Where are you planning to sell your perfume? Online?

    The most obvious points of sale for your perfume are retail stores and online. In my last message I wrote about the basic requirements for making sales in stores. Now I want to address the online option. There are alternatives to both of these that fall under the heading "guerrilla marketing" but it's hard to explain these opportunities as a good deal of imagination and energy are required to recognize and exploit them.

    Anybody can offer their perfume online. There are no restrictions, no gate keepers. You control your online presence. What is essential is that you have a device to take orders. This eliminates Facebook, Twitter, and Instagram although they can be highly effective for promoting sales. Typically selling online involves having a website, although there are alternatives such as eBay, Etsy, Shopify and "Etsy alternatives" (do a Google search for "etsy alternatives" to find them.)

    The cost of having your own website can be (realistically!) less than $60 a year -- if you are able to prepare your own pages. The $60 includes both web hosting and domain registration. For shopping cart you can use Paypal which is free. But, as Shopify warns, "Marketing your store is ultimately up to you, and is your responsibility as shop owner."

    So to sell online you need a store, you need to market that store, and you must be prepared to ship orders promptly (and be familiar with regulations for shipping perfume.) In short, you need to become a merchant but, as mentioned, there are no bars to prevent you from setting up your online store.

"Marketing your store is, ultimately, up to you."

    A platform like Shopify takes pains to educate its clients. Other platforms often make vague promises of marketing support. They want your business and the truth about how unlikely you are to sell any perfume with them unless you, personally, work at marketing it, does not encourage sales of their hosting services and it is the hosting services that they are selling, not your merchandise. You may need a hosting service but, just like having your perfume in a store, getting it into a store doesn't mean you're going to make sales.

    Sometimes the solution is a marketing partner, a person who can take what you have and make sales. It is not easy to find an individual who can take this role and, of course, it means that profits will be shared. "Sharing" is the key here. You don’t want to pay someone a fee to market your perfume based on promises alone but you certainly might make a commission arrangement with someone who can make sales for you that you otherwise would not have made.

    What it all comes down to is your overall plan. Having a product (your perfume), having a market (people who will be receptive to your perfume) and then deciding how to best connect with that market. If your market is local, a retail store makes sense. If your market is scattered across cities and states, an online store makes sense. But the key will always be how well you sell your perfume.

Could this be an opportunity for you? Using a window display to sell a lot of perfume!

  
  Thinking "big markets, unlimited sales" might close off any hope you have of becoming a successful perfume entrepreneur. You don't have the resources to complete and, by focusing on big markets, you're likely to overlook markets where you can make money.

Keep it small

    If you've never sold a perfume before and have never sold anything in big numbers, how many bottles of your own perfume do you think, realistically, you might be able to sell perfume? 50,000? Not likely. 10,000? Still a tough proposition. But what about 1,000 or perhaps a few less? Can you manage to produce just the number of bottles you need? Producing more bottles than you can sell can turn a good promotion into a disaster. Let's look at opportunities to sell 1,000 bottles, or even fewer.

No media, no sales
   
    You need media to reach your buyers. Sometimes the availability of a particular media opportunity can be your opportunity to sell your perfume. To expand your vision of media, look at this list. It could expand your thinking.

    From this list, look at one example: "window displays" which I take to mean retail store windows. Yes, windows can be media and, depending on the store's location and foot traffic outside the window, a window display could be used to sell an unknown perfume successfully.

Getting your perfume into a store

    It's not that hard to get a store to take your perfume on consignment, which means you only get paid for what is sold. It's no big deal for a local store to take your perfume on consignment. Perfume doesn't take up much shelf space. The problem is that, since a bottle of perfume is small, your perfume can easily go unnoticed and, when it is seen, it can easily be passed over ... unless people have some reason to take an interest in your perfume. Here's where a window display can change everything.

