"Advanced" merchandise acquisition strategies
Last week I wrote about what I call the "standard" methods of acquiring merchandise for a perfume store. But I also suggested that while you could get a business started using these methods, you would be unlikely to earn more than a minimal profit. Yes, even a minimal profit means you'll be able to pay your rent but if your thinking is like mine, you'll be looking for ways to make more. Today I want to explore with you some "advanced" merchandise acquisition strategies. Whether or not you find any particular one helpful, they should get you thinking of possibilities and looking around for opportunities.
In acquiring merchandise, the maxim is "buy cheap, sell dear." The importance of this cannot be overemphasized. The spread between what you pay for your merchandise and what you can sell it for is what gives your your profit. If that spread is small, unless you can achieve dramatic volume, your profit will be small. To achieve dramatic profits, you are going to need a very healthy spread on one or more popular products.
There are dealers in a number of fields that buy closeouts and overstocks. Many of my own bottles come from a closeout source (McKernan). Depending on the item and its marketability you might get it for pennies on the dollar. But closeout sources will have minimum order requirements that you might find scary. With bottles, I've bought closeouts because I know that what doesn't get used for one project in time will be used for another. And I've always had room to store those cases of bottles I'm setting aside for future use.
The problem with closeout sources is that they lack continuity. Once an item is gone, it's gone. No restocking. If you need more of something you got through a closeout you might have to go to the original source and pay full price, or you may not be able to find it at all. It could be discontinued.You can explore a number of closeout sources for perfume and scented products. Keep in mind you are not looking for discount sellers who sell by the (discounted) individual piece, but closeout lots, cases of merchandise. Keep in mind that because closeout dealers take advantage of specific purchasing opportunities, their inventory is constantly changing. What they have today might be gone tomorrow -- and they are hoping it will be gone! Again, be prepared to buy in bulk, getting perhaps a good deal more than you want at the moment. But, if the price is right... And you may be able to split an order with another shopkeeper.
Become your own closeout broker, sort of...
First time perfume marketers often fail. When they fail they fail with unsold perfume. Often their perfumes are quite good, developed and packaged by professionals, but the marketing didn't click. The marketer may not have the money or the will to go at it again. These ventures are too small to attract the attention of established closeout brokers but they can a ripe target for you. You will need some tact and negotiating skills but, if you can locate one or more of these failed ventures, there is a good chance you will be able to purchase some or all of their perfume that didn't sell. To find these situations, follow trade magazines and press releases. Look for perfume launches by new companies. Then, after a number of months, look to see if they are still in business. Many will not be and they might be happy to talk to you.
On a smaller scale there are creators of perfume who have produced what they cannot sell. They may be eager to sell their unsold inventory and, if a fragrance is good but selling skill is lacking, they might be willing to provide you with a continuous supply of their fragrance at close to cost – or, if motivated by ego, they might be willing to take a loss on every bottle you take from them, just so they can boast that their fragrance is a success.
Find one hot item and purchase it in bulk
If you start off with a good variety of merchandise, you may soon find one or two items selling better than the rest -- bringing in a significant share of your profit – but because you don't yet have a significant markup on these items they aren't yet doing anything dynamic for you. Here's where you have an opportunity.
Track down the best source for these items and find out what kind of a price you could get if you were buying them in bulk. Be prepared to put a big wad of cash into the selected item, knowing it might take a while to sell all of what you are buying but, as you sell it, you'll be getting your money back with juicier profits.
A friend with a small store competing against far larger stores adopted this strategy. He could sell the hot item for close to what big stores were charging because he had bought it in bulk. This brought customers to his store. When they came, they bought other items. His business flourished.
Have the hot item made for you
Sometimes you have the frustration of discovering you have a hot item but you can't find any source that, even in bulk, will give you a price that can make this item really profitable. Here's where – if you can deal with the complexities and risk the money – you can go to a manufacturer and have a similar product made exclusively for you. This can give you a very, very low price per unit which means a very, very good markup.
This strategy has two advantages. First, you already know from your sales reports that this item is going to sell really well. And you know you are getting it for less than what your competitors, who are buying through wholesalers, are paying for their version.
But there's another huge benefit. This product is now yours exclusively. A competitor could offer a similar product but, once you establish an image for your version, "similar" doesn't command the same price. Think of having a hot item you can sell for ten times what it cost you! Markups like this are what will make your business grow. In time you may be able to develop a number of products with markups like this. Then the profits from all your other products will be icing on the cake.
In my next article I will write about testing – a very important issue but difficult for a small retail business.
