Wednesday, February 27, 2013

Using A Computer To (Help) Design Your New Perfume

    I've been working with the new, Mac/Windows version of The Perfumer's Workbook. this is a computer program that both records formulas and assists in the design of new perfumes and the fine tuning of your existing formulas. This "fine tuning" can include adjusting your formula for balance, or complexity, or cost (by suggesting less expensive or more expensive aroma materials that will yield pretty much the same odor result.)

    I'm a strong believer in the nose as the ultimate tool for creating perfume. But here's the problem. A full-time, professional perfumer spends a lot of time smelling until he or she is intimately familiar with hundreds of aroma materials. It's like a doctor's ability to reel off the names of health conditions and  medications that the patient can't pronounce.

    So the full-time professional perfumer is a bit ahead of most of us in his or her knowledge of aroma materials. But this does not mean that others of us cannot have good noses -- we can. And it does not mean that the rest of us cannot produce some wonderfully beautiful perfumes -- we can. But when, as a part-time perfumer, you have a chance to get a leg up, to bridge part of the gap between your knowledge of aroma materials and the knowledge of full-time professionals, why pass it up? That's why I am such an enthusiastic endorser of The Perfumer's Workbook, created by (full-time) perfumer Steve Dowthwaite.

    Working now to explore the latest version of this software, which can be purchased for immediate download, I'm writing articles on the various features of this fragrance creation tool and posting them on my own website. I'm also posting a series of articles here, at this blog, which summarize some of the features of this software.

    This tool was created for both beginners and advanced amateurs and, even in this "student" version (the professional version is more complex ... and a good deal more expensive!) the software has been used on more than one occasion by industry professionals.

    These articles are an introduction. If you have an older computer you can explore this software by downloading an older (free) version from PerfumersWorld

Monday, February 25, 2013

Turn your favorite formula into a solid perfume

    Two issues got me started on solid perfume. First, I wanted to offer inexpensive samples of my regular fragrances. The alternatives were a small spray vial or a solid perfume.

    The spray vials I use for sampling are great but they're glass and can break when dropped. Additionally, the "fill" is about 2 ml so they generally get used up in a week or less if someone is experimenting with the fragrance.

    A solid perfume may cost a bit more to produce but even a small solid perfume can last for weeks, or even months. A dab provides a nice, long lasting fragrance. Each use consumes very little of the perfume.

    So, from a consumer's point of view, the solid perfume can be a better deal. More usage for the money. But there's another point in favor of the solid perfume and this resolves that second issue -- shipping.

    My glass spray samples are easy enough to ship but, being liquid inside of glass, they have to be wrapped with some care. And, from a public relations point of view, their small size is unimpressive when the package is opened.

    For the solid perfumes, you can just pop them into a padded bag and put them in the mail. The postage (here in the USA) is quite affordable. Even postage for an international order won't break the bank.

    For more about how I put my solid perfumes together, read Formulas and line extensions.

    But there's more to this plan. However you slice it, shipping is a significant cost for the buyer. But, as these solid perfumes are LIGHT, a buyer can sample a number of different fragrances in a single order without bumping up the shipping charge.

    On top of that, there are discounts, discounts for buying more than a single solid fragrance. And the way the shopping cart is set up, the customer can get the same discounts regardless of whether they are ordering more than one of the same fragrance or one of each of several different fragrances.

    I invite you to look over the strategies I've used as you might find them helpful in your own perfume business.

    My solid perfume sampler and the strategy described here can be found at my website.

Wednesday, February 20, 2013

(Permanent) Notebooks Are Essential

    If you are serious about making (serious) perfume, your first item of business is to set up a permanent notebook in which ALL of your formulas, ALL of your trials, will be recorded methodically.

    This fact of life was brought home to me vividly the other day when I started work on some solid perfumes I was developing for low cost samples of my regular fragrances. I wanted to use the original compounds without the alcohol having been added and discovered I was OUT OF STOCK on several compounds. I would have to make more. Fine. No problem. I'll go to my notebook and retrieve the formulas. Yes, I found (most) of what I was looking for, but it should have been easier.

