It’s an exciting time to be in the perfume industry: Sales jumped 13% in the US during the first quarter of 2024, and are projected to hit $9 billion annually by 2026. Consumers—especially Gen Z— increasingly prioritize luxury spending over long-term investments. The beauty industry is typically among the economy’s most resilient, and perfume is leading the way, thanks to a surge of TikTok trendsetters and new enthusiasts who are more likely to collect an array of seasonal and outfit-based fragrances rather than stick to one signature scent. That means a lot more Chanel and Le Labo hitting shopping carts.
Business-to-business (B2B) ecommerce is also surging: It’s an estimated $7.7 trillion industry, and by 2025, a staggering 80% of all B2B sales will happen online. Becoming a perfume distributor—the link between manufacturers and those energized consumers—presents a lucrative opportunity.
Distributors buy products from a manufacturer, then resell them to retailers in bulk at a lower cost than the recommended retail price (RRP). If you’ve already poured passion and personal time into perfume as a hobby, you could have a valuable leg up in the distribution business. Still, it takes specialized research and significant planning to become a successful distributor. We’ve compiled this guide to help you do just that.
As a perfume distributor, you’ll need to stay updated on the market dynamics of a multibillion-dollar industry with a wide range of products and brands, many of them international. Picking the right ecommerce platform—one that’s prepared to scale from day one—is one of the most important decisions you’ll make.
Here’s how to start building from the ground up.
1. Know your target market and who you’re distributing to
Follow the perfume industry: the trends, the topline issues, how to communicate to the enthusiasts. Identify your target market and how to connect with them.
Research the demographics, preferences, and buying habits of perfume buyers. Analyze market trends, competition, and consumer behavior to find a niche for your business. Maybe it’s selling to small retailers in shopping malls who are looking for trendy scents this holiday season. Once the holidays pass, perhaps it’s selling fruity and floral perfumes—the popular summer choices—in shops tourists frequent.
It’s a good idea to focus on smaller retailers, rather than shooting for big box retailers right away. For new distributors, it’s easier to get products in boutique stores, and they tend to take smaller cuts. Working with smaller storefronts will also ease you into finding order volumes that work for you.
2. Create a business plan for your perfume distribution business
A well-crafted business plan is essential for setting clear goals and outlining strategies to achieve them. Your business plan should include research on the perfume market, financial projections, marketing strategies, and operational plans. This will help you secure funding, attract investors, and make informed decisions.
Define your mission, vision, and values. This will lay the foundation for a unique, defined identity once your business starts to establish itself.
3. Get a wholesale license and other permits
Understanding legal requirements and regulations is essential for compliance, paying taxes, and avoiding legal issues. In the perfume industry, buyers are particularly wary of fraudulent and imitation products, so making sure your licensing is on point will help you earn a good reputation.
Wholesale distributors, in the fragrance industry and elsewhere, must obtain specialized business licenses to resell products. These reseller licenses cost $6,500 on average each. You’ll need a separate reseller’s permit in every state where your business operates.
4. Build relationships with suppliers and brands
To consistently source high-quality products—and get a good deal—you need to find the right fragrance suppliers. Research and identify reliable wholesale suppliers who offer what you’re looking for. Evaluate how these suppliers meet the requirements of the retailers you’re selling to.
You can begin to assess the playing field through online directories. Attending perfume trade shows is a great next step to network with industry professionals and gain IRL perspective in a sensory-based industry.
Building relationships with suppliers includes negotiating contracts, managing inventory, and ensuring timely delivery. These relationships will help you maintain a consistent supply of products and build a loyal customer base.
5. Determine perfume wholesale prices
Distributors sell products in bulk at prices below RRP, but you still need to make sure you’re getting enough profit to make your business worthwhile. Set prices that create a profit margin that’s conducive to reaching your budgetary goals. Keep retailer needs in mind, too: If they’re only getting a tiny discount, it won’t make sense for them to buy from you.
Aside from profit margin, consider the guiding B2B principles of customer acquisition cost (CAC) and customer lifetime value (CLV). How much does it cost you to attract new customers? And once you’ve brought them in, how much value does each customer present? In order to maximize CLV, you may want to introduce tiered pricing to your wholesale pricing plan. Tiered pricing offers lower prices to buyers who place larger orders, incentivizing them to order more.
Also, remember that businesses who buy wholesale typically pay several weeks after receiving their products. Net 30 and net 60—meaning 30 or 60 days from invoicing to the time payment is received—are the most common payment structures. Decide how long you’re willing to wait when establishing your business’s payment rules.
6. Set minimum order quantities
Wholesale suppliers typically set minimum order quantities to ensure their business remains profitable. A small wholesale order doesn’t create enough revenue to offset the outlay of time, packaging, shipping costs, and other valuable resources. Determine the order size necessary for you to turn the profit you’re looking for, then set the desired quantity in your webstore.
7. Shoot product stock photos
Stock photo best practices in B2B wholesaling differ from those of B2C. While it is true that B2B buyers increasingly expect a B2C-like experience (i.e., splashy designs and interactive features), there are certain B2B standards you should stick to.
Display products on simple, plain backgrounds in high-resolution photos. Present the perfume and its packaging in a way that highlights its quality and authenticity. Remember: The fragrance community is wary of counterfeit products, so while you should strive for simplicity, low-res, repurposed stock photos can be a major turn-off.
