What is a new customer worth to you?

     When you spend money to advertise, a critical issue is the value of a new customer. The "game" is to make more money from your ads than you paid for your ads. If you spend $50 in advertising to sell a bottle of perfume that yields a $45 profit, have you won or lost? You can't tell unless you know the customer's LIFETIME VALUE.

    In brief, if you spend $50 in advertising to make a "$45 in profit" sale to a new customer who will never buy from you again, you've lost $5. You would have done better not to have advertised.

    But, if your new "$45" customer makes a second purchase from you which yields  another $45 in profit, you've made $40 in profit off this customer. If he or she buys from you again, your profit from that customer will be even greater and the $50 you spent to acquire this customer has more than paid out. This "customer value" metric is what guides your advertising program.

    This issue of "customer lifetime value" is shouted by bloggers and ebook writers all over the internet. But their wisdom may be of little value to you. One issue stands in the way of your using customer value to accurately guide your advertising program: your lack of data. New in business, you don't yet have the customer histories you need to establish the lifetime value of a customer.

    So what can you do?

    The first essential step is to develop a purposeful customer database. This, in time -- maybe in just a few months -- will allow you to begin to establish the lifetime value of your customers. Here's how I've done it and how you can do it.

    Every order you get goes into a database. You'll want it to be on a computer so you can sort and manipulate it. Every order that you post is posted with the product purchased and the revenue received. From the product you can extract what amount of the selling price is profit. Every entry will also include a customer name, address (when possible and practical) and some sort of unique customer identifier.

    This customer identifier is essential as gradually you will develop two databases -- one of individual invoices (sales) and the second of the customer's cumulative history. This second database will show the total amount of money the customer has spent with you, the sum of individual purchases. This second database may also be able to show how often each customer has ordered from you.

    The "trick" to setting up this system is to find a unique identifier to allow you to aggregate each customer's individual purchases into their cumulative history.

    In the past I have assigned a unique customer number of each new customer based on name, address and zip or postal code. If you're selling digital goods, you might not get a name and address but you will get an email and that can become your unique identifier.

    If you are a retailer, you'll ask for a phone number. Most people today have their personal mobile phone and thus a unique phone number.

    I realize that for the average new marketer, setting up this sort of system can seem overwhelming. I came to it from the advantage of having IT people to do the programming so all I had to do was specify what data I wanted captured and what manipulations I wanted to be able to make on that data. If you're just starting out you'll probably be reluctant to spend time setting up systems when, at present, you're just desperate to make sales.

    But keep this in mind. As you begin to collect orders, by organizing them into at least an invoice (sales) database you'll be making a start. And, for this database, collect at least one identifier be it cell phone number or personal email.

    Don't wait too long before you do it. Your data will start to show you what each new customer is worth to you and that number will begin to show how much you can spend on advertising, to acquire a new customers.

FOOTNOTE: If the concept of a database is new to you, here are some ads for databases you can look over. Looking costs you nothing. And, if you are going to become a marketer, you'll find databases are an essential tool. I've developed my own marketing database but before I could do it, I learned a lot from our IT professionals. Regardless of timing, a database for your business is an important "something" to keep in mind.

When is the time right to spend money on advertising? When should you launch an ad campaign?

    Everywhere you look you see advertising. Every media bombards you. Could this tool -- advertising -- help make businesses more profitable? Could advertising be helping you? If you are reluctant to spend money on advertising, it may be because you haven't asked yourself, and answered, these three questions:

    (1) When should I advertise?
    (2) What should I advertise?
    (3) How should I advertise?

When should you advertise?

    The answer is easy: “when you have something to advertise." But “having something” requires your taking a hard look at your business and asking yourself, "Do I have at lest one product or service that is selling profitably now and might get even more orders if I were to advertise it?"

    In spite of stories you might have heard about advertising selling the unsellable, advertising rarely can make an unwanted product profitable. Don't advertise until you have proof that a product or service you offer can -- and has -- made sales.     If you don't yet have at least one product or service that sells profitably, you're not ready to spend money to run advertising.

    You may ask, "how can I make sales without advertising?" but there are many ways to expose your products to the public without paid advertising and, if no amount of exposure results in sales, you're not ready to spend money on advertising. First you have to get your act together and make your product desirable. This may mean writing a more compelling description for it, or showing it off with a better photograph, or getting enthusiastic testimonials for it, even if you have to give away a few bottles of your fragrance to get those testimonials.

    Before you begin to spend money on advertising, be confident you have a product that will sell.

What should you advertise?

    For some, under some circumstances, just advertising your business could make sense. For most of us advertising a single product from our business makes more sense.

    If, from experience, you can predict that a new customer will buy from you again and again, consider advertising a "loss leader," a popular product you can offer at a conspicuously low price. This strategy attracts as many new customers as possible and you do it with the knowledge that the additional business you receive from them will more than offset the minimal profit or small loss you get from their initial orders.

    Before you experiment with a loss leader, make some estimate of the profit that will be produced by future orders from these customers. This is a long range strategy and one that calls for record keeping that will allow you to estimate what a customer is worth to you in profit over the weeks, months, or years they continue to shop with you.

    But suppose you have a small number of products to offer and experience shows that most new customers don't give you a second order or, if they do, it's a long time in coming. In this situation you'll want to maximize your profit on the first and possibly only order. Look for a product that sells well and yields a generous profit from each sale. This will probably be your "best" product and it's the one you want to advertise.

How should you advertise?

    Ideally you will begin by running test ads in several media with several messages to see what works best for you. If your budget is extremely limited you may do better to put all your eggs in one basket rather than spreading the money so thin that any results you get will be too small to analyze. For starters, go with the media that can give you the most bang for your buck. You don't yet know what it is so you must take a shot in the dark with an advertising program you can comfortably afford and where you can quickly cut your spending if necessary. Give consideration to Google Ads, Amazon Advertising, YouTube, Facebook, Twitter, Instagram, and Reddit. Think about media where you see ads that are most closely related to what you are selling.

    Set up a budget that will allow your ads to run over a period of weeks but won't break you should the program prove a  failure.

    Study at the media you have selected. Look at the product you have selected. Write about it just using the ideas you would use if you were selling it in person. Keep it simple. Keep your focus on how the product could help someone.

    If advertising is new to you, the two most important points are selecting appropriate media -- placing your ads in media that makes sense for your offer -- and the offer itself. A good offer made in the right media can sell a product far better than all the work of "creative" advertising people when they promote a poor offer in the wrong media. Writing and photography skills are secondary to common sense selling.

    Keep these two points in mind. My own current advertising program is focused on selling a single product: this book.

