In 2018, 1.64 million Americans spent approximately $500 on perfumes. This figure reached 1.98 million in 2019. The estimated global market size was valued at $31.5 billion in 2018.
This enormous size of the global market makes the fragrance industry undoubtedly worth investing in.
Still need persuasion? No worries. We are here to explain this market’s worth and why you should invest here. In this blog, we are going to discuss how and why the fragrance market is one of the best options for your wholesale business.
Cost to Start Wholesale Perfume Business
Wholesale businesses usually avoid entering the perfume business, especially luxury perfume, as this industry requires solid investment. According to a report by Arnold Zlotnik, a perfume business needs at least $8000.
As a wholesaler, this investment might look like a risk for you, but let us remind you that this business is one of the most profitable ones out there. With a little knowledge of the business and an excellent sense of fragrances, you can earn a lot.
For perfumes, the profit margin depends on the type of fragrance and varies between 60% to 75%.
Perfume bottles usually cost only 2% to 6% of the total price, with liquid 10% to 15% of the total cost. After adding packing, marketing, and other expenses, you can still get a 75% profit margin. This huge profit margin covers all the investment you put in this business initially.
Why You Should Invest in Wholesale Perfumes
Awareness and Hygiene Consciousness
Researches show that body odor influences the decisions of people. They avoid interactions with people having odor issues. This affects the social, official, and personal aspects of a person’s life. This increasing awareness and hygiene consciousness resulted in the demand for more perfumes.
Some people go for expensive; luxury perfumes and others prefer cheap perfumes to maintain their budget limit.
This forces retailers to stock a variety of fragrances. As a wholesale business, offering a wide range of perfumes can get you a good share of the market. Unlike many other wholesale businesses, the fragrance industry allows you to deal with different segments by contacting different suppliers and manufacturers.
Online Shopping Trends
The online perfume industry is booming. Unlike many other products, customers do not need to test the product for fitting or size.
With an increase of 7.2% from last year, the online perfume market reached $12 billion in 2020. Retailers are building their digital presence to secure their share in the online market. This increases their sales as they sell offline and online.
The high rate of online stores has opened the path to success for wholesale businesses along with retailers. In this digital era, even the wholesalers are available online for business.
Wholesale perfume businesses not only connect with retailers online, but also use online wholesale platform to find manufacturers and suppliers. The easy connectivity with retailers and suppliers has created a lot of opportunities for wholesale perfume businesses.
Mini Perfumes Availability
Unlike the old days, perfumes have changed a lot. With new fragrances and innovative bottle designs, they have become one of the most popular gifts.
The entry of mini perfumes in the market played a vital role in the industry’s advancement. Those who cannot purchase expensive branded perfumes can buy these perfumes in mini packing.
The affordability of the perfumes influences the market size. Many luxury perfume wholesale businesses are offering mini perfumes to strengthen their position in the wholesale industry.
Let us know in the comments below if you are thinking of starting a fragrance business or have a success story to share. Inspire us.