What To Know Before Starting An Essential Oils Business

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Have you thought about starting your own essential oils business? There are some things you need to before starting an essential oil business or signing up for any aromatherapy business opportunities.

No doubt about it, the essential oil industry is growing by leaps and bounds… far more than predicted. I remember reading in 2016 that the essential oil industry was predicted to reach $1 Billion by 2020. My essential oil colleges and I were wide-eyed, surprised in seeing the growth potential. Now that 2020 has come and gone… the global market ended up exceeding $18 Billion! And seeing the significant growth trends continuing, I would suspect that is only the tip of the proverbial ice burg, especially considering all the wellness related benefits of essential oils.

Options for running an essential oils business:

• Online retail sales
• Retail sales in a local shop
• Essential Oil Education
• 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:

1. Choose whether or not you want to manage inventory.
2. Decide how you want best to serve your customers.
3. Choose your essential oil brand (or create your own)

Contrary to many blogging and aromatherapist opinions, there are huge differences in the quality of oils in different oil brands. In fact, there are several dirty little secrets plaguing the essential oil industry. If you're planning to stand out in the crowd of shady business techniques, make sure you're not also falling for deceptive wholesale marketing.

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 are no legal definitions of what “essential oil” is. So all those labels that say “100% Pure Essential Oils” may not be telling the whole truth. Same with all companies promoting their “natural products.”

An essential oil, in legal terms, is a generic description with no regard to what it is or how it is created.  Ensuring you are 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 oil business

The US FDA/FTC has several regulations you will need to research if you're in the US. If you're not in the US, your country will have a similar agency with similar rules you'll want to research before you start building content for your marketing plan.

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, marketers on social media platforms…etc.

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Starting Your Own Essential Oil Retail 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.

For your first step… you'll definitely need to acquire a business name, LLC, liability insurance, and retail space to store and display your inventory.

Once you've decided what you plan to sell and a location (local and/or utilizing an online store), you'll need to either acquire or grow the plant material to create your own oils and oil-infused personal care products yourself or find oils at a wholesale or manufacturing cost from an essential oil company. Ideally, you'll want to be selling organic essential oils to keep up with the growing consumer demand for higher-quality products. This may also require you to fill your own essential oil bottles too.

Be sure to mark up your prices to cover all your overhead, product procurement, production costs, and marketing expenses, plus leaving you some profit. Yes, organic oils are more expensive, but there are plenty of consumers all over the world who prefer quality over finding a lower price so they can experience greater essential oil benefits.

It is common practice for businesses that are doing well to profit only 2-5% of their total sales. It is wise to be prepared for that and ensure your profit margin leaves you space for paying yourself and covering your overhead expenses including future employees. **This statistic comes straight from classes I took while earning my business degree

You can easily increase this by purchasing straight from manufacturers and cutting out the middle wholesale suppliers/brokers. For example, the essential oils company I endorse across all my websites provides a 40% discount for resellers on all of their products… which is a much more of a discount than purchasing at wholesale for 24% off the retail price.

You will at some point want (or need) to employ a reliable team to help drive new customers to you and your sales team and provide customer service.

If you choose not to hire a team, you'll need to become skilled at marketing, closing sales, and customer service. Though when you're able to afford it, I highly recommend hiring a team to help you so you can avoid burnout and keep your stress lower.

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Starting Your Own Essential Oil Education Business

A great way to set up a business, or add to an existing business, is to create an education portal for people to come to you to learn about essential oils.

While you don't need a degree or license to sell information, it is beneficial to be a perpetual student attending regular training, classes, or seminars throughout the essential oil industry. This aids in your process to learn and sharing.

Of course, if you're selling courses, it makes sense to include some sort of an affiliate program where you reward marketers for helping you acquire students. It also makes sense to add additional streams of income by joining some sort of an affiliate program and link to high-quality products that will enhance and support your students through their learning.

Courses about essential oils can be held online or in person.

Online courses can be live, or automated. When getting started, I recommend live courses that then move to be evergreen (automated) courses.