Developing an idea for a new perfume... and how I'm going to sell it

     I've mentioned the Etsy store I've been setting up as a research project. Regardless of what you may think of Etsy, for me it has providing some inspiration and giving me new energy. We can all get in a rut at times and, by forcing yourself to interact with a platform entirely new to you (to me, in this case!), fresh insights and ideas get pounded into your head and, if you stick with the program, you find old skills refreshed and new skills acquired.

     Marketing online can seem overwhelming, even if you've had marketing experience, but Etsy guides you – and requires you! – to provide the minimal essential information needed for your goods to be purchased; so that a sale can be made from your store. Beyond the minimum requirements, Etsy prompts you to add additional content and links to your store to make it search friendly for both Etsy and Google. Merchandising tips help you make your store attractive to visitors.

     The inspiration and energy I mentioned above came as I began to develop my Etsy store. I was reminded that I should be taking those same promotional and merchandising steps on my own website and through my social media. I felt like I was being mentored by Etsy because, when you're a small – or very small – business, you find yourself pulled in multiple directions and too often you're pulled away from the most important tasks by small tasks that, aside from making your feel you've "done something," don't do much for your sales or profit.

     While I'm not eager to get back into the business of shipping merchandise – daily trips to the post office with tubs of orders – doing the setup work on Etsy energized me. All of what can be found on my Etsy store can be found elsewhere. The books are available at both Amazon and PerfumeProjects.com. My fragrances are all available at PGLightyears.com. But it struck me that my Etsy handle, "Unnatural Aromas" – a name I came up with on the spur of the moment, wasn't synchronized with the PGLightyears.com site. This prompted me to take two steps. (Are you following this?) First, I added a big "Unnatural Aromas" headline to the PGLightyears site. Then – very important – I registered "UnnaturalAromas.com" as a domain name so it would be available to me should I want to set up an independent site to mirror what I'm doing on Etsy.

     But there was another important inspiration – two meanings of "unnatural aromas." The first is a bit of a slam at those who insist that their fragrances be "natural." Before the advent of synthetics, the range of materials available to the perfumer was limited. You would find yourself creating the same, or nearly the same, scent over and over again because the number of available naturals was small, and now many of the most historically important naturals have been banned due to ethical or health considerations. Meanwhile I plunge ahead with the "unnatural."

     My inspiration from the name "unnatural aromas" may be even more to the point. A handful of my fragrances are... a bit "oddball." My fragrances for men don't follow the unwritten rules for how a man's fragrance should smell. My women's fragrances definitely do not follow the rules for "ladies" perfume. Many of my male, female, and unisex fragrances are quite... "unnatural."

     So now, thanks to my fussing around with Etsy, I'm working on gathering up the more "unnatural" of my fragrances and promoting them as a collection. Currently that collection has three fragrances with unquestioned credentials (Blackberry, Xotic, and Mimosa) but I'm already planning a new fragrance to become part of this club.

     You might ask why I continue to develop new fragrances rather than just hammer away at those that are already finished and bottled. The answer is, I love to explore, to find new fragrance ideas, and to develop new smells that, while they might be "unnatural," are nuggets of beauty for those who can set their prejudices aside and embrace that which is different.

Early statistics from my Etsy adventure

     Although I have a website that offers my own fragrances, and I sell my own books both at Amazon and my own bookstore, I have been experimenting -- "researching" -- other platforms, looking for additional possibilities. Thus far eBay hasn't rung any bells for me but Etsy shows promise and doesn't conflict with my other platforms.

    To learn about Etsy you really have to open and Etsy store. To open an Etsy store you must have at least one product to put up for sale in that store although Etsy recommends you list at least ten items when you open your store. (The cost is minimal.)

    The first point you want to take note of here is that you can't use Etsy unless you already have a product to sell. This may seem obvious but we don't want to put the cart before the horse. Developing your product -- a fragrance I'm presuming -- is your first step, although you can and should have, while developing your fragrance, begun to map out your marketing plan.

    Not knowing anything about Etsy and, therefore, not having planned a finished, fully decorated store in advance, I opened my Etsy store with just one item. This met Etsy's minimum requirement. Since then I have been adding items to my Unnatural Aromas Etsy store. This is easy to do as Etsy's template guides you through the process, gathering the essential information and giving you opportunities to add extra information if you see fit. For me, adding items was easy enough as I already had products, photography, and descriptions from my web pages and photo archives.

     I've added both fragrances and books to my store. The books are in the form of digital downloads and I've run into a problem here due to Etsy's 20 meg limit on file size. In one case a cover, which can be seen on Amazon, quickly overshot Etsy's file size limit and the cover photo had to be eliminated. The file size limit makes it challenging to use color illustrations in ebooks for the Etsy platform.

    A few statistics have been coming in for my Etsy store, Unnatural Aromas. What they show to date is about a 40/60 split between visitors who have come through Etsy searches and promotions and those who have come through sources outside the Etsy universe. This would include my own web pages, Facebook, and blogs. When I did a Google search today for "Unnatural Aromas," the first mention of my store came up on Google's page three.

    What is important to notice is that, should you offer your perfume on Etsy, it will be useful to promote it both through Etsy support and through your own social media activities. And, of course, you'll want to make your store itself as shopper friendly as possible.

    The "rules" for making sales on Etsy are no different than the rules for making sales through retail stores, local or national. Like Etsy, the stores may "take" your fragrance but don't expect them to sell it for you. If you want to make sales, be prepared to become a promoter. That's the only way.

Can Etsy sell your perfume? It costs very little to find out and you learn a lot along the way!

    In my last message I wrote about a marketing test I was conducting on eBay, although I considered eBay an unlikely marketing platform for an unknown fragrance from a nearly unknown company. This week I've turned my attention to Etsy stores which, I believe, offer greater opportunities for the sale of handmade, homemade, and indie perfumes.

    You can find a lot about using Etsy effectively through a simple Google search which will turn up a great many articles on Etsy. Like eBay, much depends on your keywords but Etsy's handbook gives an excellent explanation on how Etsy ranks stores in their search utility. This handbook is worth studying and the ranking system it reveals is not unlike that of Google and other platforms. Etsy search rankings start with keywords but are narrowed down by another group of factors including how active you have been on Etsy, historically how many sales you have made, how recently sales were made, and what Etsy calls "customer experience."

    I opened my own Etsy store because you can't really understand how Etsy works until you take the plunge and do it. It's a bit like Facebook. You can't see what's going on until you join. With Etsy you can shop without any enrollment but to understand the complexities of the selling side you have to participate.

    What is clear from the many helpful comments you find repeated both in the Etsy forums and elsewhere is that success on Etsy involves effort. To sell successfully on Etsy you must put in a good deal of time; you must read and re-read Etsy's advice to sellers; you must constantly be "improving" your Etsy store, interacting with customers and prospects and adding fresh products to your store. Etsy wants you to have at least ten items on your store and Etsy won't let you open a store without at least one item ready for sale. Thus, at present, you'll see my Etsy store with that one required item.

