How to start a perfume business

Words First

When you have learned to mix fragrances excellently, the next thing you may consider is how to start a perfume business. However, creating your perfume line goes beyond just pleasant scents – there is so much more. Although you might make lovely perfumes, the perfume market is a multi-billion dollar industry. To thrive in the industry, you’ll need proper market analysis, marketing, and business planning.

In 2009, a New York Times article estimated annual perfume sales at $25billion to  $30billion. Forbes.com reported in 2010 that the top 10 best-selling celebrity perfumes sold $215million in the USA. Fast forward to 2018, the perfume market value was $31.4billion, with a growth rate of 3.9% between 2019-2025. These figures mean if you know how to make perfumes, then you have a huge business opportunity.

Creating perfumes is one thing, but starting a perfume line is another. You have the skills and ingredients for a top-tier fragrance, but you need the knowledge for the business. In this guide, we will be showing you how to start a perfume business. Also, we’ll discuss how to attain and maintain success in the industry.

Your perfume business plan and model should contain four elements. They are cost, distribution network and marketing, market size, and quality products. In this guide, we will be focusing on cost and product.

On-page Navigation

• Market Analysis
  1. Market Data
  2. Investment And Profit
• Perfume Customization
  1. Find A Supplier Or Manufacturer
  2. Production Cost
  3. Essential Steps For Perfume Customization
     • invent fragrance
     • perfume bottle
     • caps and sprayers
     • perfume package
  4. Quality Inspection
  5. Delivery
  6. After-Sale Service

Market Analysis

When you want to take a test, you must make time to study. The same goes for business; you need to understand the nature of the company you’re starting. Before you can master how to create a perfume line, you must understand the business. Doing this gives your business the required flexibility and resilience.

So, when you’re brainstorming how to start that perfume business, do your market research. You cannot undermine the importance of solid market research and rich industry knowledge. Whether you are creating a perfume line out of passion or for profit, you need to understand the market.

Here are some of the benefits of market research:

1. You see more opportunities in your chosen line of business.
2. Every business has risks. However, proper market research helps reduce risks to the barest minimum.
3. You have the perfect idea of who your customers are and where to find them. That way, you save advertisement costs.
4. When starting a perfume business, market research helps you see what your competitors are doing. That way, you follow their right decisions and make changes where necessary.
5. You make quicker sales; that’s because you’ll be doing almost everything right.

A good example is a perfume online market research. An accurate market research report improves your understanding of the market, consumers, and products.

Mostly, when people think of the perfume industry, they naturally classify it as a luxurious industry. Majorly, that’s because of the fashionable, expensive, and shiny high-end perfume brands they see around. They’re not entirely right, and they aren’t wrong.

industry knowledge is an essential part of market analysis.

Honestly, understanding perfume lines can be tricky, especially when you’re starting the perfume business. Before you get into the perfume business, please master some basic knowledge about perfume.

Basic Knowledge(If they aren’t useful, please skip them):

1. perfume history
2. perfume types
3. perfume notes
4. fragrance family
5. natural fragrance & synthetic fragrance
6. bottle decoration techniques
7. ……..

All of the above are some of the basic knowledge of perfumes you must know. After this, you can learn how to start a perfume business more properly.

How to do market research by yourself

If you are in a strong company, have sufficient funds, and you need a very detailed and comprehensive market data and analysis reports, then I suggest you buy a professional market research report.

These reports will analyze the perfume market in different regions and predict future development trends. Usually, these reports are very expensive, varying between 600-7000 US dollars.

But if your customers are all from the local area, or you are just starting the perfume business, expensive reports are not suitable for you, because it focuses on macro analysis and lacks micro research, and its practicality is very low.

I have two suggestions:

1. Use google trends to discover niche markets and understand your target audience.
2. Observe your customers through the details of life. Any business starts with a subtle discovery. This is not a simple job, but it is not as difficult as building a rocket.

We will elaborate on market research methods in another article.

Investment And Profit

No-one, but you know how much you can afford for the business. You must carefully calculate how much you can invest in different spheres of the company. From creating perfumes to branding and distribution, you’ll incur costs.

