Why it's hard to make money if you have only one product to sell

    A lesson from a mentor when I was very new in business: "Before you offer your first product for sale, have a second product ready." Why? Because the cost of making that second sale will be much lower then the cost of making you initial sale. Thus your transaction with the customer becomes more profitable, with no additional advertising expense.

    Did you know that many marketers are willing to take a loss on their first sale to acquire a new customer, because they know, from past statistics, that each new customer will bring them more than enough profit to make up for the money lost on the first sale. The hard part is acquiring new customers.

    Ask yourself why your wireless provider gives you a mobile phone for far less than the cost of the phone to them. Or why does that ink jet printer cost so little while the ink costs so much!

    Wise marketers know so well that acquiring a new customer is many times more expensive than making additional sales to an existing customer. Think of the Apple computer business for an example. Once Apple acquires a new customer -- say a teen or college student -- that customer is likely to continue buying Apple products for YEARS .. perhaps even FOR LIFE.

    Direct sellers who ship their products know that the best time to get a second order from a customer is before the first order has even been delivered! Why? Because they are catching the customer at the high point of their enthusiasm -- the point at which the product which has been ordered is still a fulfillment of a dream rather than something tangible which can be examined. The marketer is credited with providing this seemingly miraculous wish fulfillment. When the product arrives the customer, hopefully, will still be happy with it but now it is tangible and some of the mystique rubs off as it is more easily compared to someone else's product.

    Let's talk about your perfume. Are you about to launch a perfume? What else will you be selling? Look at why that second product is so important. Start by considering the time and effort and money you put into making a sale. Deduct that from the revenue you made on that first sale. Perhaps now that sale doesn't look so profitable and you wonder how others are making so much money.

    Let's assume your customer was happy with the perfume you sold her. Now let's suppose you had a second product available, right then and there, that your happy customer could, and would, buy. The sale of that second product can be made without all the fuss, effort, and expense that went into making the initial sale, hence you get to keep -- as profit -- a larger portion of the revenue you received.

    In selling perfume you probably will not want to hit your customer with a second perfume before she has used a bit of the first. But, if your first product is a woman's fragrance, your second, the follow-up product, might be a man's cologne, or a scarf, or a bracelet.

    Remember, for this second product you're not putting money into advertising. You're using the customer's enthusiasm alone to make the sale.

    When you have a customer who is responding to your sales presentation, don't lose out on potential revenue from that customer by not having a second product to sell!

Can you afford a Launch Party?

   I doubt whether any celebrity perfume has been launched in the last twenty years without a launch party -- a gala event with a champagne, wine, and cheese and famous people, all come to see this new perfume take off like a rocket.

    So when YOU are launching YOUR new perfume, shouldn't you hold a fabulous -- or as fabulous as you can afford -- launch party?

    Maybe not.

    Give a thought to the raw mechanics of the event. Party costs money. Money comes from perfume sales. People who come to celebrity perfume launch parties are not buyers. They are going to be GIVEN the perfume, free.

    For the celebrity perfume launch, the goal is publicity. The cost of the party is (expected to be) far less than the value of the publicity. Have you ever heard of a reviewer come to a celebrity launch party, drink the champagne, mix with the rich and famous, then write a bad review? That would be the end of their free party going days.

    For the celebrity perfume, the launch party publicity is valuable because it gets spread so widely among the celebrity's fans -- on websites, blogs, social media, etc., etc. The message is spread to the people who WILL (it is, with great hope, expected) BUY the perfume.

    The whole point of a celebrity perfume is that the celebrity has FOLLOWERS who WILL PAY to please and show their support for the celebrity.

    But what about you?

    If you were to hold a launch party for your perfume, who would attend?

    Certainly you could invite the press. Depending on their schedules and how hard up they were for "news," they would or would not come to drink your wine and snack on your goodies. But for sure they won't come to buy your perfume.

    Your friends (hopefully) will come, hoping you will give them a bottle.

    Your mother and father may come, free bottle or not.