    If you need marketing guidance, Etsy gives sellers good advice such as "offer items at different price points" because people might come to your store for your perfume but, finding it a bit expensive, they might try you out with a smaller order -- a candle, soap, or perhaps a small solid perfume.

    In general you have to keep in mind that Etsy is out to make money for Etsy. But to do that -- since they take a cut of sales -- they will boost the rankings of the "most likely to succeed" stores because this will make more money for Etsy.

    Think of an Etsy store as a store because that's what each Etsy vendor has -- a store, storefront and all. Think of what makes any store succeed -- attractive merchandise, attractive prices, attractive customer service. A lot has to go into it. On eBay it's perfectly normal to sell a single item. Many eBay sellers post a single item and the are done. But, like Etsy, there are eBay stores and these are stocked and, in large part, depend on repeat sales from customers and word of mouth recommendations. It's difficult to be in any retail business selling a single item.

    This doesn't mean you shouldn't give Etsy a try even if you have only one item -- one perfume -- to sell. A lot of "no-name-brand" perfume does get sold on Etsy. (You can see how many sales each store has made because it is posted by Etsy on their storefront.) But, with only one item you are less likely to attract traffic to your store.

    As to me, now that I've opened a minimal Etsy store I'll develop it as time permits... to see what Etsy can do for me.

    And I strongly suggest you read the Etsy search and Etsy ranking pages. Whether you decide to sell on Etsy or not, you'll get some important internet marketing guidance from these pages that can help you, regardless of where you decide to sell your perfume.

Sell your perfume on eBay? This is how you might make it work for you

    If you are going to sell your perfume online, eBay is a platform to consider whether or not you have a website of your own. A listing on eBay costs no more than a few dollars. Budget $50 or $100 for eBay and you can run a number of advertising tests. The downside is that ALL of this money can be wasted without producing either sales or useful marketing data; but you won't know until you try.

    On eBay you face an amazing wall of competition. Search "perfume" and you'll come up with over 1/4 million results so your first challenge is to get people to find your listing. Once you've listed your perfume in the only logical eBay category for it -- health and beauty > fragrances > men's fragrances, women's fragrances, or unisex fragrances -- your tests will be your selections of keywords.

    Your keyword tests are important. If you can find productive keywords for eBay, keywords that will bring viewers to your listings, you can use those keywords on eBay for other fragrances you might develop. You can also use them on web pages, blogs, and elsewhere to generate appropriate traffic.

    In selecting keywords to test, drop all thought of hyperbole. "Fantastic," "Amazing," "New," won't help you. Nobody is searching for "amazing" products unless perhaps they are looking for superhero comic books. Think of how you might search if you wanted to discover a deliciously unique new fragrance from a company nobody you know has ever heard of; if you wanted to be the first among your friends to wear an outstanding but unknown scent.

    Possible search terms that seekers might really use are "handmade," "indie," "artisinal," and "niche." And don't forget to add the word "perfume," "cologne," or "fragrance" to these. This will be the most important word of all.

    Although it is not at all inevitable, you want to assume that some people will find your listing. This means you have a chance to give them a pitch for your fragrance. Beyond the basic listing outline eBay gives you, you can edit and add. EBay encourages you to write an extended description of your fragrance. You can use this opportunity not only to write about your fragrance but to introduce your company, lay our your credentials, expound on your creative philosophy, spell out your offer in detail, give your guarantee, tell whether returns will be accepted, and give a link to your website, blog, Facebook page or other internet presence you might have.

    One question eBay will ask you when you're making your lists is "how many do you have available?" This gives you the potential of using a single listing to sell more than one bottle of your perfume. You may not find your first experience with eBay productive but if, in time, you master the art of selling your fragrance on eBay, hypothetically you'll be able to sell many bottles from a single listing.

    When you specify your charge for shipping, eBay will, based on your location and method of shipping, calculate the approximate date a buyer can expect to receive their order. If you accept returns you can specify who will pay the return shipping; you or the buyer.

    Once your listing has been posted, you can check back to see how many people have viewed it. Your own views will be counted too so, if the number is small, it's likely it is your own views that are showing and, possibly, nobody has seen your offer.

    Here in the U.S. I can only ship by surface mail (which eBay translates as First Class, based on the small weight of a bottle of perfume.) If you are in a country other than the United States, you'll have to look up your local postal regulations and limit your offer to the areas to which you can make a shipment.

    Finally, since you are making an offer to sell perfume, you should be prepared to ship what you are selling -- a box, bubble wrap, and, when I ship perfume I like to place the bubble wrapped bottle inside a sealed baggie. It's bad if your bottle leaks. It's really bad if your bottle leaks and wets your box... and other people's mail.

    Will I get any activity from my offer on eBay? At this point I don't know. But eBay is too powerful a tool to blow off without testing.

    A final thought. At your blog, website or social media, you might mention that you fragrance or fragrances are available on eBay AND give a keyword that will lead people to your posted items.



    

Money back guarantee to get more orders? How likely is it to work for you?

    Money back guarantees were once standard. Advertising tests proved they could produce more orders. Then things changed. Marketers fudged their guarantees. The fine print took away what the large print offered. Buyers became skeptical and mistrustful. What did the money back guarantee really mean? The promise lost its power.

    Then the internet came along, full of spammers and scammers. Now not only are the buyers fearful of being tricked, the sellers -- with little understanding of the technology behind their platforms -- worry that, unless they are careful, they will fall victim to online grifters. Out goes the money back guarantee.

    Selling perfume online is a tough proposition. You need all the tricks in your bag to get the attention of prospects... and then -- what's really hard -- to get them to give you an order. I'm talking here about largely unknown (small, like mine) companies selling absolutely unknown fragrances. Can a money back guarantee have any value?

    If you've come across my ads for $timeout and Mimosa, you've seen my money back guarantee. I offer a full refund, no questions asked, and no need to return the bottle. This is not as crazy as it may seem.

    First, notice that this is an online offer which can be withdrawn at the click of a mouse. Are you thinking that so many people will respond that I'll be overwhelmed? I have never seen that happen. More likely I'll get fewer takers than I want, so it is extremely -- extremely -- unlikely that I'll get bombarded with orders from people who just want a free bottle of perfume.

    Think about that aspect of the proposition. These people are not anonymous. To accept my offer they must send me their name, street address, and credit card information. They must trust me to deliver the perfume they ordered. I have their payment before they have the perfume. Then they must trust me to honor my guarantee. In spite of all the risks and scams on the internet, for this offer to work there must be mutual trust.

