How I turned $200 into a million dollars (Part 2)

Where did I go wrong?

At this point, I felt that I had made a smash hit of a perfume, but the people of the world begged to differ. I couldn’t get anyone to purchase my product, let alone even click on it. I knew I had a great product on my hand, but I had to figure out how to convince others. Hindsight is 20/20 - I now know that my problem wasn’t the product, rather it was the positioning of the product. I was pitching this perfume to people like me. And people like me didn’t need a flowery, feminine perfume when their needs were being met by the Chanels, Diors, and Givenchys of the world.

But who needed this amazingly beautiful perfume that I had made? I dug my heels in and did some market research - again I know the term for it now, but at the time I would have called it “frantic, yet somewhat organized internet searches.” These searches led me to a possibility I had never considered - maybe there was a community of people who wanted a feminine-smelling perfume but didn’t align with the high-end luxury brands currently dominating the market. The type of person who not only didn’t align with those brands but would favor an “indie brand” over a commercial brand.

I had found a community of these customers on an internet message board (remember, this was the early 2000s) and their chief complaint was that they wanted the gorgeous smells of well-made perfume, but didn’t want to have a bottle of the latest luxury scent or hot pop star’s designer fragrance on their dresser.

They wanted something different. And I was about to give it to them.

One Minor Adjustment

You may think that after my discovery I went about rebranding the business in it’s entirety. I was tempted but decided to do a simple test first.

I changed the label on the bottle and tweaked a few adjectives in the scent description. That’s literally all I did.

There seemed to be no need to change the composition of the scent, I just had to figure out how to position it to a new audience. What would appeal to this new, edgier customer that had the elements of roses, grass, dirt, and moss? A graveyard. BINGO. I re-christened the perfume “Garden of Graves,” printed out a new label, and put it back up for sale.

Every single bottle sold out overnight.

I had just turned $200 into over $350. Now my wheels were turning - how could I turn that $350 into $1,000? How could I turn that $1,000 into $1,000,000?

A Profitable System

I had struck gold and the business bug had bitten me, so I did the only thing that felt natural at the time - I quit my job. I had a slight bit of savings, but I had even more of a drive to succeed on my terms. I burned the boats and now it was time to sink or swim.

I knew if I was going to make this work, and work in a way that I would be able to pay my bills, I would need to not only make sales, but I would also need to make a profit.

I took out a pen and paper and quickly broke down my costs - the bottles, the pipettes, the oils, etc. Which items were one-time use? Which could be used over again? Which supplies could contribute to more than one item- could I make another slightly different rose scent and use the same oil? When all was said and done I had a “right now cost” of how much my supplies cost me as well as a “bulk purchase cost” which was what the supplies would cost me when I was able to repeat the selling process enough to have the extra capital to purchase items on a more wholesale basis.

Soon I was able to manufacture each bottle of perfume for under $1 per piece and I was selling them for $15. This was a profit margin of over 90%. That means that every time I made a sale, I was able to either pocket or reinvest over 90% of that money. And by industry standards, that’s pretty dang good.

Through a combination of smart supply buying + adding value to my products by making them stand out from the crowd I was able to systematize a creative product business and knew before long I wanted to try my Wash + Rinse + Repeat system on another company, I just had to keep my eye out for other business opportunities in the future.

Read about that amazing opportunity next in Part Three.