Thursday, July 31, 2008

An opportunity that I deliberately ignore could become a big money maker for you.

Unless you're a great marketer with an ego that DEMANDS that you have your name written big on the fragrances you create, I have a "business opportunity" for you -- one that, to date, I keep walking away from. It's called "private label perfume."

As you may or may not know, "private label" cosmetics are a big business. "Private label" involves a manufacturer or middleman developing a stock product and then selling it branded with the retailers name. In the world of cosmetics, a very small retailer can, without much difficulty, obtain a complete line of cosmetics with their own name on it at a very affordable price.

Many of these small retailers and entrepreneurs would also like to have their own perfume. But "private label" perfume doesn't exist.

The reason why sources of "private label" perfumes don't exist is simple. Creating a successful perfume is a far more complex task than creating a cosmetic product. 90% of a cream, for example, is advertising hype. Everyone's creams are pretty much the same with the difference being the packaging and, often, the use of exotic ingredients or "new breakthroughs from science."

But the efficacy of these special ingredients is not easily demonstrated to the consumer. Only through advertising or personal sales pitches can the idea of the product's superiority be implanted in the consumer's mind. The consumer (truly!) cannot really "prove," in use, that one cream is superior to another. As for lipstick, anyone can easily reproduce the popular shades.

But perfume poses problems. Setting aside the issue of packaging, which is not particularly difficult for a private label product, there is still the issue of AROMA. And, unlike the claims that might be made for a cream -- or selecting the popular shades for lipstick -- a perfume can be "comparison tested" by the consumer against every other fragrance they have ever encountered, at fragrance counters, on other women, on granny's dresser. The nose passes judgment.

So to sell a fragrance successfully, private label or whatever, the aroma must (1) be pleasing to the consumer and (2) "original" enough so that it is not perceived as simply a knock off of something available elsewhere.

This, of course, is very challenging for the creator.

A private label perfume poses the ADDITIONAL challenge of needing a mass market appeal. Why? Because, as the seller, your market -- small retailers -- will be very diverse. A niche product will not succeed because THEY will be looking for a product with broad appeal.

So, in effect, you find yourself doing exactly what the major marketers of fragrance do each time they launch a new fragrance. They (1) want a fragrance that can be called "new," but (2) they don't want it to be too new or revolutionary, (just a little bit new so that the consumer's nose does not have to be reprogrammed,) and (3) they want it to have mass market appeal.

To succeed with a private label business, your creations would have to be similar.

Of course this is a huge challenge and, you may ask, "if I'm able to create perfume that would meet the standards of a major marketer, why would I abandon my own name and brand and sell it as a private label product?

The answer, of course, it to make money!

IF your perfume meets the three criteria mentioned above, it will be much easier to sell it to small retailers in bulk as "private label" than it will be to retail it on your own, or to sell it with your own brand name to major retailers.

IF your perfume meets the three criteria mentioned above, with a minimum amount of promotion you should be able to generate inquiries that have the potential of being turned into orders.

There are a few steps you will have to take to close your sales. Your perfume must be nicely bottled and boxed. The solution here is to buy, in bulk, a bottle and closure that will become your standard. Then, as all bottles and closures are the same, you can have a custom box made to fit the dimensions. On the front of the box -- and on the bottle itself -- will appear your actual LABEL (also of a standard size) which will carry your customer's name.

Whether you decide to name each fragrance yourself or allow customers to name individual fragrances would be up to you.

Of course setting up this business requires both time and capital as well as creativity in perfumery. You will have to purchase bottle, boxes, closures, labels, possibly some equipment to fill your bottles and print your labels. This could run you from $5,000 to $10,000 so certainly there is risk involved.

But the biggest risk lies in the possibility that you will not be able to create a series of six or more fragrances that meet the criteria mentioned above.

But, if you can pull it all together, this could be a profitable business which has the potential to grow large in scale.

Sunday, July 13, 2008

Is it possible to launch a successful "internet only" perfume brand? (Part III)

This post is a continuation of my last post and the last of a three part series.

Step # 2 -- Converting appropriate website visitors into buyers

Once you learn how to attract good prospects to your website, your next step is to make a sale. This can be incredibly difficult.

To start with, unless your perfume was given a favorable review by another website, one which has an enthusiastic following of well-heeled perfume buyers, people who come to your website will have more CURIOSITY about you and your perfume than they will have interest in buying it. In fact, you might consider yourself lucky to have them just LOOKING at it! To turn them into buyers is going to take some extraordinary EFFORT!

The FIRST RULE to selling these people is to MAKE IT EASY FOR PEOPLE TO BUY. IF you happen to get lucky and someone decides they want to try your perfume, have your shopping cart set up and ready to take their order. The smoother you can make the process, the more likely they will be to COMPLETE their order -- meaning you get the money.