    In fact, you'll probably invite everyone you know who has any interest in your perfume -- but aren't these the people who might BUY your perfume ... the people you EXPECT to buy, thanks to the publicity???

    Think about the effort and expense of the party and the valuable marketing data you are likely to gather -- none!

    Then think what might happen if you made a deal with a single store to stand at a booth for an afternoon and try to sell your perfume to passing customers.

    It would be tough work for many an introverted creator but the lessons learned about selling perfume would be ... VERY, VERY valuable.

    Now think about it. If you seriously want to sell perfume, which approach would work better?

    (These comments were suggested by a reading of Paul Graham's article, "Do Things That Don't Scale.")

Ten steps to creating your own perfume formula -- and one simple step to get it made

    You can't sell a perfume that doesn't exist -- so here's how you can get your custom perfume made in just a matter of weeks. Let me tell you about The Perfumer's Workbook and a company that will make a custom fragrance you have designed, even if your order is very small.

    The Perfumer's Workbook is a computer program used to design fragrances for perfumes, colognes, and other fragranced products. It is used by industry professionals and hobbyists -- and entrepreneurs who can make money if they have a perfume to sell but may know and care nothing about how perfume is made.

    The "big" version of The Perfumer's Workbook used by big companies with big computer systems. It can come with on-site installation, technical assistance, and employee training and the price currently starts on the high side of $5,000.

     But this full version includes features largely of interest only to big companies developing laundry detergents, deodorants, and toilet cleaners. Stuff like that.

    For those focused only on their own perfumes and colognes there is the more widely used "student" version of The Perfumer's Workbook that runs on a normal desktop, laptop, or tablet computer -- hardware that you are likely to own yourself.

    By using the wizards that are part of this very affordable version of The Perfumer's Workbook you can design your own professional perfume or cologne in an hour or less, even if you've never designed a perfume before.

Here's what it means to "design" a perfume

    You may  have an idea for a perfume you would like to create. You may have the smell in your head. But if you want someone to make that perfume for you, you must translate that mental scent into a list of ingredients -- a formula. Without a formula, you can't get your perfume made.

    The Odor Design Wizard in The Perfumer's Workbook gives you a simple, accurate tool to produce the formula for your perfume from your mental image. With that formula in your hand, you can now go to any perfume manufacturing business and have your fragrance made. But first look at the steps you will take to convert your idea into a formula.

Ten simple steps (illustrated with screenshots)

    You can see how easy it is to design your own perfume by looking at this series of screenshots of a fragrance being designed using The Perfumer's Workbook. Just ten steps. That's all there is too it but when you look at the last screenshot you will see how complex the formula really is.

    When you use The Perfumer's Workbook, your perfume will have a similar complexity and you may not have a clue as to what any of these ingredients are or where they could be purchased. It doesn't matter. You now have what you need to get your perfume or cologne made -- the formula.

Now get a sample

    Once you have finished designing your perfume and have used The Perfumer's Workbook to produce its formula, your next step is to have a sample made. Then you will be able to smell what you have created.

    How do you get this sample? When you look at the formula you have created you will be confronted with a list of anywhere from 30 to 50 or more ingredients, each of which have to be measured and blended very precisely.

    Here is where PerfumersWorld comes into the picture. Not only have they created The Perfumer's Workbook, their fragrance technicians stand ready to make and mail to you a sample of your perfume or cologne for little more than the cost of postage.

    How does it work? How do you place your order? The Perfumer's Workbook offers a link you can use to transmit your formula directly to PerfumersWorld. Inn just a few days they will have your sample in the mail to you and you can then smell what you have created. It's as simple as that. And again, the cost to you is barely more than what it costs PerfumersWorld to mail it to you.

What comes next?

    If you like what you have created, PerfumersWorld can make more of the same for you. In fact they can make up any quantity of your perfume you may need, large or small. But you control the formula. It is yours and it is in your hands. If you would prefer to have it made up by someone else, that's up to you. You are under no obligation to PerfumersWorld.

Look at these screenshots and decide for yourself.

    You can see a screenshot for each of the Odor Design Wizard's steps here.