Steffen Arctander's Perfume and Flavor Materials of Natural Origin was first published in 1960 and is the classic, authoritative reference for natural products used in perfumes, scents, flavorings, foods, and medicine throughout the world. Part One defines and describes processing methods used to extract or refine the products into usable form; Part Two includes more than 500 monographs on the natural raw materials used to produce perfumes, flavorings, etc. Appendices include a classification of important materials by their scent, and worldwide production figures for major products. Fully indexed, the book also includes 62 pages of photographs, making this the standard reference work on natural materials for perfumers and flavor chemists. The preface contains practical descriptions of available materials, their origin, production and processing methods, appearance, odor and flavor type with brief notes on their main constituents, replacements and common adulterants.
Perfume is famous for the markup it can achieve, even for a middle market fragrance. While "everybody knows" that perfume costs next to nothing to make (not completely true) the making of it is often considered an esoteric secret. "Creating Your Own Perfume With A 1700 Percent Markup!" details how a 3-person company with no experience created their own fragrance in response to a marketing opportunity that was too good to pass up. The book explains exactly what was done to create a fragrance for that opportunity but it is far more than a history of the author's project. "Creating Your Own Perfume With A 1700 Percent Markup!" lays out every step in the process of creating your own perfume, either as a do-it-yourself project – and without the benefit of automated equipment some compromises and workarounds are required – or full bore professional production under your supervision. Either way you will be producing a quality fragrance at a remarkably low cost. Do you have a marketing opportunity that would be wildly profitable if only you could obtain your fragrance at a ridiculously low cost? "Creating Your Own Perfume With A 1700 Percent Markup!" is the guide you need to do it.
A really great name, a special name that is just right for a particular perfume or perfume marketer (or entrepreneur with money to invest!) can be worth a ton of money. But few individuals with great ideas ever manage to cash in on those brilliant ideas. Instead they wait while others "discover" their idea, acquire legal rights to it and make all the money while they are left out in the cold without a penny having been earned for what was once THEIR idea.
If you are struggling to name your perfume and are looking for a name that will have real value, "Naming Your Perfume And Protecting Your Name" will help you weed out low value names and point you to names that have better marketing value plus the potential to become valuable assets in themselves.
If you have a great name you want to protect but no fragrance, "Naming Your Perfume And Protecting Your Name" will guide you through the simple steps you must take to acquire a legal right to that name before someone else grabs it! Best of all, "Naming Your Perfume And Protecting Your Name" shows you how to gain strong legal protection for your name without a lawyer and without spending more than pocket change.
Never had an idea for a product name? Never thought much about perfume? "Naming Your Perfume And Protecting Your Name" may stimulate your interest in a whole new game that, when played well, can make you lots of money without your having to leave the comfort of your home office.
You can build a perfume business of your own using this business plan as a guide. By following its detailed strategy you learn to identify motivated groups of potential perfume buyers. Members of these groups are near the tipping point of desire for a new perfume. You don't know these people and they don't know you but you know a marketer they trust, one who does not currently sell perfume and might never think of selling perfume were it not for your approach. Here is where you step in with a professional plan, promotion, and perfume to take advantage of this ripe opportunity for mutual profit. Before your first promotion has peaked, you will already be developing a relationship with your next marketing partner. Following this plan, you will gain more and more profit with each new marketing partnership.
Now when you make your own perfume you can make it fully "commercial" meaning you will be creating a product ready for regular, continuous sales to friends, relatives, and the public! If the fragrance you've made has already won praise, why not share it with others? Some might pay you for it and want it for their web stores or retail boutiques! Creating your own perfume from dropper bottles: Methods, mechanics, and mathematics guides you through steps that can turn your hobby project into a perfume business. Discover how close you are now and how little more you must do to take what you made with essential oils and dropper bottles into a business of your own! For an introduction to this book, watch this video.
When you name a perfume you create a valuable asset – the name itself. To sell your perfume you want the most effective name possible. But a good name can have value beyond the edge it gives your sales. In naming your fragrance you are creating a trademark and a trademark can have value independent of the product. The value of that trademark can vary. Much depends on how well, in naming your perfume, you follow the trademark "rules." How To Create A More Valuable Name For Your Perfume first helps you develop a name that will be effective in selling your perfume. It then prods you to make use of certain techniques that can turn a good name into a great trademark, strong and valuable. If you have questions about how to protect a name, How To Create A More Valuable Name For Your Perfume will answer many such as:
- Can you protect your name yourself or do you need a lawyer?
- Can you register a trademark without a lawyer?
- What does it cost to register a trademark?
- How do I enforce the rights I have established?
How To Create A More Valuable Name For Your Perfume covers both state, federal, and international protection.
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