    Before I go into my own record keeping, which now spans quite a number of years, let me review what is needed in those records when you come back to a formula after an absence.

    First of all, you need a list of the materials you've used in your formula. And you have to identify those materials VERY PRECISELY. This means the vendor's full name and item number for that material, and the date on which it was purchased. The point is that you want to be able to go back to that same vendor and order, by item number, that same item.

    Date can help you, especially when ordering a natural material such as an essential oil as these are subject to annual variations due to weather and soil conditions. Before you make use of a new order of a natural, use your nose to check it for variance from your original. And remember, natural materials tend to have a limited shelf life.

    Next, you need to record the QUANTITY used for each material in your formula. If you, like me, make your trials and formulas using dropper bottles, you know your accuracy will not be precise. Don't let this discourage you. What I do is develop a formula using dropper bottles, measuring out drops, half-drops (running a little material down the side of a toothpick), and tiny fractions of drops (by dipping a clear toothpick first into the aroma material and then swirling it around in my mixing pot).

    I work with drops because it's simple and my nose isn't well enough trained to spot the (small) differences in the batches that are mixed this way. Also, because it typically takes me many trials to come up with the winning formula, I would go broke using larger quantities of raw materials during the development stage, particularly when I'm using some costly natural materials.

    To go from "formula by drops" to production formula, it's necessary to convert these drops into grams. This requires a scale (an electronic balance that will read to two or three decimal places) and multiplying your "drops" formula by some number that will increase the volume of the compound you are producing to the point where you can have confidence that the gram measurements will be accurate.

    Typically I'll multiply my "drops" by five or ten and them, using the dropper bottles and scale, produce this slightly larger batch of the formula on the scale, recoding now the weight of each material added. When I'm finished I now have the formula converted to grams.

    For production I'll go one step farther. I'll convert the grams to percentages. The whole formula will be 100 percent and now, knowing what percentage each material will be, I can work backwards from the quantity (weight) I want to produce and write out the required weight of each of my materials.

    Finally, your notebook should clearly identify which of your trials is the FINISHED VERSION of your fragrance.

    When I am developing a fragrance I use codes for each trial. Usually these are based on pages from my notebook. Even when I think I'm finished, that I've found what I'm looking for, I may continue to test and so the SELECTED formula is not necessarily the last formula in the sequence of tests.

    So it's important to mark your selected version, the version of the formula that you are putting into production, with the NAME you have given the fragrance or some similar designation so you can accurately match the fragrance you are selling with its precise formula.

    Personally I keep a bound notebook for recording the many versions of my formulas as they are being developed. I have been known to abbreviate the names of raw materials, thinking the vendor and precise designation will be embedded in my brain forever. This can cause grief when, five years later, I'm only 85 percent sure that I've interpreted the name, item number, and source of the raw materials correctly.

    With time, the number of my notebooks has grown. At times I'm working here in the USA but in the summer I'll be in Canada and I drag along a lot of notebooks and sometimes, during the summer, write formulas in a new notebook which can be misplaced upon my return to the USA. So sometimes I have to hunt (too much!) for a formula that should be at my fingertips.

If you like digital

    Regardless of all these physical notebooks, which are often a quick way to enter trial after trial, when I get seriously near to my final result or when I reach my final result, I transfer my data to the computer using The Perfumer's Workbook, a neat piece of fragrance development software from PerfumersWorld. You can read more about it here.

    And those solid perfume samplers ... if you're interested, you'll find them among the products advertised here.


Monday, February 11, 2013

Market Research -- How Much Marketing Money Do You Need?

(This article continues a series started with "Conduct Some Market Research" )

How much will it cost you to sell your perfume? How much money will you need to make sales? Good questions.

On the one side you have many eyes in the sky perfume creators who believe their perfume is so great that word of mouth alone will make the necessary sales. No promotional money required.

On the other side you have the reality that it could be that no amount of money spent on advertising will sell a single bottle of your perfume. (The more you don't believe this, the more likely it will happen to you!)

