2001 we had  working  capital  of  approximately  $9,158,000
including cash and cash  equivalents  of  approximately  $73,000.  Cash and cash
equivalents  decreased  during the nine  months  ended  September  30, 2001 from
approximately $214,000 to $73,000 as more fully discussed below.

During the nine months ended September 30, 2001 we used approximately $58,000 of
cash  in our  operations,  primarily  to  increase  inventory  by  approximately
$188,000,  in order to meet anticipated sales demands.  The increase in accounts
receivable  of  approximately  $2,511,000  was  funded by  operating  profits of
approximately  $667,000 and increases in accounts payable,  accrued expenses and
other liabilities of approximately $1,851,000.

In  addition,   during  the  nine  months  ended  September  30,  2001  we  used
approximately $89,000 in our financing activities,  primarily in a net repayment
of our debt.

                                       12


Our cash and cash equivalent position of approximately  $73,000 at September 30,
2001 result primarily from various financing  activities.  In December,  1998 we
entered  into  a  credit  facility  ("Facility")  with  Merrill  Lynch  Business
Financial  Services,  Inc. ("Merrill Lynch"), as more fully described in Notes 3
and 4 to the annual report which has been previously  filed on Form 10-KSB,  and
in Note 3 of the Condensed  Consolidated  Financial  Statements at September 30,
2001. At September 30, 2001, the credit facility provided for the following:

     1)  A  revolving  line of credit  with  maximum  borrowings  of  $4,150,000
         against the Company's  eligible  accounts  receivable  and  inventories
         through  October 31,  2001.  At  September  30, 2001 we had  $3,958,836
         outstanding  under the  revolving  line of credit,  representing  a net
         increase  in our  borrowings  under  the  revolving  line of  credit of
         $554,331 from December 31, 2000.

     2)  A $900,000  term loan  originated  in December  1998 payable in monthly
         installments  of $10,714 plus interest  through January 2006. This term
         loan had an outstanding balance of $546,427 as of September 30, 2001.

     3)  A $500,000  term loan  originated  in October  1999  payable in monthly
         installments of $8,333 plus interest  through  November 2004. This term
         loan had an outstanding balance of $316,669 as of September 30, 2001.

     4)  A $600,000  term loan  originated  in December  2000 payable in monthly
         installments of $50,000 plus interest  through December 2001. This term
         loan had an outstanding balance of $150,000 as of September 30, 2001.

Each of the aforementioned  term loans with Merrill Lynch require interest to be
paid monthly at 2.65% above the 30-day  commercial paper rate (an effective rate
of 5.32% at September 30, 2001).

Effective  October 31, 2001, the Company  obtained an extension of its revolving
line of credit through October 31, 2002. The maximum borrowing under the renewed
line of credit is  $3,800,000,  with  interest to be paid monthly at the rate of
2.75% above the 30 day London Interbank Offering Rate.

In addition to the Merrill  Lynch credit  facility,  on  September  26, 1997 the
Paterson  Restoration  Corporation  provided us with a $100,000 term loan, which
bears  interest at 6% and  provides  for monthly  installments  in the amount of
$1,461  through  October 1, 2004. On December 28, 1999 the Paterson  Restoration
Corporation  provided  us with an  additional  $100,000  term loan,  which bears
interest at 6% and provides for monthly  installments  of $1,461 through January
1, 2007. As of September 30, 2001 $49,324 and $79,895 were outstanding under the
1997 loan and the 1999 loan, respectively.

Pursuant to the terms of the term loans, we made principal  payments of $645,941
during the nine months ended September 30, 2001.

As of November 13, 2001,  the  outstanding  balance under the revolving  line of
credit  was  $3,432,424  and  under  the  term  loans,  including  the  Paterson
Restoration Corporation was $999,657.