In-person courses can look like seminars, informal classes, or community events. You can also record in-person courses or seminars and sell them online through an automated course system in a learning portal on your store's website as well.

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Creating Your Essential Oils Business Through Affiliate Marketing

Affiliate marketing makes creating an online business centered around essential oils easier than ever. Simply link your unique link to an essential oil product as you build a following and share information about it. This does work best if you have a website, but with the prevalence of social media and email autoresponders, it isn't completely necessary.

Many manufacturers use their marketing budget to pay people skilled in internet or social marketing to advertise their essential oils and oil-infused products. 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 affiliate 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 an endless stream of “passive income.” Passive income is where people receive income from an “evergreen” source even after they stop actively promoting it. With a little work upfront, you can receive income each month without actively working on that exact project. As a blogger, this is one of several tools I use for achieving enough income to not have to work a traditional job and afford to homeschool my kids.

This is a much more efficient business model than running TV and newspaper ads, or even running social media ads because the company only pays the people marketing their products for actual results.

The downside to affiliate marketing

What few people talk about is that affiliate marketing constantly requires driving new customers by clicking on your affiliate links. This is not a “build it and they will come” scenario. While affiliate marketing can be very lucrative, you only receive commissions based on each individual sale. So while you may make a few dollars off one sale to Sally… you will not make any money off any of Sally's subsequent purchases unless she clicks on your link again prior to making another purchase.

To overcome this, it helps to funnel your readers and viewers to a space where they can sign up for an email newsletter. Then email your list every week (or at least once a month), talking about the benefits of one of the products you have affiliate links for.

The other downside to essential oil affiliate opportunities is that they don't offer high commission percentages. The average I've seen is 2%-5%. Occasionally you may be able to find some for 15%. To overcome this, you need to have a solid and consistent marketing strategy.

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Joining an Essential Oils Network Marketing Company

In case you haven't noticed… network marketing (also known as multi-level marketing, MLM, direct sales, social selling… etc) 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 of how the marketing is conducted.

Becoming a Wellness Advocate, Brand Partner, Essential Oils Distributor, Associate, or Independent Business Owner… getting started with an existing oil business opportunity is an exciting time. There is plenty of room to design your own business plan using their products, whether you want. to focus on education first, build a local or online community, work local or online vendor events, blog, or utilize your network marketing company as an affiliate program. The best way to grow an essential oils network marketing business really depends on what resonates with you.

The best part for a company using the network marketing business model… it is ONLY paying for marketing that results in sales.

The best part for a marketer to use a network marketing company is that every time the customer logs in to make a subsequent purchase, you still earn the commission (even if they don't click your link first). Plus, you're able to leverage additional earning strategies through building a team. And some don't even require purchasing an expensive starter kit.

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 marketers for actual sales instead of throwing money out into various methods hoping someone will come along and purchase. And you can grow your network marketing business using the same link technique as you would any other affiliate program.

The biggest difference between Affiliate Marketing and Network Marketing is Network Marketing provides commissions on recurring sales and 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 grow 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 varieties 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 it's 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.

What to look for when considering an essential oil network marketing company

Not all teams and companies are the same. There are two important things to consider before joining a network marketing company: the company itself and the team.

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 of how you plan to grow your business.

Also, look long and hard at their essential oil procurement process to ensure vivid transparency into how the products are made. Quality and contents in the overall product line are crucially important and will continue to be the top priority for many potential customers seeking higher wellness levels through using natural products. I highly recommend you check out my post about the dirty secrets of the essential oil companies. And be very selective with which company you choose while identifying what pieces of their marketing are just marketing and which sentences they use to show the truth.

Tips for Using Network Marketing To Grow Your Oily Business

When grown the right way, a network marketing business can have many social and emotional benefits, in addition to income. Growing your network marketing business is all about building relationships and helping those people solve specific problems they need help with.

Always focus on building relationships first. Network marketing isn't about speed and numbers. It is about cultivating a community, solving problems, and adding value to the products you offer.

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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, your needs, and your values.