    Right now these offers are a test. I'm curious to see how customers behave and how well they like my fragrances. My suspicion, based on much past experience, is that although I may find myself with a few tricky customers, most -- most -- will respect my offer and NOT take advantage of the easily available refund UNLESS the fragrance really fails to please. If the fragrance really fails to please and I get too many refund requests, this feedback will help guide the development of my next fragrance.

    There's one more reason why I'm experimenting with the combination of free shipping and the money back guarantee. It has to do with trademark rights. A trademark is established by offering "goods in commerce." In other words, putting your fragrance up for sale. To establish trademark rights you have to make a serious effort to sell your product; not to friends and relatives but to the public -- to strangers. Then, if your name is unique -- nobody else is using it or even a similar name -- you acquire legal rights to the name.

    If, in the future, you are approached by someone who wants to buy one of your names, one piece of information they will want from you is the "date of first sale." That helps establish the fact that not only have you offered your fragrance for sale but you have made sales. You really went out there and did it.

    By making my two perfume offers no-brainers for anyone who is halfway interested, I'm seeking to establish a pattern of sales at the earliest date possible. The fact that a sale might result in a refund has no bearing on the trademark rights. Once, in the past, I did sell the name of one of my fragrances. It may never happen again but, I want to be prepared.

Test -- Question everything -- guard your money!

    Even a simple, imperfect test can save you a lot of money and embarrassment -- or clear the way for a major success!

    Marketers test in order to evaluate opportunities without, spending much money. When daily newspapers were the test vehicle for mail order companies, many  offered advertisers a split run. A split run -- or a "perfect A/B split" as it was known -- involved printing two versions of an ad on a rotary press where plates for both pages could be mounted. When the press was run, every other paper off the press would carry the "B" version of the ad. When the newspapers were stacked and bundled for distribution, one paper would carry the "A" version of the ad and the next in the stack, the "B" version. Regardless of how distribution of the newspapers was carried out, regardless of the demographics of any particular neighborhood, half the readers would see the "A" version and the other half would see the "B" version.

    I recall one particular split run in which I was involved. The marketer had an ad that had been a success but was willing to run it against a new ad in a split run test. The new ad produced dramatically improved results and became the first stepping stone in developing a multi-million dollar business.

    General advertisers have also used newspapers for tests. An ad for a new product would be run with a store coupon in a small city newspaper. If enough coupons were redeemed, testing would be expanded until national distribution was achieved.

    Because daily newspapers are read and tossed, their special value was the quick answers they produced. In a few days the marketer could judge whether the product would be a success. When people read an ad in a newspaper, either they respond or they don't. Very few people redeem a coupon that has been saved for more than a week. Response, or lack of it, shows up within three or four days.

    Moving closer to testing opportunities that might be useful to you, upstart marketers such as the young Estee Lauder have gotten their start by making arrangements with an established retailer to allow them to set up a display table within the retailer's store to pitch a product of their own. For Estee, it was her first product, a skin cream. Success within the retailer's store gave the retailer good reason to stock her product. This was done without any large advertising expenditure.

The need to have a product to test

     To make a test it is assumed that you have a product to test. For a new perfume, this can be a problem if you're looking at the need for a run of 10,000 bottles or more to get the few dozen bottles you want for your test. Ten thousand bottles is a major commitment. If you can find a way to test the waters before making this commitment, it makes sense to do it.

"Reserve your bottle now"

    You can test the appeal of your fragrance and your promotion by giving potential customers a chance to "reserve" a bottle so they will be the first ones to receive a bottle when the product becomes available.

    This is a variation on the classic "dry testing" technique -- advertising a product you don't have, producing it if you get enough cash orders, and simply refunding buyers and dropping the product if it doesn't bring in enough orders. The genius and the problem with dry testing are that you're taking money for something that doesn't exist. The genius part is that you get a statistic on how many people are willing to part with their money and not just make a worthless commitment to buy it, if and when. The "problem" is in taking of money for something that doesn't exist. There are laws about this, even if you make instant refunds.

The dummy product

    Testing with a dummy product can teach you whether or not you can sell perfume (or whatever it is you're selling) but it won't tell you whether or not you can sell your perfume. Perhaps the best way I can explain this is to give an example from my own experience.

    We wanted to sell a fragrance to a particular audience, a particular demographic, but we weren’t sure if these people would buy it. A competitor was selling a product similar to what we wanted to sell so we tracked down the competitor's source and bought a small supply. Our purpose was not to make an immediate profit but to see how well this product would sell. If it sold well (which it did) our plan was to knock it off (which we did). By having this other product -- a dummy product (fragrance but not our own fragrance) -- we were able to make our test, spending no more than a few hundred dollars for the inventory and next to nothing for the advertising. This simple, inexpensive test gave us "numbers" that showed we could make good money by developing and selling a fragrance of our own.

Buy for a larger quantity but fill only a handful of bottles

    Sometimes you must plan to produce 10,000 or more bottles of your fragrance in order to get the juice made and to purchase the particular bottle you want. But you don't have to fill all 10,000 bottles. You might fill only 500 or so and do some test marketing with them. By doing this you give yourself two advantages. First, if your promotion flops and you can be pretty sure that the flop isn't due to the scent, you can rename the fragrance, fill another 500 bottles and take another shot at it with the new name and a new promotion.

    Then, if things really go badly for you, you can simply sell the empty bottles, the bottles you didn't fill or label, along with the caps or sprays that went with them. Your boxes will be a total loss unless you can find someone who wants to try and sell your fragrance (or their own) using the name on the box.

How do you use these ideas?

    For a retail store, testing is always difficult. What is important is to track your inventory and sales. When certain items sell better than others, you want to spot this quickly and take advantage of it. You'll need precise numbers, not hunches.

    Beyond this, keep your eyes open. Question. Be alert for new ways to test that relate to your situation. Decisions based on hard data -- facts which may or may not please you -- are what will make your business grow.

"Advanced" merchandise acquisition strategies

    Last week I wrote about what I call the "standard" methods of acquiring merchandise for a perfume store. But I also suggested that while you could get a business started using these methods, you would be unlikely to earn more than a minimal profit. Yes, even a minimal profit means you'll be able to pay your rent but if your thinking is like mine, you'll be looking for ways to make more. Today I want to explore with you some "advanced" merchandise acquisition strategies. Whether or not you find any particular one helpful, they should get you thinking of possibilities and looking around for opportunities.

    In acquiring merchandise, the maxim is "buy cheap, sell dear." The importance of this cannot be overemphasized. The spread between what you pay for your merchandise and what you can sell it for is what gives your your profit. If that spread is small, unless you can achieve dramatic volume, your profit will be small. To achieve dramatic profits, you are going to need a very healthy spread on one or more popular products.