    You can get more insights into The Perfumer's Workbook through the descriptions and screenshots starting that this page.

    If you want or need a perfume to sell, this is an absolutely brilliant way to get it, at the lowest possible cost.

Finding Your Own Niche (It's going to be small!)

    If I had the key to helping perfume makers get their perfumes into Macy's and Walmart, I could make a lot of money very quickly. What I try to get people to understand is that the "problem" is not that Macy's or Walmart doesn't want your perfume. The problem is that Macy's and Walmart know that in their stores, your perfumes will not make sales. Even if a few bottles were sold (which might be exciting for you!) the loss the stores would take by giving you valuable retail space, that could be making money for them with someone else's product, would simply make no sense to them.

    Add to that your cost of preparing your product for sale to one of the large retailers. Have you looked into their "Vendor Requirements" which can be found at their websites. Most large retailers publish their requirements for vendors and if you're just making perfume without some serious money, serious promotion, and serious business management behind you, you simply won't qualify to be accepted as a vendor by a large retailer. It's nothing personal. It's just business.

    So that do you do to make money with your perfume?

Think business!

    Your artistic side goes into creating your fragrance. Then your business side has to take over to develop a way to sell it.

    Business means profit and loss. When you spend more than you take in, you've got a loss. If you were trying to prepare your perfume for sale at Macy's and you didn't have a following like Justin Bieber, you would take a loss -- a big one.

    But, using your business head, think out ways you could sell your perfume that can be worked within your realistic resources.

    Look at a simple element -- a UPC (universal product code). Most larger retailers and many mid-size ones will expect you to have a UPC on your box. Box? Think about it. If your operation is really small, just producing a box can be a big investment. Then the UPC. To get that you have to spend money. And remember, each individual product you sell -- say three fragrances -- has to have its own UPC. The cost begins to add up.

    But there are ways to sell your perfume without a UPC, and even without a box. If your perfume is good, and it looks nice just in its bottle, you may find one or more small local shops that will take it. Then it's up to YOU to make sure you're doing all you can to get people to BUY your fragrance in these stores.

    Look at it this way. Local stores will often agree to display a product by a local person. But to display it isn't the same as making sales. To make sales happen YOU have to DO something. This is the moment that decides whether you have the start of a business or whether to hang it up.  If you can't make sales locally, where people know you, don't expect larger stores somewhere else to be interested in your perfume.

    There are other ways to get started. I've written about many of them in  61 Ways To Sell Your Own Perfume! But if you seriously want to develop a business selling your own perfume, you simply must fight to make SALES -- to the public, not the stores -- and start by doing it on a small, affordable scale where you really do stand a chance to make money with a stripped down product (perfume bottled but not boxed or UPC's) and a very modest budget for your promotional campaign.

    If you can succeed at this, the sky's the limit.

   

   

Market Research: Does It Matter?

If you want to sell your own perfume you have to look at it as a business. If this is a new business for you, you have to do your homework before you invest. When someone buys a pizza parlour, a bowling alley, or a health club they look into the situation before they sign the papers. They consider the neighborhood, the customer base, whether the existing business is actively growing or declining, and whether the business is likely to produce enough revenue to cover expenses and still yield a profit.

Perfume is no different.

To make sales you need customers. Before you invest you need to assure yourself that you will have enough customers to make your project profitable. You do this by preparing a business plan and before you can develop a realistic business plan you need to conduct some market research.

The most important questions are, "Are there people who will buy my perfume?" and "How will I go about selling it to them?"

In short, you need to know who your customers will be and how you will make sales to them.

This cannot be vague. This cannot be wishful thinking. You have to have a realistic, practical, way to make sales or you cannot be in the perfume business.

Anyone can make a perfume to sell but not everyone can make sales.

What is your plan?

 When you first thought of launching a perfume, how did you plan to sell it? Did you plan to do the selling yourself or were you banking on turning sales over to some other organization (Walmart? Macy's?) that you thought would do the selling for you? If it's the second case, have you looked into the vendor requirements for these stores? These requirements are published on the stores' websites. Reading them will give you some sense of the steep climb you will have and the money and management skills that will be required to develop a relationship with a major chain.

