Have you thought about starting an essential oils business? There are some things you need to before you open up shop or sign up for any special programs.
There are a few options for running an essential oils business:
- Online retail sales
- Retail sales in a local shop
- Affiliate marketing sales
- Network marketing sales
The common theme: sales. To run an essential oils business, you need to build your skills in marketing and closing sales. The only way around this, is to hire people to do it for you.
Before starting an essential oils business, you need to choose whether or not you want to manage inventory. Then decide how you want best to serve your customers.
Next, choose a brand to endorse. Contrary to many blogging and aromatherapist opinions, there are huge differences in the quality of oils in different oil brands. There are a few questions you should be asking about the manufacturing and bottling processes to ensure the oils you’ll be selling are actually essential oils. Per FDA and FTC regulations, there is no legal definitions for what an essential oil is. An essential oil, in legal terms, is a generic description with no regard to what it is or how it is created. Ensuring you’re selling true essential oils will go a long way to building a relationship and trust with your customers.
A word of warning, before starting an essential oils business:
The FDA/FTC has several regulations you will need to research. The main thing you absolutely need to know about before entering any type of marketing, whether your own store or marketing for a different manufacturer is that it is illegal to make any health claims about essential oils and any disease, diagnosis, or medical ailment if you could potentially receive any type of compensation for the essential oil related sale.
The FDA is slowly prosecuting people for unapproved claims. This is not just related to large companies, but also applies to small businesses, blogs, social media marketers…etc.
Starting An Essential Oils Business By Running Your Own Store
Managing online retail sales through your own website and managing retail sales in your own shop will require inventory management, and possibly shipping as well. You’ll definitely need an LLC at the minimum, liability insurance, and the space available to store your inventory.
Once you’ve decided what you plan to sell and a location (local and/or online), you’ll need to find oils at a wholesale or manufacturing cost to be able to mark up your prices to cover all your overhead and marketing expenses, plus leaving you some profit. You’ll need to do the same for any ingredients for products you decide to make too.
It is common practice for businesses who are doing well to profit only 2-5% of their total sales. You can easily increase this by purchasing straight from manufacturers and cutting out the middle wholesale suppliers/brokers. You will want to employ a solid marketing team to help drive new customers to you and your sales team if/when you decide to employ a sales team. If you choose not to, you’ll need to become skilled at marketing, closing sales, and customer service.
Starting An Essential Oils Business Through Affiliate Marketing
Many manufacturers use their marketing budget to pay people skilled in internet marketing to advertise their oils. This is very common among bloggers, social media influencers, and email marketers.
Affiliate marketing basically means when you advertise someone else’s products, you are paid a commission on what shoppers purchase through using your unique links.
This is probably the easiest way of making money. When you write about something in either a blog post, email, social media post, email, or website, you can link to products that correspond with what you’re talking about, and make a small commission from any subsequent sales.
When done right, affiliate marketing can even produce a stream of “passive income.” Passive income is where people receive income from a source even after they stop actively promoting it. With a little work up front, you can receive income each month without actively working on that exact project.
This is a much more efficient business model than running TV and newspaper ads, or even than running social media ads because the company only pays the people marketing their products for actual results.
Starting An Essential Oils Business Through Network Marketing
In case you haven’t noticed… network marketing is hotly debated in the essential oil realm. Contrary to the thousands of blog posts bashing the marketing strategy, Network Marketing is not a pyramid scam. It also isn’t a get rich quick scheme. And prices are not inflated to manage their compensation plan. In fact, it is common practice for companies to spend 50% of their sales revenue to cover marketing expenses, regardless on how the marketing is conducted. The best part for a company using network marketing… it is ONLY paying for marketing that results in sales.
When a business uses network marketing as their marketing strategy, their marketing budget pays marketers for a commission on what is sold through their memberships, plus leadership bonuses for the success of the people they train. Just like Affiliate Marketing, Network Marketing is a much more efficient business model than running TV, direct mail, social media, and newspaper ads because they are only paying the rep’s for actual sales instead of throwing money out into various methods hoping someone will come along and purchase.
The biggest difference between Affiliate Marketing and Network Marketing is Network Marketing provides leadership bonuses for teaching other people to help market the products too. In fact, many Affiliate Marketing programs now offer bonuses for their Affiliates for recruiting new affiliates, which is, in essence, Network Marketing. Why? Because when marketers take their time, energy, and expense to train new marketers, the company’s sales grows exponentially faster. And when those marketers recruit additional marketers the process happens even faster.
The downside to network marketing…
For a long time I’ve been very much anti MLM, along with “social marketing” and “Direct Sales,” which are types of Network Marketing. Too many people aren’t taught appropriate marketing skills, causing them to become pushy, spammy, or obnoxious, giving network marketing a poor reputation. This doesn’t mean its a scam… just too many people taught ineffective ways to market their opportunities and products.
The bottom line… you get paid based on your results. There is no scam involved.
** PLEASE NOTE ** Not all teams and companies are the same. Choosing the right team is just as important as the company you decide on. If you choose to incorporate Network Marketing into your business, be sure you know exactly what type of support to expect and whether or not the team you’re thinking about joining has knowledge in how you plan to grow your business.