The Company anticipates that its working capital, together with anticipated cash
flow from the Company's operations,  will be sufficient to satisfy the Company's
cash  requirements for at least twelve months.  In the event the Company's plans
change,  due to unanticipated  expenses or difficulties or otherwise,  or if the
working  capital and  projected  cash flow  otherwise are  insufficient  to fund
operations,  the  Company  could  be  required  to seek  financing  sooner  than
currently anticipated. Except for the renewed Facility, which expires on October
31,  2002,  and the term loans  under the  Facility,  the Company has no current
arrangements with respect to, or sources of, financing.  Accordingly,  there can
be no assurance that financing will be available to the Company when needed,  on
commercially  reasonable  terms,  or at all. The  Company's  inability to obtain
adequate  financing  when  needed  could have a material  adverse  effect on the
Company. In addition, any equity financing obtained by the Company could involve
substantial dilution to the interests of the Company's stockholders.


                                       13



PART II OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

A.      Exhibits

10.1    Extension of WCMA Line of Credit


B.      Reports on Form 8-K
        No reports on Form 8-K were filed by the registrant during the three
        month period ended September 30, 2001.

                                       14



                                   Signatures

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                           SEL-LEB MARKETING, INC.

                           /s/ Jack Koegel
                           ---------------

                           Jack Koegel
                           Vice Chairman and Chief Operating Officer

                           /s/ George Fischer
                           ------------------

                           George Fischer
                           Chief Financial Officer
                           (As principal financial and accounting officer)



November 13, 2001

                                       15



Exhibit 10.1 Extension of WCMA Line of Credit.




                                  Exhibit 10.1

                                                Private Client Group

                                                MERRILL LYNCH BUSINESS
                                                FINANCIAL SERVICES INC.
                                                222 North LaSalle Street
                                                17th Floor
                                                Chicago, Illinois 60601
                                                (312) 499-3057
[MERRILL LYNCH LOGO]                            FAX: (312) 499-3256

                                                October 25, 2001

Sel-Leb Marketing, Inc.
495 River Street
Paterson, NJ 07524

          RE: LOAN DOCUMENTS AMENDMENT AND EXTENSION

Ladies & Gentlemen:

This Letter Agreement will serve to confirm certain  agreements of Merrill Lynch
Business  Financial   Services  Inc.  ("MLBFS")  and  Sel-Leb  Marketing,   Inc.
("Customer")  with  respect to: (i) that certain WCMA AND TERM LOAN AND SECURITY
AGREEMENT  NO.  9811551601  between MLBFS and Customer  (including  any previous
amendments and extensions thereof),  and (ii) all other agreements between MLBFS
and  Customer  or any  party  who has  guaranteed  or  provided  collateral  for
Customer's   obligations  to  MLBFS  (a  "Guarantor")  in  connection  therewith
(collectively,  the "Loan  Documents").  Capitalized  terms used  herein and not
defined herein shall have the meaning set forth in the Loan Documents.

Subject to the terms hereof,  effective as of the  "Effective  Date" (as defined
below), the Loan Documents are hereby amended as follows:

(a) The "Maturity Date" of the WCMA Line of Credit is hereby extended to October
31, 2002.

(b) The term  "Maximum  WCMA Line of Credit"  shall mean an amount  equal to the
lesser of: (A) 80% of Customer's  domestic  Accounts and Chattel Paper, as shown
on its regular books and records  (excluding  Accounts over 90 days old, Chattel
Paper with  installments  or other sums more than 90 days past due, and Accounts
and  Chattel  Paper  directly  or  indirectly  due from any person or entity not
domiciled  in the  continental  United  States,  Alaska or  Hawaii,  or from any
shareholder,  officer or employee of Customer or any affiliated entity) plus 50%
of  Customer's  Inventory,  as shown on its regular  books and records,  up to a
maximum  of  $2,750,000.00,  and  LESS  the  aggregate  outstanding  balance  of
Customer's  Term  Loan  Nos.  9811551601,  9911550701,  and  0012552001,  or (B)
$3,800,000.00.