We generally go into advertising with a budget. The budget falls into two parts -- the initial test and the rollout. The test is conducted on the smallest practical scale, to see what the odds of success will be. If you are careful, and if you test on the smallest practical scale possible (yet statistically significant, but this is another issue), if you get crunched in your first promotion, you'll still be financially alive and able to try again.

Unfortunately the first time out can be a time of learning lessons and if you put all your money into that first promotion, you'll have no money left to exploit the knowledge you have gained. It happens all too often.

One figure to be aware of is your profit potential on each bottle of perfume you're selling. Say the store (retail) price will be $40, the store pays you $20 (your wholesale price) and it costs you $7.50 to produce each bottle. Within these numbers you MUST be able to sell your perfume without spending more than $12.50 a bottle on promotion (and administrative overhead) and even at just $12.50 you will be left with zero profit.

In other words, if a store has 50 bottles of your fragrance, the MOST you can spend to promote the sale of those 50 bottles will be something short of $625. So if your local radio station offers to do a $1,000 campaign for you, that campaign had better sell 80 bottles of your perfume (and it might not)!) because if it doesn't, you are going to lose money. And if the ad fails to make the required sales the first time out, repeating it will only increase your loss.

In truth it's easier to create a perfume than it is to sell it. The more of a personal following you have, the more you pave the way for perfume sales. But to go out cold, with nothing but what you consider a good perfume, is a very tough, close to impossible proposition.

Build Demand!

The time to build demand is, of course, BEFORE you release your perfume. Then there can be some first day excitement, some first week sales. But how, you ask, do you build demand? This is a question you need to ask -- and answer -- before you begin to spend money creating a perfume.

Don't be naive. Look at all the perfumes on the market. You don't think they got there just because they were good perfumes -- and yours will be just as good (or even better!)?

But those perfumes got there because the marketer had a following -- either as an entertainer (Taylor Swift, Beyonce), or as a fashion designer (Ralph Lauren, Calvin Klein), or as a major cosmetics company (Estee Lauder, L'Oreal). And they fought to create their followings.

Perhaps your desire is simply to sell a good fragrance of your own. Fine. But what are you going to do to draw people to you to the point where they will march into a store and put down money for your perfume -- or spend money at your website?

Unless you have a cost effective plan to sell your perfume, the more money you pump into your project, the more money you will lose.

Friday, February 8, 2013

Market Research -- Your Cost Per Bottle

(This article is a continuation of the series started in "Conduct Some Market Research")

What will it cost you to produce the fragrance for which they will pay you the amount calculated in
Market Research -- #3 "What Price Will They Pay?"

If you're not aware of all that goes into producing a ttle of perfume, I urge you to (purchase) and study the "Perfume Developer's Checklist."  You might be amazed at the number of decisions to be made and options which exist, all of which influence your cost.

The real issue of cost is that of PROFIT. The point of being in the perfume business is to make money. (And yes, I admire those who create their own fragrances simply for the love of fragrance and for those people "costs" are simply an issue of whether or not they can afford the materials they want to use, with no expectation of ever getting the money back.) But as a business, you have to think profit. And your thinking will start with the proposed retail price for your fragrance. Then it goes like this.

Stores and others who agree to carry your perfume are likely to offer you from 40 to about 60 percent per bottle on your proposed retail price. Thus for your $50 retail bottle you can expect to get only $25 and perhaps a bit less, thanks to the retailer's policies in dealing with vendors.

That $25 now has to cover your costs of producing the ready-to-sell product, your budget for advertising and promoting your perfume, and miscellaneous administrative overhead connected with the project. What's left is your profit.

You now see that it is important to think clearly when producing your perfume. You cannot afford waste. You cannot afford many bells and whistles that routinely go with major brand offerings.

The smaller the quantity you are producing, the more cost savings you will need to achieve as your costs for each component will be considerably higher than what it might be if you were buying in larger quantities.

I've written about these issues in "Creating Your Own Perfume With A 1700 Percent Markup!" and still recommend it as a practical guide if you are planning to make any investment in perfume. What you can do on a $2,000 budget is far more limited than what you can do on a $50,000 budget. To make your perfume profitable you must "design" your perfume around components that are cost effective in your particular volume.

