Monday, April 13, 2015

Last post to this blog

Greetings --

I'm consolidating my blogging and will no longer be posting on this site. You can continue to follow my latest thoughts on perfume at:


Thanks for your interest in this blog.

-- Phil

Friday, November 7, 2014

Marketing your own perfume in Nigeria

    Nigeria is a rich nation and a fashion center. That's fine for the large international brands. But what about the local entrepreneur who sees a market for modestly priced perfume among those who are not ready to spend it all for famous brands? Is there room for indie brands and entrepreneurs?

    While I suspect that local brands can and will emerge (and are perhaps emerging now), they will find materials and resources more difficult to obtain than would the casual U.S. perfumer.

    I have had several opportunities to examine the "problem" of a low cost, "made in the U.S.A" fragrance being exported to Nigeria. My latest chance was from a Nigerian entry to our "Marketer Most Likely To Sell The Most Perfume" contest.

    The "entry form" for this contest was a simple marketing plan demonstrating how you might sell a fragrance with your own brand name on it -- if you had a fragrance to sell. The prize was a "starter kit" of six bottles of perfume with the label reflecting the winner's brand. Once these were sold by the contest winner, additional bottles would be available to the winner at $10 per bottle as long as my own costs remained stable.

    The problem for Nigeria was the gap between what could be charged for a non-famous brand and the $10 per bottle cost from the U.S.A. Shipping costs and customs duties add another layer of prohibitive expense. Perfume, with its high alcohol content, is classified as a hazardous material and thus shipping restrictions apply. Many popular carriers will not accept perfume shipments for Nigeria, an additional problem. So the real squeeze for the Nigerian indie perfumer is getting quality materials into the country at a low enough cost so that the assembled product will still enjoy a comfortable margin.

    In the proposal submitted for our contest the marketing goal was to sell 200 bottles of perfume at 2,000 naira (NGN) each for gross sales of 400,000 naira. Selling and administrative expenses were calculated at 40,000 naira leaving 360,000 naira before the cost of the bottles.

    But assuming a $10 per bottle cost for the "made in the U.S.A" product, even deducting the six free bottles that would have been given to a contest winner, I calculated the cost of 194 bottles at about 329,200 naira.

    Now comes shipping, if you can find a carrier who will transport 200 bottles of perfume to Nigeria. If such a carrier can be found, it is reasonable to expect the cost will be no less than $200 US which would come to about 34,040 naira, wiping out all profit. And this is before customs duty has been assessed.

    For the Nigerian entrepreneur, what is the solution? Most likely the best approach would be to buy materials -- bottles, pumps, and fragrance compound or fragrance raw materials from a Chinese, Indian, or other Asian source -- and then assemble the product in Nigeria using a high quality but locally sourced perfume grade alcohol.

    All this would require a good deal of enterprise and risk as ultimately the brand and scent would have to be acceptable in the marketplace.

    But it does seem likely to me that at some point, someone is going to do it -- successfully.

    I welcome your comments.

Thursday, August 28, 2014

I sold a perfume name -- a trademark -- for cash

    Today I want to share information with you that I have yet to share with readers of "Perfume Strategies You Missed This Month" and have just now shared with Perfume Strategies subscribers. I want to talk to you about naming your perfume because that name alone can have value.

    This month, out of the blue, I received a cash offer for the name of one of my fragrances. In less than two weeks a deal had been struck and payment made -- for just a name.

    If you don't understand what this is about and why a name -- a name alone -- should have value, let me explain.

    When you name a fragrance and offer it for sale, that name becomes a trademark and, if no one has used it for a fragrance before you, you acquire legal rights to that name, even though you never registered the trademark.

    Now picture what happens when some other company wants to launch a perfume with that name. If they are a large company, and unless they are really clueless, they will ask their lawyers to "clear" that name -- to make sure it is not already registered or in use by someone else. If the name is already being used, regardless of whether the user is a large or small company, they have a problem.

    If the first user has registered the name and kept their registration active, the Trademark Office will deny registration to the newcomer, even if it is a marketing giant.

    But what happens if someone like myself is using the name without ever having registered it? If the lawyers come across my use, perhaps through a Google search, they know that I have rights to that name, even without a formal registration.

    Now the new marketer can (a) ignore the fact that I am using the name and risk getting sued, or (b) purchase the rights to the name from me, if I am willing to sell.

    In my case I was approached by a member of a law firm representing an unnamed client who wanted to acquire my rights to the name, and they were prepared to write a check immediately. While I have no way of knowing what was going on behind the scenes, I can sketch out two possible scenarios.

    One possibility was that the client company was running up a list of names for their lawyers to clear and the lawyers stumbled across my fragrance's name on the internet and, after discussions, decided that if they could acquire it from me for a modest sum, it would be worth the money.

    The other possibility is that the client company was already committed to bringing out their own fragrance with the same name and then -- after having made a considerable investment in graphics, packaging, and promotional materials -- their lawyers discovered my use of the same name and the potential for a costly, messy, trademark dispute. Perhaps to nip such a problem in the bud, the lawyers quickly approached me with an offer, hoping the problem could be laid to rest for a modest payment.