Closeouts

    There are dealers in a number of fields that buy closeouts and overstocks. Many of my own bottles come from a closeout source (McKernan). Depending on the item and its marketability you might get it for pennies on the dollar. But closeout sources will have minimum order requirements that you might find scary. With bottles, I've bought closeouts because I know that what doesn't get used for one project in time will be used for another. And I've always had room to store those cases of bottles I'm setting aside for future use.

    The problem with closeout sources is that they lack continuity. Once an item is gone, it's gone. No restocking. If you need more of something you got through a closeout you might have to go to the original source and pay full price, or you may not be able to find it at all. It could be discontinued.

    You can explore a number of closeout sources for perfume and scented products. Keep in mind you are not looking for discount sellers who sell by the (discounted) individual piece, but closeout lots, cases of merchandise. Keep in mind that because closeout dealers take advantage of specific purchasing opportunities, their inventory is constantly changing. What they have today might be gone tomorrow -- and they are hoping it will be gone! Again, be prepared to buy in bulk, getting perhaps a good deal more than you want at the moment. But, if the price is right... And you may be able to split an order with another shopkeeper.

Become your own closeout broker, sort of...

    First time perfume marketers often fail. When they fail they fail with unsold perfume. Often their perfumes are quite good, developed and packaged by professionals, but the marketing didn't click. The marketer may not have the money or the will to go at it again. These ventures are too small to attract the attention of established closeout brokers but they can a ripe target for you. You will need some tact and negotiating skills but, if you can locate one or more of these failed ventures, there is a good chance you will be able to purchase some or all of their perfume that didn't sell. To find these situations, follow trade magazines and press releases. Look for perfume launches by new companies. Then, after a number of months, look to see if they are still in business. Many will not be and they might be happy to talk to you.

    On a smaller scale there are creators of perfume who have produced what they cannot sell. They may be eager to sell their unsold inventory and, if a fragrance is good but selling skill is lacking, they might be willing to provide you with a continuous supply of their fragrance at close to cost -- or, if motivated by ego, they might be willing to take a loss on every bottle you take from them, just so they can boast that their fragrance is a success.

Find one hot item and purchase it in bulk

    If you start off with a good variety of merchandise, you may soon find one or two items selling better than the rest -- bringing in a significant share of your profit -- but because you don't yet have a significant markup on these items they aren't yet doing anything dynamic for you. Here's where you have an opportunity.

    Track down the best source for these items and find out what kind of a price you could get if you were buying them in bulk. Be prepared to put a big wad of cash into the selected item, knowing it might take a while to sell all of what you are buying but, as you sell it, you'll be getting your money back with juicier profits.

    A friend with a small store competing against far larger stores adopted this strategy. He could sell the hot item for close to what big stores were charging because he had bought it in bulk. This brought customers to his store. When they came, they bought other items. His business flourished.

Have the hot item made for you

    Sometimes you have the frustration of discovering you have a hot item but you can't find any source that, even in bulk, will give you a price that can make this item really profitable. Here's where -- if you can deal with the complexities and risk the money -- you can go to a manufacturer and have a similar product made exclusively for you. This can give you a very, very low price per unit which means a very, very good markup.

    This strategy has two advantages. First, you already know from your sales reports that this item is going to sell really well. And you know you are getting it for less than what your competitors, who are buying through wholesalers, are paying for their version.

    But there's another huge benefit. This product is now yours exclusively. A competitor could offer a similar product but, once you establish an image for your version, "similar" doesn't command the same price. Think of having a hot item you can sell for ten times what it cost you! Markups like this are what will make your business grow. In time you may be able to develop a number of products with markups like this. Then the profits from all your other products will be icing on the cake.

    In my next article I will write about testing -- a very important issue but difficult for a small retail business. (These articles go out in emails and, if you wish, you can sign up for them here.)
   

Acquiring inventory for your perfume store

 
    Last week I wrote the first in a series of articles about opening your own perfume store. I promised to write about acquiring inventory this week. One way to do it is to create your own fragrance products -- perfumes, colognes, soaps, candles, incense, etc. -- I've written about creating your own perfume here and here and about developing a wholesale fragrance business here. But suppose you just want to sell fragranced products in your store. How do you go about finding products for your store? You need to find products people will buy and you have to obtain them at the "right" price. If your store is small and your business is new it can surprise you to discover that established brands won't sell to you, nor will they allow their distributors sell to you. What do you do now?

    Obtaining inventory for a small perfume store is an art.

    While you may not be able to obtain the famous stuff, you should note that your competitors can't get it either, yet they are obtaining inventory and making sales. Before we look at what your competitors are doing, a word of warning.

    When you are setting up your new store (or folding table) and are in need of inventory, there are easily found sources that are happy to sell you all the off-brand perfume you want at their non-negotiable "list" prices. They will encourage you by telling you how to set your retail price and, from that price, show you what a great markup you will have, a "standard" markup they may call it, but beware. In the first place, their perfume might not sell in your store at the retail price they suggest to you. Then, if you are a novice, you might not realize the markup they promise is really inadequate. And, when you find you can't sell their fragrances for the retail prices they suggest, when you have to slash your prices to make sales, you are also cutting your markups. Now what you get from a sale will be far less that what you anticipated. This issue is discussed in depth in my book, Creating Your Own Perfume With A 1700 Percent Markup! Now it's time to look at your successful competitors and study what they are doing.

    You can learn a lot about what your customers will like and buy by studying your competitors. Whether your competitors are online or in local shops, see what they are offering and promoting with advertising or social media week after week. These will be the items that are selling and these will be the items you will want to acquire for your store. If it sells for them, it will sell for you. The question now is how to obtain the items your competitors are selling successfully and how to get those items at the same or a similar price.

    In most cases the same wholesalers and distributors who are selling to your competitors will also sell to you. In most cases it is unlikely your competitors are buying enough of any one item to get an exclusive on it. So your first step is to track down the vendors that are selling to your competitors.

    How do you track down these vendors? Sometimes it is as simple as asking a competitor where they get their merchandise. It may sound unlikely but it happens more often than you might imagine, particularly when there is a major source that "everybody" (but you!) knows about and they are confident that, if they don't share the information with you, you will soon enough discover it on your own.

    If this strategy fails, a standard strategy is to buy a popular item from a competitor -- provided it is packaged and labeled -- and then look to the packaging for clues as to its source and the source's address. Even a few initials on a box or bottle combined with a Google search can often turn up the original source. A wily competitor will obscure this information on the items they sell but most of your competitors will be too lazy or too unaware to do this.