    Let's talk about that store window. I'm not suggesting you'll be allowed to take over the entire window (unless you have a really strong display) but you are likely to get enough space to put up a poster (big) advertising the actual bottle (small). This is media you don't have to pay for as you would with newspaper, magazine, radio, or TV advertising. The expense is nothing more than the cost of making that poster. The effectiveness will depend on your powers of persuasion. An alternative to a poster could be a video that loops. This would require some hardware and video production but many effective marketing videos are, today, shot with a mobile phone. You will, of course, have a duplicate display in the store with your perfume.

    Can you make an opportunity out of a willing retailer? Can you sell 1,000 bottles of perfume? You do have to monitor the store's traffic before you undertake a project like this. Are there are enough unique visitors to give to store the potential you need? If you find a good store that may not have all the traffic you want but good traffic for your perfume, consider cutting your goal down to 500 bottles or even 200 and keep your production in line with what you expect you can sell.

    Working with a retail store is a good experience because you will get a dose of the reality of what a store owner needs and what the public wants, and, in this "window display" strategy, you can get this with a very small cash outlay. If you can make it work, it can be your first step into perfume entrepreneurship.

Selling 1,000 bottles of perfume when nobody loves you

    (This message is a continuation of my blog and email from 8/8/19 which is now posted as a blog article here.)

    I have said that by selling 1,000 bottles of perfume you can make $10,000 in profit -- if you produce ONLY 1,000 bottles of your perfume so that your profits aren't dragged down by the money you spent on the bottles you didn't sell. But to sell those 1,000 bottles you need a market where people love you and are happy to buy your perfume. The question is how can you start your own perfume business and become a perfume entrepreneur if you don't have your own market of people who love you?

    The solution that has worked well for major fragrance houses is joint venture. They provide the perfume (which they don't make themselves), the joint venture partner provides the buyers. These arrangements are called "licensing agreements" because the legal implications of a true joint venture would take them somewhere they would not want to go. It will be the same for you but instead of a forty page licensing agreement you'll generally do quite well with a simple "letter of agreement." A good writer can reduce the essential nuts and bolts to a single page.

    To launch your perfume venture with this strategy you must be able to identify a joint venture partner who has a following that could, without too much difficulty, be led to buy your perfume (although it's likely they won't know it's your perfume they are buying.)

    The other piece of the puzzle is to sell this "entity with a following" on the concept of doing this deal with you -- you supplying the perfume, they providing the buyers. The ease with which you'll be able to sell your project will depend a lot on how confident your proposed "partner" is with their ability to sell your perfume to their customers or followers.

    You won't be breaking any new ground with this plan. Look behind the scenes at your local perfume counter and you are likely find that none of the companies selling their perfume created and produced that perfume. The companies that created those perfumes and control their formulas (but are restricted from marketing them) are not named on the packaging. Where you can break ground will be in applying this strategy to small, carefully targeted markets.

    You have to ask yourself, "is this an idea that could work for me?" But before you walk away from it -- or jump on it -- let me get in a few more words. Marketing requires imagination. The great marketers are those who can take the germ of an idea they picked up (not thought up!) and mold that idea into something that works gangbusters for them. Great promotions never come ready made.

    Likewise, in producing your perfume you need imagination to guide you to reliable vendors of the components and service you need who will give you rock bottom prices. You have to work at it. Nobody is going to hand you their best prices on a silver platter.

    It helps to study what others have done but to make it happen for you, you have to take what is given you and give it a spin that will make it uniquely suitable for your market. Remember, you are the one who has the most interest in getting the perfume produced and sold!

    Now here are my plugs for my books that can help you --

    Creating Your Own Perfume With A 1700 Percent Markup!

    How To Make Your First Perfume For Under $500 (free download, no email required)

These small opportunities can be your big opportunity

    It is entirely reasonable to expect a $10,000 profit from selling 1,000 bottles of perfume. That's ten dollars per bottle profit after production, marketing, and administrative expenses. To do it you produce only 1,000 bottles of perfume, not one bottle more.

    A market where you know you can't sell more than 1,000 bottles of your perfume may seem like a small opportunity. But if, in that market, you have good reason to believe that you can sell 1,000 bottles, $10,000 isn't such a bad profit. You could use it to develop another perfume for another small market or perhaps develop a perfume for a slightly larger market.