    I have no way of knowing how much the name might have been worth to the other people. But if I were to demand a large sum for the name, the other side might simple have said, "we don't need it that badly" and I would lost a chance to make a a bit of pocket change. After all, I was just selling the name, not the formula. In less than six months my same fragrance will be back on the market with a new name.

    So out of the blue I was offered money for a name. I sold the name and took the money. Now let's talk about you, your marketing plan, and how you might benefit if you are a winner in our contest.

    As mentioned, I was paid for a name alone because I had legal rights to that name. Those rights were acquired not when I came up with the name itself but when I slapped a label with that name on a bottle of fragrance and went out and began selling it.

    The rights to a name -- a trademark -- are acquired by using that name on a product "in commerce." That is, you gain a legal right and a potentially valuable property by using your name on a product you are selling.

    Now the prize for winners in our contest is a handful of bottles of a perfume I have made but with YOUR chosen name on them. If you give your fragrance a name that is not already in use, you will acquire a powerful right to that name when you begin to sell.

    You don't have to register the name. The fragrances in the bottle doesn't have to be your own brew. But your name should be original. You should be the first to use it for a fragrance.

    So how do you know whether your name is "original"? You can never be 100 percent sure but, for reasonable certainty, you can take two steps.

    First, you can do a Google search for the name, adding perhaps the words "fragrance," "perfume," "cologne" and such. If no fragrance pops up with a name even close to your name there's a good chance that you are in the clear.

    Then you can take it one step farther by going to the U.S. Patent and Trademark Office website and doing a (free) search of their TESS database. If nothing shows up even close to your name in Category 3 (perfumes and other stuff), once again it is likely that the name can be yours, if you go out and sell.

    So here you are with a contest that gives you a chance to get those bottles. All you need, to acquire a valuable property, is a good marketing plan (to be among the winners in this contest) and a good name for your perfume.

    For more on developing a marketing plan for our contest, study these two resources --

    (1) How To Write a Simple Marketing Plan (http://www.perfumestrategies.com/articles/psa-1003.shtml)

    (2) An Example Of A Simple Marketing Plan (http://www.perfumestrategies.com/articles/psa-1004.shtml)

    Your "entry form" for the contest is a simple marketing plan -- one that can really work! And remember, the name you give your fragrance can be valuable. The name alone.

    (If you are curious as to which name I sold, look at this website now. Then check back in December, 2014, to see which fragrance name is missing.)

Sunday, August 3, 2014

The novice marketing mistake that kills new perfumes

    Running out of money. It's a very common novice mistake. The novice is inclined to look at it as "bad luck" but really it is bad planning, bad execution, or both.

    This is not to say that, given a fixed amount of money for your project, success is guaranteed if you stick carefully to your plan. What it does mean is that a project that goes belly up prematurely -- money all gone while execution is incomplete -- is the result of bad planning and/or bad execution.

    You have limited money for your project. We all do. So your planning must take this into consideration. Your planning must set goals that are reachable with the resources at your command. Since your resources are (always!) limited, your goals must also be limited.

    Be aware that when a major fragrance marketer launches a new fragrance, they limit both production and distribution. I remember one Christmas in Texas trying to buy a bottle of the newly launched Sean John "Unforgivable" (which made use of Pomarose, new aroma molecule by Philip Kraft for Givaudan) but"Unforgivable" was out of stock.

    Estee Lauder, the marketer, was testing. Estee Lauder had, likewise, tested "Donald Trump The Fragrance." Neither fragrance was a hit but, because Estee Lauder was testing with, limited budgets for each project, neither produced much impact on Estee Lauder's bottom line.

    On a personal note, a company I was involved with had the thought that we could market a men's cologne successfully but we wanted to test first on a small scale. We bought a small quantity of a men's fragrance from a wholesaler and advertised it on a small scale using an approach that was our own.

    The bottles we used for out test cost us five times more per bottle than the bottles we created AFTER the test proved a success. But the bottles for the test only cost us a few hundred dollars so although we made less profit when selling them, our risk -- on the product end -- was negligible.

    The point of testing is to see what MIGHT happen. Then you can project, from your "numbers," what is LIKELY to happen if you scale up your promotion.

    When you set up your test you must KNOW, from the beginning, that you have the money you'll need to produce your fragrance, in a test quantity, and promote your fragrance, to a clearly defined, limited, market.

    Right now (Summer/Fall 2014) I'm running a contest for the "Marketer Most Likely To Sell The Most Perfume." The prize for winners is a starter supply of one of my own fragrances, but with their chosen name on it.

    From the point of view of the contestant, if he or she is a winner, they have a chance to DISCOVER whether they really can sell perfume. If someone is a winner they can execute their marketing plan -- using the bottles of fragrance I will have given them -- and then, if they can make sales, they can either continue with what they are getting from me OR they can create a fragrance of their of their own and sell it using the same marketing plan.