For example, if your company has the considerable financial strength, extensive distribution network, and reliable marketing capabilities, we advise you to consider high-end perfumes. That is because the profit margins of high-end perfumes are incredible. However, if you’re just starting with a budget, it’s best if you start with good short-term fragrances. With reasonable prices, you get customers who give essential cash flow to the company.

You should measure all of these based on your incurred costs and potential profits. In a situation where you own a big supermarket, selling cologne is the best option. That is because of its lovely smell, low price, and potential consumers. If you’re a female influencer, you can calculate the income and preference of your fans. That way, you know the scents they love and can afford. We recommend Eau de Toilette for such cases.

Here at OS Fragrance, we tailor different perfume products and solutions for various customers. You can start your perfume line from a variety of solutions.

I will put the content of investment costs in the next chapter, let’s talk about the profit of the perfume business first.

We are quite sure that the profit margin of perfume is very high, usually above 60%. The profit margin of high-end perfume is even higher, above 80%.

But, the manufacturing cost of a piece of perfume only accounts for 0.5% to 3% of the selling price.

For high-end perfumes, marketing costs account for more than 10-20% of the selling price. The research and development costs of perfume formulas, and the design and research costs of perfume containers and packaging account for about 3-8% of their selling prices.

This formula isn’t suitable for all perfume companies, you have to figure out the formula based on your own situation.

If you have your own distribution channels or marketing skills, then perfume is considered a very profitable business.

And you only need to be responsible for sales, we will stand behind you and provide you with product solutions.

Perfume Customization:

Here are some of the factors you must consider when starting a perfume business.

Find A Supplier Or Manufacturer

A supplier is an enterprise that provides you with the products and instruments for the business. To start with, you’ll need a reliable and experienced supplier with the necessary qualifications.

We strongly advise that you visit the enterprise for the following reasons:

1. You get to know the location of the company.
2. You meet with the director of the company in person.
3. There is an opportunity for you to make business proposals, contract clauses, and agreements.
4. You have the opportunity to inspect the production lines.
5. Learn more about the product and industry that you involved in.

Meeting with the supplier assures you an ideal result in the end instead of wasting resources. So, getting a supplier comes first, get to know the company in all directions, at least check their certification of company and products.

Production Cost

While you’re inquiring how to start a perfume business, please ask about costs. You should have a well-detailed budget before you start it. That will guide you in dividing available funds efficiently.

As a company with a great deal of experience, we have substantial manufacturing advantages. Our prices are affordable, and our customer service is top-notch.

Mostly, the minimum order quantity for glass bottles is 10,000 pieces. As a result, the minimum order quantity as a perfume supplier is 10,000 pieces. This is due to production costs and processes.

However, there’s some good news – we offer flexibility. We can provide a minimum order quantity of 5000 pieces for potential long-term customers. And, yes, we will bear the production cost of the other 5000 pieces.

Comparison of product solutions from three perfume suppliers

• OS Fragrance: For us, the total production cost lies between $10,000 – $20,000. You can get up to 10,000 pieces of perfume. Furthermore, you get accurate and complete custom service(that’s meaning you can custom the fragrance, get a new design package, new bottle, and so on)

• Alphaaromatics: On the other hand, the total production cost of the alphaaromatics is $8,000. You have the opportunity of purchasing 200 pieces of perfume. But, there isn’t a complete custom service.

• PriveLabel: In the case of PriveLabel, the total cost of production lies between $7,500 – $12,500. For this brand, you can get 500 pieces of perfume. However, you don’t get complete custom service.

Essential Steps for Perfume Customization

Now, let’s discuss how to create and customize your own perfume.

The high- quality products are the chief ingredient for success in the perfume industry. Essentially, perfume consists of three parts:

1. Fragrance: The fragrance is why you bought the perfume in the first place. That’s the content.
2. The bottle: This is the container where the fragrance stays. Usually, glass and comes with a cap and sprayer.
3. Packaging: The package is what makes your perfume stand out from the others. It’s the outward representation.

