IDEA FOR BUSINESS: PERFUMERY STORE
A perfume shop is a sales outlet where perfumes, colognes, toilet water, etc. are sold. What needs to be done for an entrepreneur who has decided to create such a shop?
Shop concept selection
The most common formats for selling perfumes are trading through the counter or using self-service, as well as through an online store. The first option is suitable for small retail premises, the second for supermarkets, and the third option is suitable for any person who is interested in their own business. Just imagine how many people look for and buy perfumes on a daily basis. Without customers, you certainly will not stay. In addition, this type of business involves a huge number of brands and a chic lineup. For example, Dolce and Gabbana, Calvin Klein, the perfume of Kilian Hennessy, Hugo Boss and many others.
There is another kind of perfumery shops that sell bottling. This format is ideal for entrepreneurs with a small start-up capital.
To do this, you must enter into an agreement with a supplier who will provide equipment for sale and the goods themselves for sale.
To determine whether it is advisable to open such a store in a particular locality, you need to conduct a marketing study of potential buyers. You need to understand the level of wealth of most residents. What is the average age of a potential buyer and how much does he follow the fashion and his image.
Experts argue that in small towns opening such a store is not advisable. Since neither the income level nor the mentality of their population matches the target audience of the perfume store. As an exception, we can name small resort or oil-producing towns in which the population has a fairly high standard of living.
The stylish interior of the perfume shop is the key to its success. It is important to create a special atmosphere of beauty and sophistication in the retail space.
The goods are displayed on glass windows and shelves. A large number of mirrors and light gives the interior a special charm.
However, experienced businessmen do not recommend spending a lot of money on rent. According to them, such a business would be unprofitable if the payment of rent would be more than ten percent of the turnover.
Work with providers
The best option for a perfume store is to conclude an agreement with direct distributors of perfumes. In addition to the original perfume, they provide materials for promotions. However, the purchase prices from such suppliers are high, so the trade margin can be made in the amount of not more than 15%.
Interaction with illegal suppliers is more profitable, since in this case the store can make a trading margin of 50 to 200%. However, for a good perfume store this option is unacceptable. Since no one can vouch for the quality of such a product. Experts say that for the formation of the optimal assortment, up to 75% of all products should be female perfume, and 25% – male. In this case, the list of goods must consist of at least twenty or thirty items.
The perfume business is seasonally dependent. So, in the autumn-summer period, sales are noticeably reduced. Maximum demand is observed in spring and winter during the holidays.
In addition, the economic situation in the country has a great influence on this business. During the crisis, the standard of living of the population and its purchasing power fall sharply. Accordingly, sales of perfumes are significantly reduced.
Profitability and payback
The profit of such a store primarily depends on the cost of rent and the terms of contracts concluded with suppliers of perfumes. The average level of profitability is from 20 to 25%. Initial investments pay off after about a year of successful activity.
Experts say that in our country there are still many free places in the perfumery market. Therefore, the idea of creating your own perfume store is profitable in the long term.
The disadvantages that can frighten novice entrepreneurs are the marked dependence of sales on the season and the standard of living of the population.