    To go about this successfully you have to nail down two requirements. First you have to know your market, the people in it and their tastes, and they have to know you. Then you have to know how to produce an acceptable perfume for them at a cost per bottle that will give you the markup you need, a healthy markup indeed. (See "Creating Your Own Perfume With A 1700 Percent Markup!")

    If you're not comfortable plunging into a perfume promotion, even a small one, you might find comfort in reading "How To Make Your First Perfume For Under $500". That book is free and it tells you a great deal about putting a fragrance together at a lower cost per bottle than many people believe is possible.

    Now about that small market where you can sell your 1,000 bottles of fragrance successfully. I mentioned that in addition to having to know the people in that market, they have to know you. How this works is simple for someone who already has a business such as a large retail store and meets his or her customers face to face. Likewise someone who is, say, a performer is likely to have a following and today it would be unlikely that this following could not be reached through social media. There are also a number of people who, for whatever reason, have a strong social media following. These are examples where "people who you know and who know you" are to be found.

    What about the person who is ambitious to sell their own perfume but does not have an obvious market for 1,000 bottles of perfume? I have a few thoughts on this that I am putting together in a separate blog post that I will share with you in a few days.

Testing -- forgotten or never known?

  
    My marketing mentors knew well the importance of testing but I suspect that you may be less acquainted with that art. There are times, such as when an individual or small company wants to launch a new perfume, that testing is hardly considered. Why?

    A major problem for testing is that you need a product to test with. Say you are planning to produce 50,000 bottles of a new fragrance. Can you, for a test, produce just 500 bottles? Will your vendors appreciate what you are doing and let you purchase just 500 bottles, 500 pumps, 500 boxes ... and just enough of the custom fragrance they have made for you to fill 500 bottles? Good luck with it! Here's a solution I once used.

    My company had what some thought might be an opportunity to sell a fragrance profitably. We had never sold a fragrance. The question was not the scent itself as we sold by mail and the buyers would have no opportunity to sample the scent. The question was, would our customers, the ones receiving our catalog regularly, have enough interest in a fragrance to make a fragrance offering profitable.

    A great many businesses are in this same situation. Their customers might go for a house-branded fragrance but developing one can seem like a very large financial risk.

    For us, to answer this question we purchased a few dozen bottles of a fragrance being sold by a competitor -- and advertised it in our catalog. The produce was a modest success.

    Here's where numbers come in. We projected what it would cost to make our own fragrance and how much money we could save on the cost per bottle by producing the fragrance ourselves. As it turned out, when we took charge and produced a fragrance ourselves, our cost per bottle was just 20 percent of what we had paid for the dummy fragrance. With the help of some inspired promotion, our new fragrance proved remarkably profitable.

Scent vs. market receptivity

    The test described above was for marketing receptivity. Would people in a particular market buy a fragrance from the marketer if it was presented to them "in their own language," so to speak. This  is really the first and most important test a fragrance entrepreneur needs to make. Your fragrance can be positively the best but if you market it to a universe of non-responders to your perfume, you'll get crushed.

    In my thinking, the most important question is not "will they like my perfume?" but rather "will they buy a perfume from me, the marketer?" Happily, while testing the appeal of various scents is a difficult undertaking for a small company, testing the potential receptivity of a particular market is considerably easier. Why Because you don't need the final product -- the real product -- to make a test. You simply need a product. This was my thinking when, in 2011, I wrote a little book called "How to make your first perfume for under $500". The book is now a free download from my website.

    The book guides you through the process of producing a small amount of your own fragrance but a large enough amount to allow you to test for the receptivity of your target market for a fragrance.

    With this test amount of a fragrance -- not necessarily the scent you hope to sell if your test goes well -- you can even establish a trademark. Once the fragrance is "out there" the name, if not in use by another, is yours -- and the trademark refers neither to the scent inside nor the bottle and packaging. If your test is a success you can upgrade to a more desirable fragrance and create nicer packaging while using same name -- the name that is now a protected trademark.

