Wednesday, April 25, 2007

Bursting Out Of Your Own Store(s)

There are still a few examples around of perfumes that get their start as a store brand and then branch out to additional sales outlets.

This was once the story with French designer fragrances. Today it is the story of Victoria's Secret. Tomorrow it could be you.

Victoria's Secret lingerie and other garments are sold ONLY through Victoria's Secret stores, catalogs and website. But Victoria's Secret fragrances are also available through other marketers -- for example.

Why does Victoria's Secret let others sell their fragrances? Two good reasons suggest themselves. FIRST, it is more expensive to launch a new perfume than it is to launch a new bra. By expanding the distribution of their perfumes, Victoria's Secret can take advantage of economics of scale and put more money into both fragrance development and package design and still achieve a lower cost per bottle and a greater profit on each bottle sold.

The SECOND reason is even more obvious. The perfume advertises the brand. When people see Victoria's Secret perfume for sale, they are drawn to the company's stores, catalog, and website. This is exactly what French fashion designers were doing back in the 1930's and 1940's. Pierre Balmain even put his phone number on a fragrance, just as he might have done with a business card.

So, the lesson? If you have a store, stores, catalog or website where you are selling, successfully, your own perfume, look around and see who else might want to sell your perfume -- particularly if the labeling on your bottle could bring new business back to you!

Monday, April 23, 2007

How NOT To Advertise Your Perfume

I'm looking at an ad in the January 2007 issue of ELLE magazine, U.S. edition, for Guerlain's "Insolence" perfume described in the ad as "the new feminine fragrance." A bottle of "Insolence" is shown on the page which is filled with a head and shoulders photo of Hilary Swank. The largest type on the page reads, "GUERLAIN." Lines at the bottom of the page read "Hilary Swank for Insolence" and "Available at Macy's."

This is pretty much a standard perfume ad, so why would not NOT want to use this as a template to advertise your own perfume? Why? Because you would be throwing your money away.

But let's look at this ad. There are two photos, three famous names, and two lines of copy. The oldest of the famous names is Guerlain, once a family business that was responsible for creating some of the world's great perfumes, now a conglomerate brand. Second in age is Macy's, a department store star ascendant. Finally there is Hilary Swank, a newcomer to the walk of fame.

The Guerlain name is engaged in a struggle for survival, hence it's prominent size on the page -- to remind you that Guerlain still exists. Macy's, of course, is where you would go to purchase Insolence. And Hilary Swank is the celebrity chosen to draw fans to the fragrance. Since not everyone would recognize her, the advertiser rightly includes her name at the bottom of the page.

So let's start by asking, "where is the sell?" The Macy's line is obvious. Get the viewer to Macy's and they are certain to buy something. It also lets us know that Insolence is currently available.

The Hilary Swank photo draws us to the page (hopefully) and thus we become aware of this new perfume with which she had associated herself. Certainly it is good publicity for Hilary Swank -- to keep her face in front of the public.

So if this was YOUR deal and you had your perfume in a store and had a celebrity to advertise it, you would be giving nice publicity to your celebrity and to the store. Of course, you're not Guerlain so your own name on the page would be less meaningful or not meaningful at all. But let's get back to the real issue: selling perfume. How much selling does this ad do? Without the names "Guerlain", "Macy's", and "Hilary Swank", the answer would be "none."

For Guerlain, the purpose of the ad is pretty obvious. Macy's won't stock the product unless it is being advertised. Guerlain's arrangement with Hilary Swank may also call for a certain level of advertising support. So to "do the deal", Guerlain is obligated to advertise Insolence. Creating and running an ad is no guarantee that sales will be made as a result of the ad's appearance.

So if you were the advertiser, following this template, you might be paying off your obligation to your celebrity and the store which agreed to take your fragrance. But would the ad be SELLING any perfume for you?

Companies new to advertising overestimate the power of an ad and assume that just because an ad is ordered and paid for, sales will result. This is not the case. Even a very expensive ad can -- and will -- produce zero sales unless the ad does some genuine selling.

