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Sweet Smell of Success

Nov 1, 2008

Fragrances and scented products, such as oils and incense, carry some of the highest profit margins of any product categories. Furthermore, they can be merchandised in a small space, giving stores a high return from as little as two square feet or less.

In many cases, suppliers of these products require low minimums, making it easy for retailers of all kinds of merchandise to add scents and fragrances at minimal investment. The holiday season is an ideal time to add these products to the mix, and with consumers now watching their wallets, scents and fragrances may be more important than ever.

In this season of home entertainment, scents warm the home. Incense sticks and cones and fragrance oils also make great stocking stuffers, at costs consumers can easily afford. The same is true of decorative lamps, bottles and burners packaged individually and priced right for under the tree.

Brand name fragrances and colognes are as popular as ever. This is true of the original designer units and the look alikes, or designer types, as they are called, which are patterned after designer brands. Authentic or pretender, both are time honored holiday gifts for women and also increasingly for men.

To help retailers jump start sales of fragrances, Heavenly Body Products is having an end of year clearance to make way for new products. "It's an opportunity for retailers and wholesalers to buy designer type oils by the gallon, package and label them and make unprecedented markups," says Sir Markadoo, owner of the company based in Decatur, GA.

Heavenly Body carries 230 different designer type fragrances, including those patterned after such top selling names as Eternity, Joop, Escape and Versace. Buyers of two pounds of the same fragrance can obtain them from Heavenly Body Products for as little as $20 per pound, and up to $25 per 16 ounces, depending on the design.

Customers buying a full gallon (eight pounds of one fragrance) pay between $17 and $24 a pound, depending on the fragrance. While supplies last, Heavenly Body is selling a 25 pound drum for as low as $15 per pound, and as high as $19 per pound.

The retailers do their own bottling and labeling, and Heavenly Body Products has a special November and December offer for roll-on bottles. There are 864 one third ounce roll-on bottles in a case, and the company is wholesaling them for $150 a case. Buyers who order 20 cases or more get them for $125 a case.

"The estimated retail price of designer type fragrance oil in a roll-on is between $5 and $10," Sir Markadoo says. "That's a mark up of more than 400 percent," he notes.

Also on clearance is pink body cream, which the company is selling at $10 per gallon, or $35 for a five gallon pail while supplies last. Sir Markadoo is offering lotion bottles at $50 for 100, or 50 cents each. "You can get 70 eight ounce lotion bottles from a five gallon pail," he says, "which brings the cost to under $2 a unit at a suggested retail price of $10."

A special deal is also offered on Heavenly Body Products' air freshener, which comes in a choice of 40 different fragrances and can also be used as a burning oil. This is being offered at $70 a gallon. Or buyers can obtain two pounds each of five different fragrances at $10 a pound. Among the best selling fragrances, according to Sir Markadoo, are cherry, sugar cookies, green tea, chocolate and lemon grass and ginger.

One ounce spray bottles are offered at $45 for 100. The retail price would be a suggested $5.

To make the most of fragrance sales, Sir Markadoo suggests that retailers ask customers for their opinion of a fragrance. "People like to be asked for their opinion," he says. "Then put a dab or a spray of fragrance on the back of your business card and give it to the customer. It goes in her purse and is a reminder of the fragrance and the store."

Sir Markadoo also urges retailers to go wholesale, thereby increasing their overall volume and total profit potential. He will provide brief training by phone on how this can be accomplished, along with a breakdown of the profit potential. Every Tuesday, he hosts a business show at 9 p.m. EST that can be accessed via www.sirmediagroup.com.

Another supplier of fragrance oils, Abdalla Imports in Beaverton, OR, also specializes in a broad assortment of decorative burners and lamps. Chief among them and especially suited to the holiday season is a series of hand blown Egyptian perfume bottles.

"There are roughly five different sizes and shapes," says Hesham Abdalla, owner and president, who also notes, "because they are hand blown, no two are exactly alike." Each is individually packaged in a gift box.

One is in the shape of Aladdin's lamp, and it, like the others, "Is very popular with collectors," Abdalla says. That unit wholesales for $5.25; others wholesale for as little as $1.20. Abdalla says the suggested retail prices are, "at least four to five times the wholesale cost." He also reports that some of his retailer customers fill the bottles with oil, which gives them, "a unique product with higher profit potential."