    The issue now will be price. You want to be sure the vendor is giving you the same price your competitors are getting. Here you may have to do some negotiating, to convince the vendor that in time you are likely to become a very good customer, so the vendor should treat you well now. And it doesn't hurt to ask what you would have to do to get lower prices.

    Aside from supplying your current needs, vendors can be useful because they are aware of trends and what might become a hot item tomorrow. It helps to cultivate a good relationship with vendors. Pay what you agreed to pay and pay on time. Don't try to get tricky with payments to save a few dollars now. This could cost you some needed good will later.

    A starting point for stocking your store is to offer the same or similar merchandise as your competitors are selling. This won't make you rich but it will help you start to generate a cash flow.

Go for variety

    As you don't yet know what your customers want (since you haven't yet opened your store!) get some variety in your offerings -- don't have it all the same. Why? Because by having a variety of scented products, for example, you will get a sense of what will sell profitably and what won't sell. In going for variety keep your ordering for each item minimal. If it sells profitably, you can get more . If it doesn't sell, you haven't lost much. Information is your best friend and, by being able to see what people select out of a range of products -- especially a variety of perfumes and scented products -- you'll become a more effective buyer going forward.

    Copying your competitors is a starting point. Do it carefully and thoughtfully and you should be able to get your business started. Hard work will keep your shop going but, if you want to make more than just a living, you should look into some "advanced" merchandise acquisition strategies. I'll write about them next week.

   

Starting a perfume business with a shop of your own

    Is starting a perfume business in India or the Philippines any different than starting a perfume business in North America or Europe? While regulatory issues and supply chains differ from country to country and sometimes from region to region, the business fundamentals are the same. To have a perfume business you must be able to make profitable sales. To make profitable sales you must have product you can sell at a profit. Today I want to write about getting started.
   
    How does a business that sells goods to consumers get started? Sometimes it gets started when you buy a franchise or when you put up a lot of money to open your own store. But how can you do it if you don't have that kind of money? Would you be surprised to learn that people have been doing it, successfully, for years?

    More than one American fortune was founded by someone who peddled goods from town to town, traveling on foot, working out of a backpack. In New York City I recall seeing African men staking out sidewalk spaces and, seated on the sidewalk, selling out of duffel bags.

    American peddlers who started out on foot invested their profits, first in a horse so they could travel farther, then in a wagon so they could carry more merchandise, and finally in a store. As profits grew, sometimes they opened a second store.

    Today we have shopkeepers whose "shop" is a folding table set up at a flea market, craft fair, or farm market. And some people sell out of the trunk of their car. They have found that even with these low profile "store fronts" they can make money.

    Regardless of whether you start with a peddlers pack, a folding table, or a  store, the dynamics of your business are the same. You have set yourself up as a "shopkeeper" or "retailer" and you confront all the problems and opportunities of others in your trade. Let's look at some of what is involved.

    First of all, your shop must become the center of your life. You must be passionate about it, proud of it, and totally committed to it. You must be constantly focused on making your shop, no matter how small, a more effective money making machine. Making your shop spin money must become everything.

    Whether your store is brick and mortar or a folding table, feeling comfortable with the "traffic" is essential. If you want people to take an interest in your merchandise, your first step is to take an interest in them.

    Always be clean, neat, and nicely dressed. You want people to feel comfortable with you. You don't, by your dress or mannerisms, want to distract them from the merchandise.

    Charm your customers by talking to them, finding out what they might like  and helping them find it and buy it.

    Honest dealings build trust and trust brings additional sales and new customers.

    Be prepared to be present at regular hours. You are the store's image. People will want to talk to you and feel they know you. Schmoozing with customers helps build business. Arrive before opening time and stay a bit past closing time. Show that you are the captain of the ship.

    How you display your merchandise matters, even when you are selling off the top of a folding table. Make your display an example of the pride you take in your business. Feature the items that should be featured. Highlight the winners. Don't give every item the same amount of shelf space or the same treatment.

    Start-up money isn't really an issue because, if you have the right motivation, you can get started with a folding table. If you invest in a store but don't have the right motivation (perhaps because someone gave you the money to open the store and you didn't earn that money yourself), you are likely to fail. To succeed you are really going to have to put your back into it.

    One final warning. Ego and the wrong kind of pride can block you from opportunities. If you have no money but could sell successfully off a folding table BUT are too proud to "lower yourself" to that level, beware! If you have money to rent an inexpensive store but, due to your ego, will only consider a fancier store and location, beware! Starting your own business may be a bad idea for you. (FOOTNOTE: Barneys, the famous clothing store which became a chain, was started by Barney Pressman at 7th Avenue and 17th Street, for clothing a very obscure location. I remember buying some very nice Burberry trousers there before the store became famous and the goods became far more expensive.)

    I haven't mentioned inventory; how to find it and how to buy it. Buying right  is your ticket to success and I'll write about it next week.
   

Two kinds of perfume, two kinds of risk

    There are perfumes that "everybody" likes and there are perfumes that some people love passionately while others can't stand them. Where is the money? Where is the risk?

    What I am about to suggest is not a universal rule but something you might consider. Trying to create a fragrance that everybody likes can be risky. Unlike those of major fragrance marketers, your fragrances will not reach the masses. You don't have enough money. Your fragrances can reach only select markets and a handful of consumers and, in these select markets, you'll find yourself competing with mass market fragrances -- and they will be better than yours, if yours were developed to please everyone.
   
    But think of the people you expect to promote to. What can you offer them that they can't get from the popular, well promoted, mass market fragrances so easily available to them? You're unlikely to impress them with the fine quality of your perfume. You, or whoever is making your perfume, will simply not be as good as the top professionals. But you can offer them originality. You can offer beautiful scents that are out of the ordinary and, because they are a bit "different" -- not following current fashion trends -- they will be "off limits" to the perfumers who are paid to create for the mass markets.

    The risk is that because these scents are out of the ordinary, not everybody will like them. Some people may hate them. But even those who hate them can help you sell, by talking about them, by generating buzz that will get more people to look at your fragrances. Some who look will buy.

    Yes, you must create a fragrance that has merit. You must create a fragrance in which some will see the beauty. You must create a fragrance that some will be passionate about, regardless of what others say.

    But look now what has happened to the risk. Rather than being a marketing issue where you're bumping heads with major fragrance marketers, now your risk is that you may not be able to create that beautiful but controversial fragrance! But this is a risk that can be overcome by common sense, hard work, and testing. And the costs of launching and promoting a new perfume that is painfully "ordinary" carries a far greater risk.

How can I reduce my cost per bottle without risking a big financial hit?

    In my last message I wrote about SCALE and explained that the profit is greatest when production and sales closely match. Unsold inventory is a drain on profit. But it's also a fact that large orders can give each of your components a lower per-item cost. Moreover, with a larger order you have access to a greater range of bottles, pumps, boxes, and even fragrances. The question is, are there purchasing strategies that will give you the best of both worlds?

