Friday, January 25, 2019

"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.

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