Perfume Oil Business Plan, With a 12-Month Projection

A perfume oil business plan sets out the scents you'll blend and who buys them, what a bottle costs and sells for, the safety and records a fragrance maker keeps, and the first year month by month. Perfume oils, fragrance blended into a carrier oil and sold in roll-on bottles, are one of the easiest fragrance products to start: no alcohol, no spray pumps, a few milliliters a bottle. The margins are high because a 10 ml bottle holds less than a dollar and a half of fragrance. That's also why the category is crowded, so the plan's real work is selling, and the marketing line is the largest fixed cost. In the example below, a perfumer in Rhode Island sells roll-ons direct and wholesale, solid perfume tins and discovery sets, makes a profit from the first month, and ends the year about $35,500 ahead on $57,700 of sales, after paying $20 an hour for the filling and $500 a month for marketing. Below is a description example, each part of the plan, safety and records, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the scents, where you sell, the workspace, the goals.
• Cost a bottle from the fragrance up: at 20% concentration, 2 ml of fragrance in a 10 ml roll-on.
• Price direct and wholesale separately; boutiques pay about half.
• Sell discovery sets: small vials that turn a browser into a buyer of a full bottle.
• Keep each fragrance within its supplier's stated maximum use level, and keep the records.
• Budget for marketing; in fragrance, selling is the biggest job.
• TaroStack keeps formulas, oil lots and every batch together. More below.

Part 1: the business description

Wild Iris Perfumery, a made-up perfumer in Providence, Rhode Island, I use in these examples, writes:

Wild Iris Perfumery blends perfume oils and solid perfumes in small batches, sold at markets and online, wholesale to boutiques, with discovery sets of five scents. Every bottle carries a batch code and a way to reach us. In our first year we plan to supply 15 boutiques.

Part 2: what a bottle costs

A roll-on is 2 ml of fragrance blend, about $1.33, in 8 ml of fractionated coconut oil. The discovery set's five 2 ml vials hold the same fragrance as one roll-on but take three times as long to fill and label. How to cost a formula by the milliliter is in how to calculate cost per ounce.

Part 3: customers and prices

A boutique roll-on leaves $10.70, under half a direct one, but 15 boutiques with a scent on their counter reach people who'll never find a website. The discovery set leaves $18.32, less than a full roll-on sold direct, but it's how online buyers choose a scent without smelling it. How to set a wholesale price a boutique will accept is in how to price handmade items for wholesale.

Part 4: safety and records

Perfume is a cosmetic. Fragrance suppliers publish the maximum level each oil should be used at in each kind of product, often on an IFRA certificate, so the formula keeps every oil within its stated limit for leave-on skin products. Under MoCRA, a small business is excused from facility registration and product listing but not from reporting serious adverse events, keeping adverse event records, or keeping records that back up each product's safety, and every label needs a US address, phone number or website for reactions. Skin reactions to fragrance are the ones to expect, so each batch's record should name the oil lots that went in. What counts as small under MoCRA is in MoCRA for small businesses. This is general information, not legal advice.

Part 5: the first year, month by month

Fixed costs are $925 a month: a studio share ($150), market fees ($150), marketing, ads and samples ($500), insurance ($50), the website and online shop ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $57,664 and the profit $35,490, on top of $20 an hour for the filling. If sales reach only half the volume, the profit is about $12,200, so the marketing line decides the year.

Part 6: the startup budget

Get the template

Download the perfume oil business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twelve scents, each a blend of five or six oils from three suppliers, in roll-ons, tins and vials, with 15 boutiques reordering. When a customer writes about a rash, a notebook can't say which lot of which oil was in that bottle, and the most popular blend runs out of its key oil the week before the holidays.

How TaroStack does it

TaroStack keeps the formula, the lots and the batches together.

Formulas with versions. Each scent is a recipe with versions, every oil by weight, and units convert: fragrance bought by the ounce, weighed by the gram. A change to the blend is a new version, and every batch records which one it was made to.

Batches with their lots. Recording a batch takes the oils, bottles and labels off stock from the lots used, at what you paid, and notes the lots automatically. One report goes from a bottle's code to its batch, its oil lots and every customer who got bottles from it.

And the boutiques' orders. Boutique reorders are sales orders that show whether the bottles to fill them are on the shelf while you're still typing, the reorder list works in days of cover so the key oils arrive in time, and margins are reported by product and by customer.

Recipes, batches, lots, recalls and margins by product and customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a perfume oil business profitable?

It can be, if it sells. In the example, a perfumer selling roll-ons direct and wholesale, solid perfumes and discovery sets ends the first year about $35,500 ahead on $57,700 of sales. At half the volume, the profit is about $12,200.

How much does it cost to make a roll-on perfume?

In the example, $4.04 for a 10 ml roll-on sold direct: $1.33 of fragrance, 10 cents of carrier oil, 55 cents for the bottle and roller, 55 for the label and box, 67 cents of filling and the card fee.

How much should I charge for perfume oil?

Cost it from the fragrance up, then price direct and wholesale separately. In the example, a roll-on costing $4.04 sells for $28 direct and $14 to boutiques.

Do I need a license to sell perfume?

There's no federal license for cosmetics, but MoCRA's rules on adverse events, safety records and labels apply. Keep every oil within its supplier's stated maximum use level, and check your state and city for business licenses.