The perfume and cosmetics industry is a tough market for small businesses, where 75 percent of the industry’s revenue goes to the top 50 companies, according to Hoovers. But there is room for smaller competitors when you concentrate on your local market and provide exceptional customer service. Pay attention to consumer spending, fashion trends and local demographics to succeed against the giants.
Create Specialty Market
While the big cosmetic manufacturers can supply consumers with a multitude of products in a variety of locations, they often can’t serve the niche markets that prefer customized beauty products and one-of-a-kind scents. As a small business owner, seek out perfume designers and local facial cream producers and give them an avenue to create sales. Whether you own a retail boutique or a salon, provide shelf space for specialty items that can’t be purchased anywhere else. Unique products that provide consumers with the results they seek will find an audience.
Tap Into Online Marketing
In 2012, the perfume and cosmetics industry posted about $4 billion in revenue, according to IBISWorld, showing an annual increase of 7.8 percent over the previous year. With those increases, however, come more and more bargain hunters looking for bigger and better deals on the products they use. The Internet has become an increasingly important player in the cosmetics and perfume industry. Sales are expected to grow substantially through 2017, especially from the under-25 crowd that relies heavily on Internet shopping alternatives to retail stores. While the big producers may have extensive warehouse space to hold mass amounts of products and keep prices low online, entry to the field is relatively easy for small business owners through smart, effective websites and massive social media campaigns.
Keep Up With Changes
The beauty industry is rapidly changing with shifting demographics, consumer trends and technology. New fragrances appear on the market regularly and without a clear understanding of the marketability and acceptance of each new product, you could spend significant time guessing what your clientele wants. Successful entrepreneurs in the cosmetics and perfume industry keep up with changes through reports and marketing surveys taken by large companies designed to provide up-to-date information. Subscribe to an established market research publication such as those provided by the NPD Group, Hoovers or IBISWorld to keep up with the fickle, trendy marketplace.
Get and Stay Connected
Just as you might rely on your degree in business to help you create a business plan and marketing strategies, you need to stay connected with fashion industry leaders. Join professional organizations and take courses through institutions such as the Fashion Institute of Technology, the Fragrance Foundation or the Independent Cosmetic Manufacturers and Distributors. Take advantage of industry networking events, educational seminars and connections with distributors to maintain a successful business.
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She’s covered business for newspapers and magazines, including the “Greenville News,” “Success Magazine” and “American City Business Journals.” Ray holds a journalism degree and teaches writing, career development and an FDIC course called “Money Smart.”