(c) The term  "Interest  Rate" shall mean a variable  per annum rate of interest
equal to the sum of 2.75% and the One-Month LIBOR. "One-Month LIBOR" shall mean,
as of the date of any  determination,  the  interest  rate  then  most  recently
published  in the  "Money  Rates"  section  of THE WALL  STREET  JOURNAL  as the
one-month London Interbank Offered Rate. The Interest Rate will change as of the
date of  publication  in THE WALL STREET  JOURNAL of a  One-Month  LIBOR that is
different from that  published on the preceding  Business Day. In the event that
THE WALL STREET  JOURNAL  shall,  for any  reason,  fail or cease to publish the
One-Month  LIBOR,  MLBFS will choose a reasonably  comparable index or source to
use as the basis for the Interest Rate.




                                  MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

Sel-Leb Marketing, Inc.
October 25, 2001
Page No. 2

(d) The "Line Fee" for the period ending October 31, 2002,  shall be $38,000.00.
Customer  hereby  authorizes  and  directs  MLBFS to charge  said amount to WCMA
Account No. 885-07E38 on or at any time after the Effective Date

Except as expressly  amended  hereby,  the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.

By its execution of this Letter  Agreement,  the  below-named  Guarantor  hereby
consents to the foregoing modifications to the Loan Documents, and hereby agrees
that the  "Obligations"  under  its  Unconditional  Guaranty  and/or  agreements
providing  collateral  shall extend to and include the  Obligations  of Customer
under the Loan Documents, as amended hereby.

Customer  and said  Guarantor  acknowledge,  warrant  and  agree,  as a  primary
inducement to MLBFS to enter into this Agreement,  that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents;  (b) each of
the  warranties of Customer in the Loan Documents are true and correct as of the
date  hereof  and shall be  deemed  remade as of the date  hereof;  (c)  neither
Customer  nor  said  Guarantor  have  any  claim  against  MLBFS  or  any of its
affiliates  arising out of or in connection with the Loan Documents or any other
matter whatsoever;  and (d) neither Customer nor said Guarantor have any defense
to payment of any amounts  owing,  or any right of  counterclaim  for any reason
under, the Loan Documents.

The obligations of MLBFS under this Letter  Agreement are subject to its receipt
(where applicable) and satisfaction with the following:

       (1) 09/30/01 Accounts Receivable Aging and Inventory Report; and

       (2) 10/31/01 Accounts Receivable Aging and Inventory Report, if Effective
       Date is after 11/15/01.

Provided  that no Event of  Default,  or event  which with the giving of notice,
passage of time, or both, would constitute an Event of Default,  shall then have
occurred and be continuing  under the terms of the Loan  Documents,  and each of
the  conditions  specified  above shall have been met to our  satisfaction,  the
amendments and agreements in this Letter  Agreement will become effective on the
date (the  "Effective  Date") upon which:  (a) Customer and the Guarantor  shall
have executed and returned the duplicate copy of this Letter Agreement  enclosed
herewith;  and (b) an officer of MLBFS shall have  reviewed  and  approved  this
Letter Agreement as being consistent in all respects with the original  internal
authorization hereof.

Notwithstanding the foregoing,  if Customer and the Guarantor do not execute and
return the duplicate copy of this Letter  Agreement within 14 days from the date
hereof,  or if for any other  reason  (other  than the sole  fault of MLBFS) the
Effective  Date shall not occur  within  said  14-day  period,  then all of said
amendments and agreements will, at the sole option of MLBFS, be void.




                                  MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

Sel-Leb Marketing, Inc.
October 25, 2001
Page No. 3

Very truly yours,

MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.


By: /s/ Kimberly D. Lee
   -------------------------------------------
        Kimberly D. Lee
        Senior Relationship Manager

ACCEPTED:

SEL-LEB MARKETING, INC.

By: /s/ George Fischer
   -------------------------------------------
Printed Name: George Fischer
             ---------------------------------
Title:        Chief Financial Officer
      ----------------------------------------

APPROVED:

ALES SIGNATURE LTD.

By: /s/ J. Koegel
   -------------------------------------------
Printed Name: J. Koegel
             ---------------------------------
Title:        Vice-Chairman, COO
      ----------------------------------------