    This, for them, would be almost identical to the test strategy I used, with the exception -- and improvement -- that their fragrance will have their name on it whereas my test bottles carried the branding of some company long forgotten.

    So here's the lesson. Plan your perfume promotion around your financial capabilities. Before you spend a penny, make sure that you will have enough money to produce your perfume ON A LIMITED SCALE and market it with a LIMITED GOAL.

    If it flys, you'll get your money back with a small profit. You can then bootstrap that success by doing it on a slightly larger scale -- or, with "numbers" that prove your success, you might attract an investor and roll out your perfume on a larger scale.



   

Friday, July 18, 2014

Contest Update # 5

I've posted an article with suggestions for preparing your "entry form" (a simple business plan) for the "Marketer Most Likely To Sell The Most Perfume" contest. You can find the article here.

I have now posted an example of a simple marketing plan, in the style of an entry form, for the "Marketer Most Likely To Sell The Most Perfume" contest here. Take a look at it. It should make the requirements of the contest crystal clear.

Sunday, July 13, 2014

Contest Update # 4

Contest to find the "Marketer Most Likely To Sell The Most Perfume"
Contest Details         Register
Contest ends October 31, 2014


 Do you have a natural market?
 
    The fastest way to start making money selling perfume is to sell to your natural market -- if you have one. Not everybody does, and what to do about that is a topic for another day, but today let's consider what I call a "natural market."

    A natural market is a following you already have, a ready made market for your perfume. The most logical market is existing customers who have bought something from you, especially if they are looking to you for additional products.

    Now we are talking about you selling perfume, for the first time, so these existing customers are NOT people who have ever bought a fragrance from you. But perhaps you design clothing or jewelry. Perhaps you already have your own line of cosmetics which is not at all difficult to develop as many private label vendors can help you. (Perfume is a different story.) Fashion, jewelery, and cosmetics buyers are all naturals for "your" perfume if they are already enthusiastic about your brand.

    But with a bit of creativity in your presentation you can sell perfume or cologne to other types of customers if they are sold on your brand. Follow the new fragrance launches in trade magazines and you'll quickly notice that all sorts of product categories have spawned perfumes. Think of Hummer, the car, and then Hummer, the fragrance for the car. Nike, a shoe company, has its fragrances, Gap has theirs. A very wide range of consumer goods marketers have launched fragrances. The only real limitation is developing a creative link -- a hook to connect your existing customer franchise with your new perfume.

    If you are a musician with fans, giving live performances, why not sell fans "your signature fragrance?" Market it to them when your performance has them enchanted.

    And don't forget how stockbrokers and insurance salespeople make their first sales. Their trainers teach them to sell to friends and relatives to begin generating both commissions and leads. Then it's friends of friends, friends of relatives and so on, always asking for referrals from the people they just sold. Sure, it's a slow and difficult way to get going but you learn a lot from face to face selling. And when you've sold enough bottles to have gotten enough feedback and testimonials, you can begin to take your story to retailers.

    These are just a few possibilities you might explore.

    Don't forget -- you can learn a lot by participating on our "Marketer Most Likely To Sell The Most Perfume" contest. It costs nothing to participate. You have nothing to lose.


 


Wednesday, July 9, 2014

Contest Update #3

Contest to find the "Marketer Most Likely To Sell The Most Perfume"
Contest Details         Register
Contest ends October 31, 2014


How much perfume must you (think) you can sell to win?

    To be a winner in the "Marketer Most Likely To Sell The Most Perfume Contest" you have to demonstrate, through a simple marketing plan, a strong probability that you really can sell perfume, as per your marketing plan.

    But how much perfume do I expect you to be able to sell? The number is important for planning purposes as a strategy to sell a few dozen or a few hundred bottles of perfume will be quite a different than a strategy for the sale of tens of thousands.

    The number here is... a few dozen or possibly a few hundred -- possibly even a thousand or more bottles. But, in my original planning for this promotion, I was looking for someone that might be able to sell seventy six (76) bottles for $20 or more each.

    For me, after giving the marketer six bottles free and then having them sell seventy bottles -- which I would sell to them at $10 each -- I would come out with a small but comfortable profit. You could think of this as a small deal.

    But -- thinking bigger -- if a number of people went out and started selling one of my fragrances (each with their own name and artwork on it), my "small" deal would become a bigger deal. And if one out of ten marketers started to really make sales, all would to go nicely for both of us.

    I have seen too many people try to sell perfume with unrealistic plans and, in the process, spend money to produce more bottles of perfume than they would ever be able to sell. When a deal is successful it's easy to gear up production. But when you sell five hundred bottles, which could be very profitable for you, and have paid to produce 10,000 bottles, you now have a big loss where you should have reaped a profit.

    So the marketing plan I'm looking for in this contest is for a realistic program that really can sell those first seventy six bottles. And if you really can sell more, that's great. But my focus will be on your strategy for selling those first dozen, or hundred, or perhaps thousand bottles.

    You can see the bottles for yourself in this YouTube video.

    For contest updates, follow this blog -- or follow me on Twitter.

    Contest ends October 31, 2014.

    Contest details here.