You can’t just create perfumes and put them just anywhere; there is a process. Let’s discuss the step by step guide on each part.

Invent Fragrance

From inception, the pleasing scent of the perfume is what catches the attention and interest of consumers. When we say smell in the perfume world, we mean the formula(soul of the fragrance).

Globally, perfumer and fragrance labs provide a variety of perfume formulations to the market. They use their talents and advanced equipment to do this successfully. Likewise, they make different perfume formulas for target consumer groups, because each one of these consumer groups has their preferences.

If you need help with it, do well to check our perfume market research. Indeed, it’ll give you mixing ideas. Once you have an idea of the fragrance you want, you ease the process. The methods for fragrance inventions are:

Fragrance Duplication Service

The fragrance duplication service seems like you’re copying. But, it’s simply getting inspired by a perfume to create your own’s. The question that should come to your head is, “how do I do that?” Here is the process below:

• Identify your target consumers.
• Set out the scent requirements that suit your audience.
• Get competitive perfumes from the market.
• Using those perfumes as a base, adjust each scent to your requirements.

If you want to start the perfume business fast, we recommend this method. Using this style for perfume creation saves you a lot of stress and energy. Some of the benefits include:

• You save research and development costs.
• You save time and the costs of time.
• You save a lot of energy.
• Your target consumers more effectively.

but,it’s possible not to have an idea of the scent you require. In this case, you need to have a comprehensive communication with your supplier.

Fragrance Creation 

Doing this will help convey your ideas clearly and avoid unnecessary errors. Some of the things you should discuss are:

• Occasion of perfume
• Age and gender of target customers
• Expected production cost per perfume,
• Perfume type, fragrance family
• The time length of the perfume aroma
• The target sales price
• ……..

If you’re thinking of getting involved in the perfume business, we can help out. To do this effectively, we will need a lot of data and information. Because the more detailed the data, the closer we are to your target fragrance.

What we do at OS Fragrance is to provide you with a variety of fragrance schemes. We get these schemes through long-term follow-up and market observation. We also analyze the different preferences, ages, and groups of consumers. Please check the fragrance creation form and contact us if you’re wandering.

Perfume Bottle

The perfume bottle comes after you’ve established your desired fragrance. Once the fragrance satisfies your requirements for your target consumers, you need a suitable perfume bottle. Generally, there are two materials widely used to bottle perfumes. They are;

• Glass bottles
• Polyethylene(PE) bottles

Glass bottles multiple times the cost of PE bottles. But, the texture and aesthetics of glass bottles are more prevalent in the market. However, this isn’t an outright fact. For example, the body mist of the Victoria Secret’s collection uses the PE bottle.

The dynamism of the perfume industry has direct effects on the manufacture of perfume bottles. At OS Fragrance, we provide you with a variety of perfume bottles to consider. Either glass texture or polyethylene, decide what you desire. That way, you’ll be saving a lot of extra costs.

Earlier, when we discussed how to start a perfume business, we highlighted branding. Therefore, we expect you to want a unique bottle. With our advanced technology and industry chain, we can meet your needs. Here’s how we’ll meet your needs;

• Click on this page (custom perfume bottle). You’ll see the technological development of different bottles.
• Choose your preferred bottle, or set an ideal bottle in your mind.
• We’ll help with a sketch design, 3D design, and printing.
• We’ll walk and work with you throughout the process.

Usually, a new perfume bottle takes about 30-40 days. This period caters for;

• Concept
• Design
• Proofing
• Mold opening

The influential factor in this timeframe is the processing difficulty caused by the bottle structure. Among the production process, molding is the most expensive -, about 1500~2000 US dollars.

Caps And Sprayers

Usually, you should conceive the design of the cap and sprayers with the bottle. When creating and designing the perfume bottle, consider caps and sprayers.

Mostly, the materials used to build sprayers are aluminum and polypropylene. And, usually, they use metallization. You can customize requirements on the shape, material, and spray decoration.