More realistically, if you want to be in the perfume business, you'll find a way to make sales -- yourself -- by carving out some sort of niche for yourself.  (Read "61 Basic Strategies For Selling Your Own Perfume" for ideas.)

If you are approaching this business in a practical way, you'll be working to make a profit on a small scale initially rather than getting in way over your head and taking a colossal loss.

If starting small doesn't appeal to you, you might not be a good candidate for owning your own business.

Market Research For You

I've started a series of articles on market research on a scale anyone can undertake. This series appears on my other blog, "Learning To Make Perfume." It seems to apply to both making and marketing perfume as, if you're trying to make perfume to make money, you need to answer a few basic questions first. These answers can be fetched through some very simple, inexpensive, market research. They are essential.

Learning from the Leaders: Perfume, the t-shirt of today

 There was once a crop of t-shirts that bore the message "My parents went to [Acapulco, Cape Cod, Orlando, San Antonio, or wherever] and all they bought me was this t-shirt."

T-shirts became the classic tourist gift store item because (1) they were practical (if a bit overpriced) and (2) they established that you (or your parents!) had the money and the good taste to vacation in some desirable destination.

Bands got in the act. You "supported" your favorite band by wearing their t-shirt. Who, after spending a fortune to see Bieber or Minaj, would not spend a few bucks more to "support" them by buying and wearing a t-shirt that commemorated the event?

Unprinted t-shirts are cheap. Printing a message on a t-shirt is simple and inexpensive. So t-shirts became standard "band merch" sold by every Saturday night bar band at their gigs.

Then came perfume. In case you've missed this, marketers have gone beyond the generic "celebrity perfume" category and discovered that the real money -- the huge profits -- lie in "music perfume." Forget athletes, forget authors, forget designers -- focus on singers. Why? Because they are the ones who have the huge numbers of supportive fans -- fans who buy their expensive concert tickets, fans who buy their (overpriced?) t-shirts, fans who buy their ... perfume!

Justin Bieber -- he's a guy, right? -- makes $3 million in perfume sales to women in less than a month and goes on to sell $39 million worth of WOMEN'S perfume in just over a year -- toe to toe with Taylor Swift and her fragrance. The 2012 fall/Christmas selling season is going to see a LOT of dollars from music perfume.

How does this relate to you?

A singer or band doesn't have to be A-List to have their own t-shirts. Every serious band and singer has t-shirts to sell at gigs, along with their CD's. Word has it that some groups with no more than a local or regional following are making more off their t-shirts than they make from either performances or CD sales.

Now what about perfume?

If you are reading this it's likely that you are interested in marketing perfume -- your perfume. But it's also likely that if you look around your city OR SMALL TOWN you'll find at least a dozen singers and bands that have more supportive followers than you have. (Dare I ask, do you HAVE any following at all?)

If you don't believe what I'm saying, start hanging out and observe the action. Live groups are playing. Are t-shirts being sold? Is money changing hands? How often is each band getting gigs? How far do they travel to get bookings? Are they self-managed or do they have a manager? Or an agent? Do they have their own website? Could they sell perfume? How much perfume could they sell?

Now -- a question for you. How big do you want YOUR NAME to be on the perfume you sell? Are you willing to share SOME of that billboard space (your tiny label) with a singer or band? Would you -- if you could make more money by doing it -- give ALL the credit for the perfume to a singer or band?

HINT: The more the fragrance appears to "belong" to the singer or band, the more sales will be made, for you.

Issues remaining --

(1) Producing your music fragrance in the right quantity for the singer or band's "market" so you don't overproduce (and lose money on unsold bottles) or under produce (and lose potential sales)

(2) Being able to produce your fragrance in relatively small quantities at a low enough cost-per-bottle that will allow the fragrance to be sold at a reasonable cost to fans and still yield a generous profit for both you and the singer or band.

I've written repeatedly on these last two issues elsewhere, in eBooks and our Club newsletter so I won't repeat myself on these two points here.