    The answer depends (this may sound corny!) on your business plan, your long range goals. Is your first venture into perfume being planned as a one-shot venture -- if you make money perhaps you'll go deeper; if you don't make money, that's the end of it -- or does your plan reach out beyond your first promotion?

    If your planning calls for a moon shot -- one "make it or break it" promotion -- then the smart plan is to follow the strategy outlined in my last message which is to match, as far as possible, your production with your likely sales so that, when you've finished, there will be "no paid for but unsold" inventory dragging down your profit.

On the other hand...

 

    If you are planning "perfume" long range, your first venture is simply a test, and you do want to keep it small, working for orders from just the very best prospects. But now there are some ways you can reduce your cost per bottle.

    Say for your test you are hoping for 1,000 orders. Does that seem too small? OK, we'll bump it up to 3,000 orders, increasing our risk just a bit. So, while we will need to produce 3,000 bottles of perfume, we aren’t limited to ordering 3,000 units of each component.

    But before ordering any components in larger quantities we have to estimate how far our program might go. Ultimately will we sell 20,000 bottles, 40,000, or more? What do we have available in funds?

    Look at an example. For our first promotion our expectation is that we will sell 3,000 bottles. But within a short time, when our first results come in, we expect we'll be able to sell at least another 7,000 bottles, and we have the money available to produce 10,000 bottles without straining our budget. So what do we do?

    We buy 10,000 pieces of each component we need but we assemble only 3,000 bottles. Our only exception could be the perfume itself of which we may be able to  buy in a minimal amount, just in case our market really hates the scent.

    By assembling only 3,000 bottles and keeping the rest of our inventory in reserve we gain flexibility. Should our first promotion bomb because of the name, we can change the name because we haven't yet printed those 7,000 other labels. Should we need more perfume immediately, we will be ready with the necessary bottles, pumps and boxes.

    By ordering components in quantities of 10,00 each instead of 3,000 each there is a chance that we will significantly reduce our cost per bottle. And, because the bottles we do not fill are not "leftovers" but, rather, inventory for the next stage of our project, they do not become a drag on profits.

Settle your strategy before you get started

 

    Are you going for a one-shot promotion or do you have business building plans? If you are planning a one-shot, limit your buying to what you expect to need now. The cost per bottle will be more than if you bought in a larger quantity but unsold bottles won't be sucking the profit out of your sales.

    On the other hand, if this is to be the beginning of , and you can consider your first promotion to be a test, it makes sense to buy your components in larger quantities. Only don't get too carried away and buy so much inventory that you won't be able to use in this lifetime!

Misunderstandings about SCALE could be crushing your urge to launch your own perfume

   
     "Scale" simply refers to the SIZE or your promotion. Planning for unlimited perfume sales puts you at a disadvantage and dramatically increases your risk. Why? Because, to be fully profitable, you must sell out your full production -- no leftover inventory. Why? Because the production cost of every unsold bottle reduces the profit you would have made.

    Now it can be hard, almost impossible, to guess the number of bottles a promotion will sell. But you can guess with some accuracy at the number of bottles you will not sell. This is a guidepost for establishing the scale of your promotion.

    For example, you have good reason to believe -- perhaps due to your limited financing and distribution -- that you almost certainly will not sell 20,000 bottles. So the scale on which you plan your promotion will not anticipate the sale of 20,000 bottles. But what will the right number be?
     
   You need to consider the size of your hot market. How many people are really likely to buy your perfume?

    Then you need to consider the cost to reach these people. Suppose (this may seem a bit depressing!) that you have 12,000 really hot prospects for your perfume -- but, when you look at the best possible distribution you will be able to arrange, your fragrance will only be in stores that serve 3,000 out of that 12,000 -- and you need all the money you have to promote your fragrance to those 3,000 hot prospects.

    It is certainly human to imagine that somehow you'll be able to reach those other 9,000 hot prospects. It is certainly human feel you might go on to sell 20,000 bottles of your perfume. But your immediate project is to MAKE MONEY.

    You can make money by planning to produce and sell 3,000 bottles of your fragrance. If you are correct and you really have a hot market that will produce 3,000 sales, and you produce only 3,000 bottles, you end up with no waste, just profit.

    Now you can look farther ahead. Now you have some experience with the sale of your fragrance and you have some money -- the profit you made on those bottles you sold. Now you can start planning to target some or all of the 9,000 hot prospects that you couldn't target the first time around. Perhaps you'll split those 9,000 prospects into groups of 4,500. If all continues to go well for you, you'll sell to the first group of 4,500 successfully and then go on to the last group to complete your success.

    Then you can look for additional markets.

    But what about my cost per bottle? (To be continued...)

Promotion -- What you need to get down cold before you invest in a perfume

 
  Don't spend money developing a fragrance unless you've got a solid plan to promote it -- and coming up with a solid plan to promote a fragrance is not easy.

    Go back to market, scale, and distribution to see how many orders you will need to make your promotion profitable and where you expect those orders to come from. Your challenge now is to turn this market -- large or small -- into a market of buyers.

    There is no magic to making sales. One promoter has said that enthusiasm is more powerful than truth or fiction. Buying a fragrance is an emotional decision and, to make sales, the emotions have to be stirred. Logic won't do it.

    But your efforts to ignite emotion must be guided. They must follow a well thought out plan. You cannot sell to people unless you can relate to them and they to you. This is why certain "super salespeople" can move from one product to another and continue to sell successfully. They understand the buyers.

    Do not expect the scent of your fragrance to sell itself. In the first place, if you are relying on sales to people who have sampled your fragrance you are in trouble. Few people will have the opportunity to sample your fragrance, even if you are fortunate enough to have it in a number of stores. Even those who are able to smell it, and like it, will need guidance to carry them to the point of making a purchase. It is essential that you begin to develop buzz for your fragrance BEFORE people confront the perfume itself.

    The buzz is what brings people into the store or, for those who may happen to be shopping in a store that carries your fragrance, to seek out your display. Don't expect people to just stumble across it. You have to drive them, impassion them, win them to your point of view BEFORE they confront the fragrance itself.

    How do you do this? What are the hooks? Ask yourself, "What is it that generates an emotional response?"

    There are a number of lines you can work along. The "author" of the fragrance can generate an emotional response if he or she has a personal story that is compelling and emotional. Here is where the emotion for celebrity fragrances is generated but, looking into your own personal history, you may find that you have a story about yourself and your perfume that can generate an emotional pull that will then translates into sales.

    You might find an emotional pull in the story you develop for your fragrance. What were you thinking when you created it or had it created for you? Was there a theme a bit unusual, a bit attention grabbing, that others can relate to? Will that theme move their hearts?

