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When does it makes sense to invest in a perfume?
The knowledge of how to have your perfume produced at the lowest reasonable cost
(Part 5)

Go back: Promotion

You must acquire 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 more than is necessary to make your perfume or have it made for you, profitable sales become impossible. The people and companies that make money with perfume are the ones that have studied each element that goes into their perfume and have researched the prices being asked for each element – and, in some cases, found they could bargain down the price. Then scope out a strategy for buying what they need at the lowest practical cost – not always the lowest cost, as they will eliminate certain vendors they consider "high risk" due to fear over supply problems (they might not be able to deliver on time – or at all!) and quality problems (what they show you might not be what they intend or are capable of delivering.)

It is vital that you do the detective work necessary to find the best prices. Not infrequently will find a very decent price from a reliable vendor who is just a bit off the beaten track. Often the well promoted sources are not the ones likely to offer the prices you need. And, in negotiating prices, it does help to open your mouth and ask questions, the most important question being, "Might you have something equivalent at a lower price?" It never hurts to ask.

Beware of the easy way

There are suppliers who will do all the work for you, supply all the components, bottle "your" perfume and package it nicely. This will come at a cost – a cost which will make it that much harder for you to sell your perfume profitably. Each extra penny you spend to acquire your perfume is a penny lost when a bottle is sold. Beware of suppliers who tell you what your markup should be. In reality it should be a lot higher. The market for your perfume will have a fixed retail clost in the minds of buyers and retailers. Unless you have some absolutely amazing promotion that can make sales at an abnormally high retail price, your retail price will be limited by what stores and buyers expect.

Look before you leap

It is essential to determine what a bottle of your perfume will cost to produce – before you go ahead with your project. It is essential to be sure that the numbers "work," that when you produce your fragrance – and pay for it – you will have the margin you need to make a healthy profit. If the numbers don't add up, if your cost are going to be excessive, STOP! Go over your costs; go over your selected vendors. If you can't make the numbers work, your project is doomed. Get it right before you get started.

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Philip Goutell
Lightyears, Inc.