The SECOND RULE to selling people is to MAKE IT FUN, or in some way A PLEASANT, UPBEAT EXPERIENCE to do business with you. People will spend money for the intangible pleasure of dealing with a "fun" salesperson who makes the buying experience alone worth the entire purchase price. So don't bust chops. Be nice to your prospective customers. Entice them, flatter them, let them know you CARE about them. DON'T hang big signs on your website reading "CASH ONLY" ... "ABSOLUTELY NO REFUNDS" ... "ALL SALES ARE FINAL." Make people feel that you have confidence in your product and confidence in THEIR integrity. You aren't out to rip them off and you trust them to deal honestly with you and not make complaints unless those complaints are fully justified.

The THIRD RULE is OFFER THE RIGHT DEAL. IF the deal you are offering seems too risky or too out of line with what the customer expects, no sale will be made, regardless of how charmed the customer was up to that point.

I can remember most vividly an experience in a dress shop in a small, semi-chic, upstate New York town when my wife was looking at a simple dress she liked (but noticed that it was badly sewn) and, because she was whim shopping, was prepared to pay sixty or eighty dollars ... but NOT the EIGHT HUNDRED dollars the sale clerk quoted. Sorry, folks. No sale!

I recently had a similar experience myself when trying to rent space in New York City for a perfumery workshop. After a pleasant chat with the rental agent, I was quoted a price ten times what I was expecting (and I knew the building and had lived in the neighborhood!) The quote was so ridiculous to me that I didn't bother trying to negotiate. I just walked away.

Think about your price points!

Pricing involves STRATEGY. Pricing involves your prospects ABILITY to pay and his or her WILLINGNESS to pay. There is no use pursuing a prospect that cannot afford your perfume. Instead, focus your attention on converting those who can afford your product. Woo them into becoming willing buyers.

One way to hit the right price point is to SIZE your product to fit. In other words, if you need to get $300 on ounce for your fragrance but know that the customer expects to pay about $100, offer your fragrance in 1/3 ounce (10 ml) bottles at $100 for 1/3 ounce.

And remember too, in selling a luxury product -- with yourself as the ONLY SOURCE (since it is your own perfume being sold only on your own website) -- a TOO LOW price can turn off sales as quickly as a "too high" price. You are not a discounter and your customers is looking for quality and originality, not "cheap."

Now let's look at how you get over the sales resistance barrier. Assume that you have brought prospects to your website (which, in itself, is difficult to do!) and assume (miracle!) that they have a real interest in the perfume that you are offering ... what do you do to make the sale?

Drawing on thirty years of experience in the mail order business, let me tell you. There is no mystery to this. The technique has been used for generations. It's the TWO STEP CLOSE -- LEAD and CONVERSION. It is simple and profitable. It can sell VERY EXPENSIVE items. Here's how it works.

BAIT THE HOOK -- In mail order, small, affordable ads can be used to get leads. Then, when you have the prospects name and address, you can mail them a BIG sales brochure, VIDEO, or even send a salesman to make a house (or office) call. In selling perfume on the internet, your "bait" is a SAMPLE. Please note that this is the SAME bait used at perfume counters in big stores!

Strategies for distributing samples will differ. In 1921, Chanel gave samples of her "No.5" perfume to customers, as a gift, before it was available for sale. Her customers were, of course, spending thousands of dollars with her. She could afford this pleasant giveaway.

For website inquiries you don't know who you are dealing with. My thought would be to make even the samples a bit exclusive, by charging a (small) amount of money for them so that you don't waste your distribution on people with no intention (and not enough money!) to buy.

But HOW you choose to distribute samples is up to you.

I should add here that the samples you send out should NOT be the same size and packaging as your regular size perfumes. They should, however, be presented to the customer with at least a degree of elegance. Again, how you achieve this will be up to you.

CATCH THE FISH -- The sample is your bait. Your bait has to be powerful enough to make the sale. The customer must, first of all, BE PLEASED with the fragrance you've sent out as a sample. In fact, the customer must be pleased enough to WANT MORE!

IF you find yourself sending out too many samples and not getting enough sales, consider that your problem may be in the perfume itself -- OR, possibly, in its price. Perhaps people like the perfume but don't feel that it is worth what you are charging. In this case, you can adjust your price (even if it means losing money!) and see if you can begin to make more sales. (You can make a "special offer" to those who are taking the samples.)

If reducing the price does not step up your number of conversions, it is likely that the problem lies in your perfume itself. It is simply NOT winning the hearts of your customers. Your best solution here it to go back into the laboratory and develop a more appealing fragrance.

FOOTNOTE : Packaging Elegance -- A nice bottle and elegant packaging can be a great help in stimulating orders. Unfortunately, the small, independent perfumer or perfumery is likely to find itself quite limited in its ability to purchase elegant bottles and to design and manufacture elegant packaging to set the bottle off.

There are a number of tricks that can be used here but packaging is a whole other topic, one that requires a good deal of study and experimentation and, when possible, assistance from a talented and knowledgeable graphic designer.

Lacking a source of assistance in packaging and presentation, my advice is simply, "Do the best you can!"