Which business model is best?
When starting an essential oils business, the how/why/what you end up choosing 100% depends on what is best for you.
How do you envision your life?
Imagine for a moment… you just finished your morning routine, placing your golden key into that silver lock to open up your door… that beautiful smell greets you as you walk through the threshold, reminiscent of walking into your favorite spa. You sit at your desk, looking at your inventory report, wondering what you need to order next before tackling your marketing strategy. You meet and greet your customers as they trickle in, strategizing over what else you can offer them to purchase before they leave.
Maybe you decide to plan a few DIY classes to run next month. Or maybe you’ve decided to open your extra office to contract a massage therapist. Your mind is always running on what the next thing will be to help increase sales to cover your overhead expenses and lifestyle needs. If this sounds enjoyable, you should look into running your own shop… either online, offline, or both.
Or perhaps you need something a little less time-intensive…
Think of this… You hop online for a few hours a day to write or record video about a product, something you did, or a fun fact just learned. Then go about your day doing life the way you need to do, periodically checking in to your email or social media accounts to review any comments or questions. Perhaps you want to enjoy the
- flexibility of hopping on your computer from the beach, the vacation resort, or even while you’re kids are playing in the backyard.
- time freedom you have of not missing any of your kids’ extra curricular activities.
- knowing that 90% of what you create is reusable content.
- hyper-focus abilities with solely sharing information, not needing to worry about inventory, shipping, fulfilling orders, handling financing, or manufacturing.
If this sounds intriguing to you, then you may find your home in the affiliate or network marketing realm.
How to know which option is for you:
There are positives and negatives to everything. If the first scenario above appeals to you, know you will need to eventually hire a team to help you. Without a team, you will become a slave to your store. Owning your own business takes a lot of time and often can turn into owning a job. This also will require employees to help, or foregoing sales revenue to take a break in case of emergencies or vacation needs. These setbacks are ok, just as long as you are aware of them.
Some companies employing the affiliate marketing model allows their marketers to receive a percentage of all the purchases the customer makes for the lifetime of that customer’s account. This sets up the affiliate marketer for “residual income,” which is passive income that continues, even when you’re no longer doing anything to earn it. Other affiliate programs only offer a referral fee on each individual purchase that resets after each click.
As described earlier, network marketing allows you to operate in a similar manner to affiliate marketing. You receive a commission or bonus on what the customer purchases for the life of the customer’s account. Plus, you’ll also receive a leadership bonus for the success of everyone you train. This allows you to produce passive income that grants you
The downside to affiliate and network marketing programs is you are limited to following the policies of the company you’re marketing and you’re relegated to only promoting their discounts as they see fit.
Best of both worlds?
There are also programs that integrate the two to combine two programs, especially if your physical shop has an online and social media presence.
Some MLM companies offer professional accounts to retail establishments. This allows them to purchase their products at a reduced rate (lower than wholesale) for the intention of them reselling in a retail store, salon, or spa (etc).
Combining options like this would enable you to simultaneously help customers who love your products to order through you online. You could offer them the option of purchasing through your store at retail prices, or to purchase through you online at wholesale prices, which would allow them to enroll in the monthly auto ship program, and provide you with additional passive income. Personally, I do feel this is the best of both worlds.
The options we use and highly recommend
I’m a busy mom who stays home with two small children, and married to a man serving on active duty in the military. We move A LOT (every 2-3 years), which means a lot of uprooting everything frequently with little notice. I’ll never forget having 3 days notice to move from Rhode Island to Virginia! Our lifestyle doesn’t leave much room for a physical retail shop setting, as much as I do daydream about it.
To keep our family life as simple as possible, I use the internet for 100% of everything I do for my business.
Because I love teaching about business strategy (a love I developed in college), employing both Affiliate Marketing and Network Marketing made sense for my family.
Here on EssentialOils.Life, we use some affiliate marketing links to help fund this website without using obnoxious ads. Running your own website can be expensive (ours costs are slightly over $2,000/yr), so having a steady income from affiliate product sales definitely helps. You’ll notice most bloggers do this too, including ones who use ads. This allows us, and most bloggers, to focus on providing additional content for you to learn from and enjoy without having to worry about website management affordability. Plus it helps us feed our kids (Lord knows they love food).
We do utilize the MLM business model as well through Young Living, and thoroughly enjoy it.
Coaching new members on embracing a healthier lifestyle is super rewarding. Being able to put my business degree to use coaching business leaders has been incredibly fulfilling.
I truly believe this is the best of both worlds, especially with having an INFP-A personality (know your personality type here). I absolutely love being able to teach new business leaders how to properly run their businesses according to their lifestyle, values, strengths, personality, needs, and wants. It’s a lot of fun to witness my leaders growing their business effectively without being spammy, awkward, aggressive, or obnoxious.
Lets hear from you!
Have you thought about starting an oily business? Tell us about it in the comments below!
PS – if you found this post helpful, please like and share. For more information on how to work with our team, head over to our work with us page.