Perfume Online Shop: Enjoy the Sweet Smell of Success with Your Own

18/11/2018 18:00 | Start a business

perfume online shop

Opening an online perfume shop may be the perfect way to realise your dreams of managing your own business and working from home. If successful, it could also form the basis of a strong franchise. Here, we take a look at how you should begin going about launching your online perfume shop, with the aim of franchising it at a later date.

Perfume shop online UK

While there are many online retailers of perfume, theres opportunity within the market for uniquely branded online perfume shops. Fragrance is often sold through large retailers who offer a diverse range of products. As such, they lack exclusivity and a sense of specialist knowledge.

A dedicated perfume online shop could exploit this by launching a brand that focuses its attention on becoming a respected, trend-conscious retailer with a distinct personality, a strong social media presence, and its finger on the pulse when it comes to customer demand.

An online opportunity

An online perfume shop presents a challenging but promising opportunity. While perfume is typically a product that consumers use their senses to purchase in person, an intelligent business person should be able to launch an online platform that offers customers an alternative but equivalent shopping experience.

To do this, youll have to sell perfume by getting customers to buy into your brand. If successful, the low overheads associated with an e-commerce business should result in a remarkably profitable business venture. However, to establish whether such a business is viable, youll first need to perform thorough due diligence. Here, we take a look at how you can go about this.

Five key steps in performing due diligence

1. Examine the market

One of the first steps in any due diligence process is to examine your target market and assess how suitable it is for investment. This means looking at market conditions and whether other perfume businesses are succeeding or struggling, while also trying to establish whether there are any obstacles to business growth.

To do this, you'll need to look at the regulatory bodies that impact on your particular line of business and research the financial performance of companies similar to your own. Are there any changes to the law that may impact your business in the future? How do digital trends affect your online business? Do people even buy your product online?

2. Scout out the competition

Possibly the most crucial aspect of your due diligence process is examining the competition. Theres absolutely no point in launching a business thats in direct competition with an established, popular brand that already benefits from a large and loyal customer base. Youll spend a considerable amount of time and resources attempting to convert customers to your products, and theres no guarantee that this expensive tactic will even work.

As an online perfume retailer thats hoping to franchise in the future, its necessary to distinguish yourself from the competition. As theres no physical, brick and mortar store to attract customers, youll have to rely on strong brand identity. An online retailer needs to find its particular niche and build a client base upon these foundations.

3. Make the necessary financial calculations

As a business owner, you need to be confident that your venture is financially viable and capable of turning a profit. If its not, youre merely sinking money into a project thats doomed to fail. Its highly likely that youll have to rely on financing from a lender to get your business off the ground. To convince them that their investment is secure, youll need to provide them with compelling evidence that your business can make money.

What sales figures will you achieve? How much profit will you generate? What amount will you need to reinvest in the business? What additional expenses will you have? All of these questions need to be answered and placed within the context of a comprehensive financial report, as part of an effective due diligence process.

As a franchisor, youll also need to provide prospective franchisees with financial data. No franchisee will part with a franchise fee if they dont have access to information concerning the earning potential for their new franchise unit. This means that you'll have to develop another distinct set of financial statistics that provide would-be franchisees with the data they need to make an informed decision.

4. Employ the assistance of legal and financial advisors

Launching a regular start-up involves a considerable amount of legal paperwork and documentation. Starting a franchise involves even more so. The franchise system is dependent on the franchisor being able to retain control of the way the brand presents itself and the way that its trademarks and intellectual property are used. They do so by defining the franchisor/franchisee relationship with a detailed legal framework.

When starting a business, youll likely require the assistance of an accountant or financial professional. Not only will they often save you money by informing you of the most practical and efficient ways of transferring, saving, and spending your business resources, theyll also identify inconsistencies in your records or projections. Likewise, a legal advisor is necessary to help draft the documents that will form the basis of your franchise. Without a strong legal foundation, youre opening yourself up to difficulties with franchisees in the future.

5. Research the customer base

Finally, all businesses whether franchised or not need to understand their customers if theyre to survive and thrive. Customer demand is always fluctuating, and markets are exposed to whims and trends that businesses must ride if theyre to remain relevant. A business brand should appeal to contemporary tastes, while its products should also reflect current demand.

However, its also necessary to understand consumer habits if youre to sell effectively. As the owner of a perfume shop, youll need to know when customers buy their perfume online. Do they do so for themselves or as a gift for someone else? Do they only purchase when they find their favourite scent at a discounted price? What makes them choose one perfume over another when shopping online? In other words, establishing how your customers behave in the online realm is essential to launching a thriving e-commerce business.

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