Saturday, July 12, 2008

Is it possible to launch a successful "internet only" perfume brand? (Part II)

This post is a continuation of my last post and the second in a three part series.

As has been said repeatedly, "CONTENT" is what builds visitor traffic on a website. "Content" generally refers to TEXT ... WORDS ... ARTICLES -- items that can be INDEXED by search engines. Photos do not qualify.

To be most effective, the CONTENT must relate to SEARCHES. If someone is LOOKING for particular information, and if your website offers the information that person is looking for, the search engines will guide the seeker to your website. This is "Internet 101" but it is often ignored or forgotten.

If there is no information on your website that will provide a resource for the seeker, search engines -- the most powerful advertising tool on the web -- will do NOTHING for you.

NOBODY is searching for your completely unknown, original, new fragrance because nobody knows it exists.

So your STARTING POINT in building your website-store is NOT your perfume. It has to be something else. BUT, that something else -- that CONTENT -- must be "content" that provides answers to search questions that might be asked by the very same people who will be prospects for your perfume. (I described these peoples in my previous post in this series.)

Let me give you an example. I sell (successfully) books and materials on perfume making on my website, When starting that website, the most important "content" was what I called "The Museum of Modern Perfume" -- a series of articles and pictures of some great and not so great perfumes, on perfumers, and on marketers of perfume.

This "museum" draws a great many visitors interested in tracking the history of a bottle of perfume that their grandmother left when she died, people seeking information on a fragrance company they or a relative once worked for, and people simply trying to find out more about their favorite classic fragrance.

The museum has expanded over the years and brought more and more visitors to that website. The "hits" on that website have advanced its standing with the search engines and so, when people look for information on perfume making and perfume making supplies, is likely to be fetched up to them in response to their search -- meaning more sales for me.

Once you begin to develop a following, you can expand your product range, just like any sharp retailer. This means even more sales.

Now the museum content DOES NOT pull in visitors wanting to buy MY perfume -- just my supplies. But the concept is a step in the right direction -- getting my name known, building credibility, enhancing my reputation -- with the hope that, in time, people will go to my OTHER website -- my retail shop -- and try my perfume.

So, to build YOUR website, think in terms of what you might offer, to draw prospective customers to your website. It won't be your perfume itself -- at least not in the beginning -- but it might be some (original) information on how you MAKE your perfumes, on what inspires you, some technical details on perfume making that don't give away your trade secrets.

Think of YOUR own interests at they relate to perfume. I was interested in the development of modern fragrances and the people who created and sold them. You might be interested in natural perfumery, aromatherapy, spa products, exotic aroma materials -- or whatever. And if you write about your interest and post your articles on your website, you too are likely to start building up RELEVANT traffic on your website which, in time, could offer you a viable outlet for the perfumes that you make.

These are ideas for bringing good prospects to your website. Next I'll give you some thoughts about how to make the sale. be continued.

Is it possible to launch a successful "internet only" perfume brand?

A great deal of perfume is sold over the internet. I've purchased a fair amount myself. There's eBay for "hard to find" fragrances plus a half dozen or more major retails who offer far more fragrances than you can find at your local mall.

These sales take place because the buyer is LOOKING for a particular fragrance and, going to the internet, can find a convenient, affordable source.

But what about the UNKNOWN perfumers who is creaeting new fragrances under his or her own (UNKNOWN!) brand name? Can the internet provide him or her with a viable sales outlet?

Setting up a website costs a tiny fraction of what it would cost to set up a single retail store. But setting up a website can easily cost MORE than what it would cost you to sell, face-to-face, out of your garage or home.

The internet has the POTENTIAL to reach a huge audience. But this is only a POTENTIAL. A very large number of websites draw NO VISITORS AT ALL. Having a website is NOT the same as having a BUSINESS. To have a BUSINESS on the internet you must be able to generate SALES. How many times have you seen a new business set up in your neighborhood, open with great fanfare, then close in a matter of months -- because they could not generate sales? The internet is no different.

To launch your unknown perfume brand on the internet you need to (1) draw qualified prospects to your website and (2) convert enough of these prospects into cash buyers to make your "internet-only" perfume brand profitable.

In short, you need the same two elements you would need to operate a retail store -- or chain of stores -- or any other successful distribution network for your perfume.

With the internet, the real question is, "How can I do it?"

Some hints at a solution

STEP # 1

Your first step in developing your website to sell your unknown perfume will be to build up your own reputation among people with an interest in TRYING and USING "unknown" fragrances. The person who will buy only well known brands is NOT going to become your customer. The person who buys only what is "fashionable" is NOT going to become your customer (unless you can find a way to make yourself or your perfume "fashionable" -- which is DIFFICULT.)

Your best prospect will be someone with an interest in FRAGRANCE (not BRAND NAMES!), has enough curiosity to seek out oddball fragrances (like yours!) and enough "mad money" to buy at least a small bottle, to give your fragrance a try.

How do you attract these potential customers to your website? Certainly NOT by simply showing a bottle of your perfume and its price. be continued.