In general, if you expect to make money on your perfume you will probably want to pay no more than about $7.50 per bottle. $3.50 per bottle could give you a better fighting chance.

If you find yourself facing costs of $10 per bottle or more -- perhaps with someone telling you your perfume will sell for $100 or more which it probably will not -- beware!

And above all, where possible, test your marketing concept on a small scale before you get in over your head.

By the way. One cost saving technique -- used by very large marketers -- is to produce the individual elements that go into a perfume in larger, more cost effective quantities, but bottling smaller quantities as required.

Say you are getting your best price by ordering materials in quantities of 10,00. So you only bottle 2,000 bottles. In case sales don't meet your expectations, you have now saved 8,000 bottles worth of alcohol and water, production cost for assembly of those 8,000 bottles, and, while you may have to write off 8,000 unused boxes, your 8,000 bottles and sprays will still fetch something from a liquidator.

Thursday, February 7, 2013

Market Research -- #3 "What Price Will They Pay?"

(This is a continuation of a series of articles that started with "Conduct Some Market Research")

So now we're up to having established that you have developed enough of a following to market your perfume. Now the question is, "how much will your followers be willing to pay?"

New retailers have misconceptions about pricing and tend to think they need a formula to set their retail price. More sophisticated marketers conduct price tests to see what the market will bear and what price will be the most profitable for them. The goal in setting a price is to reap the greatest profit for your perfume. But finding that price may only come with many experiments and much fine tuning.

Your first step is to get a handle on what potential customers will be willing to pay. How do you determine this? Simply by looking at what they are paying for your competitors' fragrances.

This won't give you one single price. It will give you a range of prices. When deciding who your competitors are, it's important to select individuals or companies that are actually making sales. Not every fragrance out there is selling!

But suppose, after looking around at retail shops and Internet sellers, you determine that, for a 1.7 fluid ounce bottle of EDP, EDT or whatever, your competitors are changing from $35 to around $65.

This would be a pretty wide range but you'll also see that most of the fragrances you hope to compete with will be grouped around a single price, perhaps something in the $45 to $55 range.

Now it's up to you to do some strategic thinking. You have to ask yourself how your fragrance will fit into this market. Will your fragrance be better known than the others and therefore perhaps able to fetch a slightly higher price? Or, as an unknown, should you make your fragrance more affordable?

A lot depends on your knowledge of the people you are trying to sell to. The better you know them and their shopping habits, the better chance you have of selecting an acceptable (and profitable!) retail price.

When in doubt, go with the popular crowd. If it's your first time out, understand that you have a lot to learn. But storing up a knowledge base of real life experience in retailing your perfume can be exactly what you need to ultimately be a solid success.



Market Research -- What Evidence Do You Have That They Will Buy Your Perfume?

(This article continues thoughts from "Conduct Some Market Research")

At this point you've determined, in some way ("Market Research -- How Large A Following Do You Have?"), the approximate size of your "following" -- your market -- those people who, potentially, might buy perfume from you. But how many of them WILL buy perfume from you? How many of them buy perfume at all?

While we know the ansewr will not be 100 percent and we hope it will not be zero, lacking data we may tend to become overly hopeful.

What happens if only one percent, or three percent, of these people buy your prefume? Will it still be profitable? Or do you need 50 percent or more to buy from you? (Risky!) But how can you fairly judge how many will buy?

Here's where the more sophisticated -- and cautious -- marketers have the advantage. They will devise a relatively inexpensive TEST that will give them some feedback as to the propensity of this market to purchase their perfume.

Alternatively, a marketer -- you, perhaps -- might consider producing only a small amount of your perfume and trying to sell it in a small but focused segment of this market -- say three retail stores, somewhat geographically separated, each catering to a somewhat different consumer demographic.

Setting this up is not easy but the ultimate question is, are you doing a single hit and run promotion (to make gobs of money in a hurry) or are you thinking long range, in which case accurate marketing data will be an enormous help to you.

Without An Accurate Estimate Of Likely Sales ...

It costs money to produce perfume. True, many of the costs go down as your production rises. But if you produce fragrance you can't sell, you wipe out your profits.