    Sometimes people fall in love with a brand and take an interest in any new product that brand releases. Being new in the field does not rule out the possibility of people being attracted to your brand. Look at all the upstart brands found in the wine racks of liquor stores. The brand NAMES are witty and clever and they have appeal for their iconoclastic take on wine vending. Wine, like perfume, is sold for the most part to people who are not experts, so that clever brand name is important. Then, under the brand name come the individual wines -- or fragrances.

    Relationships can create strong emotional bonds and pulls toward the cash register. If your prospects feel that "you are one of them" and feel they can relate to you, they may want to "support" you in your endeavor. Making your own personality part of your presentation can go a long way... if your personality actually matches that of the people you have targeted.

The lesson

    The lesson is simple. You're not ready to develop and launch a new fragrance until you've devised a way to reach your target market and bond with these people in some way that will create an emotional connection, one that drives them to try your fragrance. It's as simple as that.
   

When it makes sense to invest in a perfume

    The thought of marketing your own perfume and making a pot of money from your efforts is tantalizing. But when should you do it? Or should I say, "attempt it"? There are times when it makes no sense at all and times when "you'd be a fool not to do it." Here are some guidelines that can help you spot opportunities and avoid costly fiascos.   

 

Four Essentials

 

    Before you invest money in a perfume you need to have four areas nailed down. They must be secure rather than "probably okay." They are (1) The market, (2) Distribution, (3) Promotion, and (4) The knowledge of how to have your perfume produced for you at the lowest reasonable cost. Let's look at each of these considerations.

    The Market

    It makes no sense to develop a perfume unless you have people to sell it to. Here you have to think about numbers. How many people are there in your market that are candidates for your new perfume? Really what you are looking for is a specific opportunity, a gathering of people that, for certain specific reasons, are likely candidates to become customers for your perfume.
    The reasons cannot be general. You cannot proceed thinking "women always love a new perfume", or "men are attracted to a new cologne." You can't proceed thinking "everybody will love my perfume if I put a clever spin on the marketing." When I had my great success with "P" cologne it was because I had a captive market of older men, most of whom had never bought a fragrance in their lives, but who would try almost anything my company offered them once we had made an appealing pitch to them. You have to find a very specific opportunity for your perfume where the odds that the right number of people will buy from you is in your favor, before you launch your project.
    Looking at "numbers" and your specific market you must estimate the size of your market and then scale your project to that size. If your real market is only a few thousand people (often the case!) you have to scale your project -- your production and marketing expenses -- to insure that you'll be able to make a profit (an outstanding profit!) developing your perfume for that market.
    The first step in determining whether it makes sense to invest in a perfume is to identify this opportunity, a market that, for specific reasons, will be receptive to your perfume.

    Distribution

    How are people going to go about buying your perfume? How will you set up your distribution? "Internet" is the easy answer (which is really a highly complex approach) but I've had entrepreneurial hopefuls also cite "Macy’s" and "Walmart." Why not QVC and Duty Free Shops? None of these are the answer unless you have carefully prepared the way. Bint El Sudan (from Bush Boak Allen) -- a huge marketing success in Africa of the 1930's, '40's, and '50's -- bypassed the established trading houses and was distributed through mammy traders, women who sold goods in village market places. The fame of Bint El Sudan spread through the social media of the day -- word of mouth.
    "Internet" itself is not a distribution system. There are many online possibilities, your own website, affiliate marketing, etsy, eBay and more. But the challenge is in getting people to come to these various sites to make their purchase. The advantage of "internet" is that there are no barriers to setting it up. From your home office you can go out and do it.
    Retail stores have the similar drawback of being useless unless you can drive motivated traffic to them. The larger chains, the Macy's and Walmarts of this world, will have no interest in working with you (unless you are heavily funded and have brought on board some key industry veterans who can open doors for you.)
    Smaller retail stores, particularly local retail stores, can be more receptive to displaying your fragrance but establishing a relationship with these stores and servicing each "account" requires that you really think in terms of developing a distribution network that can be used for more than a single perfume. No one store will sell enough of your fragrance to make it profitable.

    Promotion

    Regardless of what your distribution may be, you can not expect to make sales unless you have developed a promotion that will motivate people to want to try your perfume to the extent that they will interact with your distribution system to buy your perfume.
    For example, if you are selling from a website (the easiest distribution to set up), what are you going to do to round up motivated prospects and drive them to that website? A website can only take sales (like a retail store). For the most part if will not executed the step of making people want to try your perfume. This is something you have to do and, until you can work up a plan for a promotional program that will make enough converts to make your perfume profitable, investing in your own perfume will be folly.
    How do you make these converts? How do you inspire people to seek out your perfume and give it a try? This is one of the great mysteries of marketing for which there is no stock solution. But it can be said that following a "business school" formula will probably not do the job for you. For you, a really powerful hook will be essential, otherwise hang on to your money for now.

    The knowledge of how to have your perfume produced at the lowest reasonable cost

    "Buy low, sell high" -- the rule of marketing success. If you buy at the wrong price, that is, if you pay too much to have your perfume made for you, profitable sales become impossible. The people who make money will perfume are the people who have studied all the costs that go into producing a bottle of perfume and how each can be minimized or controlled without degrading the quality of the finished product. This is true whether you are producing your fragrance yourself, in your garage or barn, or whether you are working with a consultant or through a fulfillment house ("assembly house" or "contract packager").
    You really have to look at all your costs before you get started. My own concern is usually with the cost to produce the fragrance. Have I fought for realistically low prices from each vendor? Have I cut every corner that can be cut without cheapening the product or compromising quality? You want to avoid middlemen as much as possible, particularly those who offer you a "package deal" if you'll follow some formula they've worked out to make their profit from entrepreneurial hopefuls who are ignorant of a manufacturer's cost for services and materials.
    Likewise with both promotion and distribution. Is someone ready to sell you an advertising program? Media is always looking for advertisers but is it media that can do something for you? Media salespeople have their statistics but none will really apply to your perfume. You have to think this through quite clearly. Where are your best prospects? How can you reach them? What will it cost?
    It is easy but not so effective to simply buy an ad and hope for the best. (I recall with embarrassment spending $10,000 for a page in a major fashion magazine -- without first testing -- and not making one sale -- thus this warning.
    If you have to convert people to your cause and see social media as a way to do it, you've got to consider the time and attention you will have to devote to the project before you might be in a position to launch your perfume. "Time is money" as they say and this truism tends to be forgotten when "free" social media are available.

Summary

 

    Here then are the basic elements that must come together before it makes sense to invest in a perfume. But look, they can and do come together for those with open eyes and, when they do, the results can be quite profitable.