The Business and Profitability Of the Perfume Industry

One of the fastest growing categories in the fashion and cosmetics is the fragrance industry.  Fragrances (such as perfumes and colognes) are products that are widely used by both men and women.  Most of these users don’t just buy one scent, but several.  To accommodate these needs the fragrance industry introduces thousands of new perfumes, toilettes, eau de toilettes, and colognes each year.  The perfume industry alone brings in global sales revenue of $25 to $30 annually to the cosmetics and fashion industry.  Research has shown that the perfume market is growing at an astonishing rate accounting for upwards of 90% of the revenue for some of the designer cosmetic and fashion houses.

What is it that makes perfumes such a profitable market?  The companies that are creating these fragrances are brilliant at making you, the consumer buy their product.  They are selling you an image, a fantasy.  They create these elaborate ad campaigns that lead you to believe that by wearing a certain fragrance you will be able to emulate the fantasy you see before you.  Whether it be fun, flirty, seductive, young, athletic, romantic, or edgey, they leave no genre untouched.  Not to mention the markup on perfumes and colognes is extremely profitable!

Then, to make their fragrances even more irresistible, the perfume gurus snare some impressive endorsers.  In 1957, Audrey Hepburn became one of the first celebrities to endorse a perfume, L’interdit by Givenchy.  This began a new marketing phenomena.  Everyone wanted to be like Audrey, so the idea was planted that you could be like her, by smelling like her.  Now, hundreds of celebrities endorse fragrances, rocketing their sales into the millions of bottles sold.  It has become such a popular means of advertising that many celebrities have chosen not just to be the face of a designer perfume, but to be the creator of their own.

In 1991 Elizabeth Taylor released her own fragrance called White Diamonds.  She was the face and voice of the product.  Consumers were made to feel that if they wore her fragrance they could be as glamorous and luxurious as Elizabeth Taylor.  White Diamonds has continued to be one of the most famous fragrances in the market even after the death of Elizabeth Taylor.  Since then many have followed in her footsteps.  In 2003 Jennifer Lopez entered the market with her own fragrance, Glow netting over $38 million.  Sarah Jessica Parker came out with her own fragrance as well.  And though it was met with less success than other celebrity fragrances it still earned well over $3 million in sales.

The perfume industry is clearly one of the most lucrative branches of the cosmetic and fashion conglomerate.  Who doesn’t want to smell good?  Scents trigger certain memories in the human brain.  People want to be remembered, and to be remembered whenever a certain fragrance is wafted through the air, whether you are a celebrity or an everyday consumer, is a wonderful thing.