As an individual or small business selling your own perfume, you cannot afford to do what Guerlain is doing. Guerlain may lose some money on their ad but you will lose ALL of your money. Guerlain can afford to lose some money. You cannot afford to lose ALL of your money. Not if you are serious about wanting to sell your perfume.

As the unknown perfumer with no track record, you need a really big marketing concept for your ad, a concept far more powerful than the celebrity endorsement ads you see in major publications. How to you get a winning advertising concept? The answer is simple. You avoid wasting your money on big, splashy ads that do nothing for you and, instead, spend your money going face to face with as many prospects as possible, developing your sales pitch verbally until you have a line that works for your perfume with the right people. Then you can start to work -- with that knowledge -- to build a marketing campaign ... and an ad with a true selling concept behind it.

Wednesday, April 18, 2007

Chinese infomercial producers are waiting for your perfume!

Would you believe it? In August of 2006 the government of China cracked down on the direct marketing television industry and ordered an end to all those popular infomercials for weight loss, breast enhancement and height improvement. Zao Zhao and Youcheng Ji report that as many as 20 percent of all infomercial producers in China could be driven out of business by this distressing development. But this could be an opportunity for you.

Just like weight loss and breast enhancement, perfume is a high markup product. If an infomercial could sell enough of your perfume, you could make out nicely, the Chinese infomercial industry would be saved and men and women all over China would be enjoying the fragrance you created.

Can you develop a great infomercial idea to sell your perfume? How would you approach it? What would you say -- on TV -- to make hundreds of thousands of people want your perfume? If you can come up with the right idea, you might want to start talking to Chinese infomercial producers. If your mind goes blank ... well ... selling your perfume may turn out to be a problem for you.

Tuesday, April 17, 2007

The easy way to get big orders for the perfumes you create

Where do you go to find a big bunch of the world's top perfumers? The answer, of course, is a fragrance house such as IFF (International Flavors & Fragrances). IFF churns out perfume for such famous names as Estee Lauder, Coty, Elizabeth Arden, L'Oreal, Liz Claiborne, Banana Republic, and lots more. IFF markets its perfume making services to these companies -- in return for being the exclusive supplier of the finished product.

The strategy is nothing new. Back in the 1930's and 1940's -- before IFF existed -- Roure Bertrand (now merged with Givaudan) trained and employed many of that generations top perfumers who cranked out fragrances for Dana, Carven, Christian Dior, Lucien Lelong, Schiaparelli, Balmain, Nina Ricci, Robert Piguet, Givenchy, and others.

Roure's owners then, like IFF's owners today, saw the profits in setting other people up in the perfume business -- people (such as the great French fashion designers of the period) who had ready made markets for perfume. Roure sold the fashion house on the idea that they should be selling perfume. The designers had celebrity status, women bought the fragrances that carried their names, and Roure made lots of money from it, just as IFF makes lots of money today off the celebrity status of David Beckham and Viktor & Rolf.

If you are making perfume -- good perfume -- but want to stick to making perfume rather than getting involved in consumer marketing, consider turning yourself into a one-person IFF or Givaudan. Find organizations that could profit from selling their own "signature" fragrance. Then offer to supply it to them.

Of course you're not likely to snag Tom Ford or Estee Lauder as a client but you may uncover some hidden gold in local organizations that can sell just about as much perfume as you, working alone, can create.

Maybe it won't really be so easy to get that all important first order. But it's a business plan that has already proven itself to be profitable. And it could be both profitable and emotionally rewarding for you.

Friday, April 13, 2007

Three Rules For Smart Perfume Marketing

Follow these three rules and you are very likely to make money. Ignoring them can lead to time wasting, expensive failures.

Rule # 1 -- Don't expect others to sell a fragrance you can't sell yourself.