The minimum order is just $50, and can include a mix of the Abdalla Imports' products. Other specialties include wooden coffin incense burners that wholesale for $3.25 and a series of soapstone aroma lamps in a variety of sizes and shapes.

To fill the burners or sell separately, Abdalla offers 34 different scents of fragrance oils in half ounce bottles that wholesale for $1.45. Among the most popular fragrances, according to Abdalla, are butt naked, dragon's blood, eucalyptus and French vanilla.

Patchouli is the number one best selling incense fragrance, according to Linda Simon, owner of Matt's Incense in Brunnell, FL. "That has been number one since the 1960s," she says. Her company carries more than 200 fragrances in both incense sticks and cones and in oils. Other currently popular fragrances, according to Simon, are China rain, black cherry, cinnamon, summer rain, strawberries, vanilla, butt naked and sex on the beach.

Many Starter Packs
Matt's Incense is one of several suppliers that offer starter packs that help retailers add incense and/or fragrance oils for a small investment. Matt's Incense showcases a slew of such starter kits on its website, where the contents and costs of each are described in full.

One of the smallest, according to Simon, wholesales for just $135. Called the body oil kit, it contains 60 bottles of fragrance oil in a free display unit. "The suggested retail price is $9.95 a bottle," Simon says, "which gives the retailer a return of $597."

A deluxe incense display from the same company is just 24 inches wide, 12 inches deep and 24 inches high. It wholesales for $200 and contains 50 incense bundles of 100 sticks, 48 assorted wood ash catchers, six storage box burners, six coffin box burners, six larger ash catchers, six solid brass ash catchers and 800 reclosable bags. "The kit represents a complete incense department in two square feet," Simon notes.

Jainsons International Inc. in Denver also offers a broad range of starter kits, all of which are featured on the company website. The company has a total of 114 different scents in fragrance oils and approximately 110 scents of incense in 11 and 19 inch sticks, and one and two inch cones, according to Rama Jain, a company principal.

The incense is offered in colored and brown forms. "The colored form provides super fragrance," Jain says, "which is about double the strength of brown." Among the most popular fragrances, according to Jain, are cool water, China rain, black powder, apple pie and baby powder.

One starter pack from Jainsons wholesales for $65. It is a wooden display containing 20 bundles of 100 sticks each of the premium colored sticks, two dozen inlaid boat burners and 200 reclosable bags for selling the sticks. Jain says sticks typically retail at 26 sticks for $1. "In this program, the boat burners wholesale for 23 cents and generally retail for $1," she adds.

A fragrance oil starter kit from Jainsons wholesales for $75. It contains 60 bottles of oil, and Jain says the retailer can select the fragrances. They retail for approximately $5, she says.

Also in this kit are 10 brass rings for placing on light bulbs so the fragrance will warm and waft throughout the room. They have a suggested retail price of just 99 cents, making them an easy add on to the fragrance oil sale. The kit also includes two ceramic oil burners that retail for approximately $7 each.

Jainsons also supplies candles in a choice of 26 scents. They come in votives, melters, 14 and 22 ounce jars and in three sizes of pillars: two by six inch, three by six inch and three by three inch.

Lamps Make a Comeback
"Lampe Berger," an oil burner that dates back centuries and reemerged recently as a trend in France, has come to the U.S., reports Simon of Matt's Incense. The French versions are pricey, but her company supplies a less expensive version.

"It is a catalytic oil burner, which is an ionizing lamp that produces no smoke or flame," she explains. Versions available from Matt's Incense wholesale for between $20 and $30, depending on style, and have a suggested retail price of approximately $60.

"They require a special fuel, and we are in the forefront of manufacturing that fuel," says Simon. "We now offer it in eight different fragrances and we are growing the line. It is the latest trend in fragrances," she adds.

ETS Design in Norcross, GA has latched onto the lamp trend with 50 different styles of an aroma oil burner. "It's like a candle without an open flame," explains Susan Liu, the company's president, vice president and manager. "It comes with a dimmer switch, and it can be adjusted to vaporize."