So knowing HOW MUCH perfume to produce is important. Don't get carried away by what others are doing. Perhaps you can sell 50 bottles of perfume profitably -- if you only produce 50 to 100 bottles. But if you produce 10,000, you're going to get smashed.

This is where good data -- from market research -- helps to make your perfume promotion profitable.

Wednesday, February 6, 2013

Market Research -- How Large A Following Do You Have?

I ask this question a lot. When people tell me they want to launch their own perfume -- or, more boldly, their own perfume line.

If somebody isn't sure what I mean, I go on to ask, "Are you a singer?", "Are you a designer?" What do you do that you have achieved a following?

In most cases the inquirer is none of the above so my next question is, "How do you intend to SELL your perfume?" -- Embarrassed silence!

But this is important. Celebrities can have a multi-million dollar signature scent because they are celebrities. The definition of "celebrity" could be "someone with a large following." It is this large following that entices fragrance marketing companies (not the celebrities themselves!) to invest millions in a "signature scent" for the celebrity.

But are you a celebrity? Do you have followers?

OK, so you're not a celebrity. But you may have a following. People follow this blog. People visit my websites. I have a following and my web stats and visitor feedback can help me number that following.

Now what about you? Perhaps you or a friend have a retail store. Retail stores have traffic, and buyers. Could these be a following that would work for you?

Perhaps you have a blog, or followers on Twitter. Would they be interested in your perfume?

What? No Followers?

It's not the end but it points to a need for some more difficult market research. First you have to ask yourself, "where am I going to sell my perfume?" and this will probably lead you to making a list of retail stores or other venues that might take your perfume on some sort of terms, possibly on consignment. But now you have to hit the streets -- and the phones -- and talk to these people to see how realistic your expectations are. How many will let you sell your perfume in their stores? What do they think are the odds for your success?

Building A Following

If you are fortunate enough to find some stores that are willing to take your perfume, it's time to go to work. Remember, it's the stores that have the following, not you. So getting your perfume into stores may do little or nothing for actual sales. What you need to do is to develop some sort of promotional campaign to drive people into stores specifically to buy your perfume. While this falls under the "marketing " category, it's important for you to assess your marketing capabilities and try to get some realistic sense of how many people your marketing dollars -- your actual financial resources -- will be able to drive into stores.

Now, if you have been realistic, you have some idea of how large your following will be.

(This article is a continuation of a series that started with "Conduct Some Market Research.")

"Conduct Some Market Research"

From time to time I browse through websites purporting to teach readers how to make perfume -- usually in just 7 Steps and in well under 1,000 words. Pretty amazing.

But one piece of advice caught my eye the other day. The writer advised the potential perfume maker to "conduct some market research."

Marketers spending $30 million plus to launch a new fragrance could be expected to immerse themselves in market research before signing the deals that set all systems to "Go!" These marketers have the advantage of close releationships with advertising agencies that can either provide market research or direct the marketer to a reputable source.

But I'm guessing this involves expenditures of well over $100,000, possibly over $1 million. The reader of a (free) "How To Make Your Own Perfume" article will not be spending this kind of money. And, as to "conduct some market research," they wlil be left to their own devices, probably without a clue.

This is too bad as this pre-perfume making market research is likely to be the very element that determines whether your project will be a financial success or a financial drain. Why? Because before you start to spend money developing your perfume, there are some important questions which you need answers  -- and these answers will, or at least should, be found through intelligent market research.

Note that I said "intelligent," not expensive. In fact, you can do some very worthwhile -- intelligent -- market research on your own, spending no more than the cost of a few bottles of you perfume.

Five essential questions --

#1 How large a following do you have?

#2 What evidence do you have that they will buy a perfume (or cologne) at all and, in particular, from you?

#3 If there is evidence that they will buy a perfume from you, what will they be willing to pay?

#4 What will it cost you, per bottle, to produce the fragrance for which they will pay this amount?

#5 How much promotional money will be needed to sell a bottle of your perfume or cologne?

This is a bare bones outline for your market research. Let me catch my breath and I'll write more.