8. Manage inventory and fulfillment
You don’t want to launch your business and quickly find your storage space swamped with $10,000 of perfume boxes you’re unprepared to sell. Managing wholesale inventory and fulfillment is essential for ensuring timely delivery of products and reducing costs.
Start by creating an inventory management plan. This plan should include tracking stock levels, managing storage, and optimizing shipping. As your business grows, transition from spreadsheets to inventory management software (such as QuickBooks Commerce and Ordoro), so you can automate inventory tasks and maximize efficiency.
Set up a distribution network to manage the flow of products. Storage and management of inventory must be accounted for. From there, create a logistics and transportation plan to ensure timely delivery of your products. Consistent inventory and fulfillment will gain you the trust of buyers and grow your business over time.
9. Build an online wholesale store
Once you’ve established your business model and have your operations in order, the next step is designing a buyer-friendly webstore.
Decide whether you want to go with a dedicated storefront or a blended storefront. A B2B-only dedicated store caters exclusively to your B2B customers, while the blended approach combines B2B with B2C, and lets you manage all your customers from one unified back end. Shopify typically suggests going blended for the flexibility it provides. But certain circumstances—for instance, if you handle your B2B inventory separately from B2C —can necessitate the dedicated approach.
After deciding on a storefront model, follow these best practices for B2B ecommerce website development:
- Define your business goals and tailor your site accordingly.
- Research your target audience and design your site to draw buyers in.
- Incorporate responsive design and prioritize a great user experience.
- Optimize for easy, efficient search and navigation.
- Integrate your customer relationship management (CRM) system.
- Integrate your enterprise resource planning (ERPs) systems.
- Implement secure payment processing and ensure compliance.
- Raise the profile of your site using search engine optimization (SEO).
- Develop a content marketing strategy.
- Thoroughly test your site before launch.
- Analyze performance and optimize regularly.
- Plan for scale and growth.
Out of the box, Shopify can help a wide range of B2B retailers build modern, intuitive wholesale experiences. Check out our eight essential B2B ecommerce features to look for in choosing an ecommerce platform.
10. Market and promote your perfumes
You’ve fine-tuned your webstore to sell your perfumes to buyers—now it’s time to get the word out.
To attract early customers and establish an online presence, develop a marketing strategy that includes digital marketing, social media, and advertising. Consider launching an email newsletter—a great way to offer your customers value (news and insights about the perfume space) while simultaneously marketing your products to them.
You may also want to identify influencers relevant to the perfume space and explore potential relationships to further establish your business.
One more key: Two-thirds of B2B customers consult search engines during the purchasing process. Utilize B2B SEO strategies to help turn your browsers into buyers.
11. Ensure customer satisfaction and retention
B2B wholesaling involves significantly more follow-up with customers than B2C sales. Check in with early buyers: What did they think of their purchases? How did their customers respond? Be ready to attend to concerns.
Ensuring customer satisfaction and retention is crucial for long-term success. Strategies for retention include loyalty programs, discounts, and exclusive offers.
Remember: You’re much more likely to get sales from repeat customers than new customers. Repeat customers have already put in the legwork, and their shoppers have likely responded positively. Foster these relationships.
12. Scale your business across borders
Once you’ve established a foothold, consider expanding your operations to bring your perfumes to new markets.
Aside from the obvious benefits of increasing sales, cross-border B2B ecommerce can help your operations endure regional sales slumps, enhance your products’ lifespans, and extend selling seasons (for instance, by boosting sales internationally in months beyond North America’s’ fourth-quarter holiday rush).
Scaling your business involves leveraging technology, such as inventory management software and ecommerce platforms. Shopify makes it easy: With Managed Markets, you can set up shop in new markets with customizable product content, prices, and payment methods for each country or region.
Let’s build together
Perfume has been popular for millennia, and the current boom of fragrance commerce is coming into focus. Perfumes are increasingly likely to sell online, but giants like Amazon aren’t necessarily equipped to dominate the space. Wholesale perfume buyers—and their enthusiast customers—value expert acumen and full confidence that their purchases are 100% authentic. This gives specialized distributors a unique opportunity in the market.
Shopify is the world’s most powerful and scaled platform, and we’re passionate about where ecommerce is headed. Let’s explore how we can jump-start your plans.
FAQ on how to become a perfume distributor
How do you become a perfume distributor?
The perfume industry has boomed throughout the 2020s, particularly online, creating a great opportunity for B2B distributors. To become a perfume distributor, you must purchase permits such as a reseller license for the places in which you wish to do business. Once you’ve established a business plan, you must build an online wholesale store and forge relationships with suppliers and brands to stock your inventory.
How do you start a perfume selling business?
Starting a perfume selling business begins with market research and establishing a business plan that will ensure your business is profitable. Build relationships with suppliers whose products you plan to sell. Make sure you purchase necessary licenses to conduct a distribution business. Decide which ecommerce platform is right for you, and build an online wholesale store that’s prepared to reach your goals.
How much does it cost to start a perfume business?
The cost of starting a perfume business varies, but core expenses include purchasing necessary business licenses (reseller licenses cost $6,500 on average), buying inventory from suppliers and brands, paying for your ecommerce platform, and the costs of marketing and promoting your business.
How do you become a fragrance vendor?
To become a fragrance vendor, you must purchase permits (such as a reseller license) for the places in which you wish to do business. Once you’ve established a business plan, you must build an online wholesale store and forge relationships with suppliers and brands to stock your inventory. It is important to set your wholesale prices strategically to ensure your business is profitable.