On the other hand, you can make caps from several materials. They are;

• Polypropylene
• Polyethylene
• Wood
• Leather
• Metal

You can also combine several materials to form the cap. You can diversify the shape and get more creative and imaginative with the design.

For example, Let’s assume you want to start a perfume business in high-end perfumes. We’ll advise your caps should consist of several materials because they’re more popular. Likewise, manufacturing wood and leather is more expensive than polypropylene and polyethylene.

A new cap takes between 20-40 days of production. This period caters for;

• Concept
• Design
• Proofing
• Mold opening

When designing sprayers, focus on practicality and functionality. While for caps, you should focus on appearance and decoration. There are lots of solutions for caps, so the cost is variable.

At this point, you are nearly set to begin a business and put perfume up for sale.

Perfume Package

The third part is understanding packaging. Convincing a customer to buy your perfume begins from the mind. And, you can successfully persuade potential consumers through packaging.  Therefore, the design concept and aesthetics of the packaging box must be top-notch. At least it should be better than your competitors.

Majorly, cardboard, and corrugated paper are the materials used to make packaging boxes. Cardboards are more costly but have better quality. Consumers tend to pay higher for beauty – therefore, a beautifully packaged perfume has a higher price. However, the package box also protects the perfume from damage.

At OS Fragrance, we use single-color or multi-color printing to decorate the packaging box. Likewise, we employ gravure printing, screen printing, offset printing, flexo printing, and other printing technologies to achieve the packaging box’s ideal pattern.

It takes about 20-25 days to complete the production of a package box. If you need more info, please click this link custom perfume box.

Quality Inspection

If this is your first contact with a B2B business, then you need to pay attention to the quality inspection and delivery.

Quality inspection is very vital to your perfume business. To ensure the quality of final products, the perfume manufacturers generally have two departments to ensure the perfume quality:

• Quality assurance: Quality assurance is avoiding product mistakes that can cause problems when delivering products to customers.
• Quality control: Quality control reviews all production factors, ensuring they follow the rules and customer requirements.

Checking your production process can be a bit complicated. If this is the case, you can employ a third-party inspector. However, you must hire professionals to get satisfactory results, although it costs money.

Delivery

If you contact us when you are interested in the perfume business, we’ll send you samples within seven (7) days. We use FedEx, DHL, and commercial express to send samples to our customers. When you receive the models, we expect your suggestions as feedback.

We also offer Free on Board (FoB) services to our customers. Dependent on our agreement, FoB can be either origin or destination.  FoB origin means we’re responsible for the goods until complete documentation from the carrier. FoB destination means we take responsibility until the good reaches its destination.

After creating your perfume line, we advise you to use sea transportation for final products.  Depending on the destination, it takes about 15-25 days. However, it’s only a suggestion that doesn’t limit you. You can also use aircraft or trains to ship your goods.

After-Sale Service

It is very important to find a trustworthy supplier. Some irresponsible suppliers often abandon their clients for profit, such as not providing after-sales service, when the product has quality problems.

You should ask the supplier whether to provide after-sales service at the beginning and ensure that the manufacturer produces in accordance with the contract requirements.

OS Fragrance serves hundreds of clients. Some of these clients have been with us for more than 10 years since the beginning of our establishment. This is not only because we trust each other, but more importantly, we provide services that satisfy customers.

We provide 2 years of after-sales service.

Sum Up

For a product generally known as Hungary water in 1370, perfume has defiled all odds. The industry is now a continually growing multi-billion dollar market. If you know how to start a perfume business, opportunities lie in this industry. We have summarised this guide as follows:

• The perfume business opportunity is highly profitable
• The market value of the perfume industry has been increasing for a decade
• You need proper market research and analysis.
• There are five steps to creating your own perfume line.
• They are fragrance invention, bottle production, cap and sprays manufacturing, and quality inspection.

Today, we talk about the perfume market, customization, and cost. But for a business, you still have a lot of work to do, such as marketing, expanding sales network, brand building, etc. Please let us be your reliable perfume supplier and share these tasks for you.

Contact OS Fragrance