It's your perfume, can you sell it to consumers -- anonymous consumers, people you have never met before? Can you approach a man or woman with confidence in your fragrance and make a sale to someone who has never heard of you?

If you can't sell your own perfume, don't expect others to be able to sell it. Don't think that just because a popular store agrees to take a small order on consignment you will suddenly be making sales.

If you are fortunate enough to find a store that will take your perfume, you'd better plan to spend some time at that store doing some personal selling. Then, when you have the winning sales patter down, you can train others.

Rule # 2 -- Test on a small, affordable scale before you blow a wad of money.

I have worked with people who committed too much money to projects that failed. Had they tested their ideas on a smaller scale, they might have gotten the data they needed to straighten out their project and take a better shot at the target -- or they might have realized they were headed for disaster and quit while they still had money in the bank.

Thirty years in the mail order business have made me a great fan of testing on a small scale. I have seen unexpected failures where I was sure I would see success -- and I have seen huge successes arise out of the most unlikely tests.

Major perfume marketers, like mail order entrepreneurs, know that only one out of three ... five ... or even ten projects will result in a genuine success. So they budget money for testing -- for trying this and that without betting the farm. The one genuine success that comes out of these tests gives the company its profit -- and its capital to do the next round of three ... five ... or even ten tests.

Be sure, through testing, that you have a winner before you mortgage your home.

Rule # 3 -- Go with your winner.

When the "numbers" -- the sales results -- show that you have a winner, invest in your project. Make your sales while the market for your fragrance is hot. Work it with all your energy. This is the point at which you make your big profit -- and put away the capital needed to develop your next round of fragrance tests!

Thursday, April 12, 2007

If you make it in China, don't plan to sell it in China!

A recent article by Simon Pitman in Cosmetics design-europe reported that Chinese consumers are increasingly unwilling to pay more for foreign cosmetic's brands (and, presumably, perfume.)

While Pitman cites several reasons for this trend -- revealed in a report by Vincent Chan -- one possible reason is pretty obvious: most of our (U.S.) consumer goods are made in China and the push to use of Chinese facilities to produce more and more consumer goods in accelerating.

For many years China has provided raw materials for perfume and cosmetics. China currently provides packaging components for both mass market and "prestige" perfume lines. Why would someone in China pay a premium price for a Chinese-made item assembled in the U.S. or Europe and then re-exported to China? It doesn't make sense.

The implications of this trend are vast. Companies that are looking at China as a huge, untapped market may find themselves out in the cold because of the price structures they wish to impose on Chinese consumers.

Think of China as a giant Wal-Mart forcing small competitors to close and large competitors to (with great pain!) match the everyday low prices charged by Chinese companies to Chinese consumers.

Perhaps the best strategy to survive the growing dominance of China in the market is to (1) get absolutely fixated on product quality and (2) knock yourself out to provide far better service than any competitor.

Funny how these two strategies work well for small U.S. and European companies -- and individuals -- trying to sell their own perfume under the noses of the dominant perfume marketing giants.

Wednesday, April 11, 2007

Last winter I made some comments about The Pope's Cologne in a newsletter sent to our Perfume Makers' Club members. The cologne (really a very nice cologne!) was made from a 19th century formula said to have been used to make cologne for Pope Pius IX. The marketing "hook" was the association with Pope Pius IX.

Now another California fragrance marketer, IBI, has grabbed on to an even bigger hook -- a fragrance said to "remind the wearer of God."

Like The Pope's Cologne marketer, the marketer of Virtue perfume has managed to get some press over the concept (and probably some controversy) thanks to the "hook" on which they've rested their marketing efforts.

While some may be repelled by the religious associations for commercial products, the hooks these marketers have chosen have created buzz. People are talking about these fragrances (and writing about them!) ... and these are the first steps in guiding people toward trying the products. After the trials, the fragrances succeed or fail based on their merits.

So my question to you is this -- have you considered your own perfume in terms of a "hook" that can help get it talked about ... sampled ... and sold?