Among the styles are a lighthouse, hummingbird and praying hands, which Liu says is the most popular unit now. The wholesale price ranges from $3 to $8, depending on style, and the suggested retail price begins at about $19, she says, and reaches to about $24.

"We're working on a displayer that showcases the product," she says. Without filling its top dish with oil, she says retailers can and should display it. "The light itself draws attention," she reasons, adding, "people use it as a night light."

ETS Design carries 30 different fragrance oil scents. The most popular, according to Liu, are lavender, jasmine, honeysuckle and cinnamon.

ETS also offers scented crystal rocks, which Liu describes as, "pure ionic crystals from the Caribbean Sea. We color them and infuse them with oils. The fragrance is as strong as candles, but it is safe for the environment," she adds.

These crystal rocks are offered in jars. An eight ounce jar wholesales for $3, and the suggested retail price ranges from $6 to $10. To make the most of the fragrance business, Liu encourages retailers to group a variety of scent and fragrance products in a display. "Coupling a variety of products gives consumers a choice of type and price," she reasons.

Top of the Line
When it comes to perfume and cologne, name brands from long time affordables, such as Old Spice and English Leather, to the rarified, such as Gucci and other designer and celebrity brands, sell best. Fragrancex.com Inc., based in Long Island City, carries 5,500 different stock keeping units, "all brand name fragrances; no knock offs," says Ron Yakuel, owner.

"We cover the gamut of brands from the high end to the low end, and as long as a buyer is a verified preseller, we don't require a minimum order. A retailer can start with a handful of bottles," Yakuel says. "The smallest, most inexpensive sizes work best," he adds, "not just because they have a quicker sell through, but also because there is more profit margin on the smallest available sizes."

Different brands naturally sell well in different markets and types of stores. "We will help a retailer put together a mix of top sellers for particular types of stores and markets," he says.

In general, "the older, tried and true brands, such as Stetson and English Leather, are consistent best sellers. The men's fragrance business is growing a lot," he says. "The celebrity stuff, Britney Spears and Paris Hilton, do very well with women consumers. Those two celebrity personalities' fragrances are still very much in demand," he adds.

"The wholesale prices vary dramatically depending on the brand," he notes. He estimates that, "on average, there is at least a 30 percent margin."

Frgrancex.com also sells samples, which are popular with consumers. "We offer some sample sizes for as little as 20 cents a unit." Retailers can register for free at the company's website. Yakuel's staff then verifies that a registrant is a reseller. Once approved, the retailer gets access to the wholesale prices on all items.

"Signage, touting the brands, always helps retail sales," says Yakuel. "The bottles are boxed, and the bottles themselves are often very recognizable and should be prominently displayed."

The fragrance market, top to bottom, is holding up very well, according to Jain. "It's high profit, so retailers like it. And consumers love to smell good," she adds.

The following people at these companies were interviewed for this article:

Hesham Abdalla, president and owner
Abdalla Imports
4101 Northwest Chaparral Terrace
Beaverton, OR 97006
Tel: 541-908-2223
Website: www.abdallaimport.com

Susan Liu, president, vice president and manager
ETS Design
1010 B Norcross Industrial Court
Norcross, GA 30071
Tel.: 770-582-6688
Toll Free Fax: 866-673-3296
Website: www.etsdesign.com

Ron Yakuel, owner
Fragrancex.com Inc.
48-10 37th Street
Long Island City, NY 11101
Toll Free: 888-557-3738
Tel.: 718-482-6970
Fax: 718-482-6964
Website: www.fragrancex.com/

Sir Markadoo, owner
Heavenly Body Products
2571 Park Central Boulevard
Decatur, GA 30035
Tel.: 404-286-6700
Website: www.heavenlybodyproducts.com

Rama Jain, manager
Jainsons International Inc.
3505 East 39th Avenue
Denver, CO 80205
Toll Free: 888-524-6766
Tel.: 303-394-9996
Fax: 303-394-9981
Website: www.jainsonsintl.com

Linda Simon, owner
Matt's Incense
35 Enterprise Drive
Bunnell, FL 32110
Toll Free: 800-742-9133
Tel.: 386-446-3118
Fax: 386-445-9284
Website: www.mattsincense.com

Topic: Product Trends

Related Articles: oils  incense  fragrances 

Article ID: 815

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