How to Start a Fragrance Line

If your nose is in the know, you may be able to sniff out a new business by starting a fragrance line. The fragrance industry is a $25- to $30-billion-dollar-a-year market. Claim your fair share! Fragrance products include perfume, cologne, soaps, lotions and candles. The first step is preparing a business plan which includes a definition of your product, market niche, marketing strategies and profit and loss projections.


1. Narrow down your fragrance product. Offer a single scent in several different formats, such as cologne, body lotion and soaps, or offer just one type of product but in different scents.

2. Find your market niche. Everyone likes to smell good, but “everyone” isn’t your market. Determine who would buy your fragrance line. Scents with essential oils and natural bases appeal to those who value “going green.” Gen-X and Gen-Y customers may be more inclined to buy a celebrity-endorsed fragrance. For the most part, men don’t buy their own fragrances — but if they do, they choose one that their significant other likes. Scented candles have wide appeal and have the potential to sell to the gift market as well as the fragrance market.


3. Get the details out of the way. Choose a catchy name for your company and register with the appropriate state and city offices. Obtain the business licenses you’ll need. If you’re selling directly to consumers, you’ll need a sales tax license. Install business software that tracks sales and expenses and computes your profit and loss and balance sheet statements.

4. Select a market. Natural fragrances based on plant and flower essential oils may do well at arts and crafts shows and even farmer’s markets. Drug and big-box stores sell moderately priced fragrances such as Elizabeth Taylor’s “White Diamonds” and Coco Chanel’s “Mademoiselle,” which is the number one selling perfume in department stores, as of 2009. Where you sell the perfume determines its pricing and packaging.

5. Design packaging that coordinates well with your type of fragrance. If you’re charging $60 for a 1/2-ounce bottle of perfume, customers will expect luxurious packaging. The most expensive perfume in the world costs over $200,000 per bottle, mainly because the crystal container is encrusted with diamonds. More reasonably priced fragrances may only require an attractive bottle and label.

6. Line up vendors for packaging, bottles and the ingredients for your fragrances. Choose a vendor that has the best prices, but also sells in a quantity you can afford. Some perfume ingredients have shorter shelf lives than others and may develop an off-scent if kept too long. You also don’t want to tie up your cash in inventory that will take you months to sell.

7. Market your fragrances through advertising, press releases, demonstrations, samples and a website. Customers find going online a non-threatening way to find out about you and your fragrances.

8. Find wholesalers or distributors to sell your product to retail outlets. They’ll charge between 20 to 50 percent, which means if your projected retail price is $25 per 1-ounce bottle, then you’ll sell it to the wholesaler for $6.25. The wholesaler sells it to the retailer for $12.50. The retailer doubles the price and sells it in the store for $25.




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