    This kind of test might not be your cup of tea but be aware that testing, to make sure that you have a receptive market, is important. It can save you many thousands of dollars that might be lost or, on the bright side, show you that putting your money into a perfume for this market will be a smart, profitable move.

    That free book download page is here.

Who will create the perfume you want to sell?

    Not everyone wants to sell perfume but I'm going to assume that you do. So I'm asking the question, "who will create the perfume you want to sell?" Once you've answered this question you can get started developing your perfume sales business.

    There are not a lot of options for creating your perfume. If you are confident and have some money and have a sense for what you want but know that you don't have the skill to create the fragrance you can hire someone to do it for you. The test here will be finding someone who can understand what you want scent-wise and who has the skill to give it to you. I wrote about this in Creating Your Own Perfume With A 1700 Percent Markup!

    If you don't have so much money and are willing to get your hands into it, you have two options. If you are not inclined to develop your own fragrance oil you can purchase an off-the-shelf oil from one of many sources and then build and bottle your fragrance with that. This is exactly what I went through for my first fragrance as detailed in Creating Your Own Perfume With A 1700 Percent Markup! and the venture was quite profitable.

    The final option, which is currently of greatest interest to me, is to develop your own scent -- produce it, bottle it, and sell it yourself. Clearly this isn't a path for everyone because it requires the ability to create a scent with sales potential and then go through the production and bottling steps as described in Creating your own perfume from dropper bottles: Methods, mechanics, and mathematics. This is a risky path and the possibility of failure is high but this is also where you can achieve the greatest sense of satisfaction when a fragrance you have invented -- from scratch -- wins praise and dollars from others. If this path appeals to you but you are absolutely clueless in perfumery, a good starting point is the PerfumersWorld Foundation Course which provides both technical knowledge and materials to work with. My own latest fragrance was developed using nothing more than five out of the twenty six aroma materials that come with the course. Then, if you take this path to pick up some skill, you can return to  Creating Your Own Perfume With A 1700 Percent Markup! and  Creating your own perfume from dropper bottles: Methods, mechanics, and mathematics for production assistance.

    The issue of "who will create the perfume you want to sell" is the one that must be resolved if you want to be in the business of selling perfume.

Need help from an investor to launch your perfume?

Here's how to manage the money men!

     Look at this situation. You have a well developed concept for a perfume, the scent, the packaging, and the market. You've researched it. You've put hours into the planning. Everything is ready to go -- but you don't have money. It's the typical starting point for many successful promotions.

    Because you have all the details worked out (all except for the money!) you think if you could just find a few people with money, the perfume could be produced and marketed and everyone would make money. Sometimes it does happen like this, on nothing more than a handshake.

    But not always. Issues arise. Who controls the accounting? How are the books kept? Who selects the vendors? Is anyone getting kickbacks for placing orders? Are legitimate profits being sucked out of the business by tricky invoices? Do you have the right and the power to see how your money men are managing the financial side of YOUR business? [I could go on and on about this -- through experience!]

    The sad result that (really!) can happen is that your perfume sells well but, due to some major ignorance on your part, in the end you are left bitter, broke, and sorry you ever got involved with these people. It doesn't have to be this way.

    Over the last week I've been giving these possibilities quite a bit of thought. My "entry point" for this meditation was a new look at a celebrity licensing contract I've been offering for sale for a number of years. My ad never attracted many buyers and I thought a little editing might spark up demand. The big question was, "who cares about what's in a celebrity licensing contract?" I doubt if I'll ever meet a celebrity much less work with one. If I don't expect to work with a celebrity, why should I think you might?

    Then it struck me. Remove the celebrity (referred to as "OWNER" in the contract as the celebrity "owns" the rights being licensed) and remove the marketer (referred to as "LICENSEE" in the contract) and the entire contract can be seen as a negotiated arrangement between a creator (like yourself!) and a marketer (like your potential investors!). Or, to spin it the opposite way, as you, the marketer, and your investors "the creators" (they create the possibility that your project will fly.)

    Now this contract becomes exciting! It's a battle of wits, each side trying to protect their interests while extracting as much as they can from the other side. If you bring investors into your project your negotiations with them will be similar. Consider just these few issues --

    - Who will have the final say over development of the fragrance, its production and packaging? You or the investors? (Get it in writing!)

    - Who will have the final say over advertising and marketing decisions? You or the investors? (Get it in writing!)

    - Who will select the vendors to be used? You or the investors? (Get it in writing!)

    - Who will keep the books and will you and YOUR accountant have full access to them? (Get it in writing!)

    - Who will own the trademark (the name of your perfume) after the promotion has run its course? (Get it in writing!)

    - Who will be responsible for any taxes owed? Any customer service problems? Any queries from government regulators? (Get it in writing!)

    - Will the venture purchase product liability insurance? Will it protect you? (Get it in writing!)

    The list goes on -- for 42 pages.

    In fact, this celebrity licensing contract is really about covering all that must be done right and all that could go wrong in a marketing venture between two parties operating at arms length. If you bring investors into your project be careful not to assume "we're all in it together."

    I know when you are starting out, getting attention from someone with money can be awe inspiring. It's easy not to want to rock the boat and just allow yourself to be led. But this celebrity marketing contract gives you a huge bank of knowledge you can use to guide your investors and protect your own interests! This is what got me excited when I re-read the contract. The celebrity's fame was forgotten.

    Hope I haven't said too much. I could go on and on on this topic.

    Thanks for reading another of my messages!

    -- Phil



 

"What will it cost me to produce my own perfume?"

"What will it cost me?" It's usually the first question on people's minds when they think of creating their own perfume and the question is important. But the really most important question that must be asked is "How much can you make with it?" If the potential for great profit is there, the real question is "How much can I spend per bottle to make the profit I envision?" Now the discussion begins to get realistic. If the potential is there, the question becomes, "Where can I find the money?" You might not have to look very far.

    Before having the success with perfume I've documented in Creating Your Own Perfume With A 1700 Percent Markup! I had two other encounters with perfume, one of which I would just as soon forget. The other, until recently, was almost forgotten.

    In the almost forgotten episode I was a new, inexperienced employee in a company that was making money selling perfume among the many other product of various natures they were marketing. The owners were promoters. Perfume was just another promotion. They made their money with perfume and then went on to something else -- towels, jewelry, electronics -- then sold the company and briefly retired.

    My next encounter with perfume was something of an embarrassment. I was riding high on a string of successes with other products and someone suggested we do a perfume. "Okay," I said, "Put it together and let's see what happens." They put it together and I butchered the advertising -- horribly. I don't recall what we spent to produce the perfume but it was far less that then $15,000 I flushed down the toilet on advertising media and production -- without producing a single order. Why? Because I was arrogant, I thought I could walk on water but the truth was I didn't have a clue about perfume, the market, or the media. I thought it could all be just one big (expensive) ad. I thought it would be easy. A lesson was learned.

    But then, perfume again and this time success. For this adventure, documented in Creating Your Own Perfume With A 1700 Percent Markup!, our budget for the production of 1,000 bottles of a men's fragrance was $2,000. Our cost per bottle came in at under $1.50. We advertised the fragrance at $26.95 and sold out out entire production. Advertising expense was minimal as it only involved producing a page for our own catalog.

    If you asked me what it would cost you to produce a perfume today my answer would be "Anything from a thousand dollars or so up to ... the sky's the limit." But the real issue is your market. How much are you going to sell? If you can sell a lot you can spend a lot; if your market is small, to be profitable your perfume has to be produced on a budget that can make it profitable in that market.

    So here's my advice. If you want to be involved in perfume, study how it is made, what goes into. Then study your potential markets. Can you spot a marketing opportunity, and do you have a marketing strategy that will work with that market.

    Get your ideas together. Estimate how much perfume you will need to serve that market profitably. Then start to calculate how much you can spend per bottle to address that market profitably.

    Now the real fun. Developing a product -- your perfume -- that can be produced at an acceptable cost. The hard work, the planning, can be done without spending a penny. But it will involve some serious thought.