How do you envision your life and company?

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 merging the two together.

Or perhaps you need something a little less time-intensive…

Think of this… You hop online for a few hours a day to write a post or record a video about a product, something you did, or a fun fact just learned. Then go about your day tending to your 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' extracurricular activities.
• knowing that 90% of what you create is reusable or ‘evergreen' content.
• hyper-focus abilities with solely sharing information and education.
• not need to worry about inventory, shipping, fulfilling orders, handling financing, or manufacturing.

If this sounds intriguing to you, then you may find you feel at home with pursuing an aromatherapy business in the affiliate or network marketing realm.

How to know which option is for you:

There are positives and negatives to everything, and there is no hard-set right or wrong answer. The best way to start your own essential oil business largely depends on which method resonates with you. If the first scenario above appeals to you, know you will need to eventually hire a team (employees) 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 forego 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, and are savvy enough to prepare for them in advance.

Some companies utilizing the affiliate marketing model allow 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. Most affiliate programs only offer referral compensation for 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 truly passive income that grants you the lifestyle most people crave… not needing to ask for time off, not needing to worry about not having enough saved paid time off, not needing to worry about closing your business for vacation, sickness, or your kids' sporting events. You choose when you work, how you work, and with whom you work.

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.

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Maximizing Efficiency: Merge An Online Store & Opportunity with A Physical Store

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) with 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 also be able to order through you online, maybe even with the opportunity for a discount. You could offer them the option of purchasing through your store at retail prices or purchasing 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. This would also free up extra funds for emergencies or for much-needed time off.

As you progress through the sales, I would highly recommend adding in some sort of education event online or on your website where you can teach people. Teaching about how to use essential oils safely and offering courses or crafting sessions is a fantastic way to build community, brand recognition, and brand loyalty.

Personally, I do feel this is the best of both worlds.

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The options I personally use and highly recommend

I'm a busy mom who stays home with two small children, homeschools, and a military wife. My family moves A LOT (anywhere from 1 to 3 years, sometimes more), which means a lot of uprooting everything frequently, often 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, as much as I do periodically daydream about it. The military also gives us weight limits for our household moves, which also doesn't leave much room for storing inventory either. And for those duty stations my husband has orders for less than 2 years in length, we full-time live in our RV (which makes moving easier on the kids).

Because of our inconsistent lifestyle, employing both Affiliate Marketing and Network Marketing made sense for me, and my family. 

To keep our family and business life as simple as possible with the least amount of stress possible, I use the internet for 90% of everything I do for my business, networking it all together through blogging and social media networking in addition to my in-person networking with our local homeschool and military family communities.

Here on EssentialOils.Life, I use a few different affiliate marketing links (mostly through Amazon, Mason Jars, and Drops of Joy) to help fund this website. Running your own website can be expensive (my websites cost slightly over $4,000/yr between the website hosting, necessary website add-ons, and other very useful complementary tools), so having a steady income from affiliated product sales definitely helps.

I do utilize the MLM business model as well through Young Living, and thoroughly enjoy blending it with blogging in addition to growing personal relationships with my customers and team leaders. The wonderful thing about already having a website is that I've opened my websites to unlimited contributions for my team members who enjoy writing but don't already have their websites, don't want to consistently write, or want an additional platform to publish on to increase their own visibility.

I personally find writing about and coaching new members on embracing a healthier lifestyle and self-care on all fronts of their lives (mental, spiritual, physical, social, professional, and home) to be incredibly rewarding.

Being able to put my business degree to use in coaching my Brand Partners has been incredibly fulfilling, especially after enduring some rough seasons of life that left me unemployed, chronically sick, and self-conscious about whether or not I could actually have a career again. This is what gave me my life's freedom back. Between the physical healing, emotional healing, and a sense of professional growth, I've become immensely grateful for all the opportunities and friendships this business model has brought in my direction.

I truly believe this is the best of both worlds, especially with having an INFP-A personality (learn 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.

Related Posts about growing an essential oils business:

• Frequently Asked Questions: Young Living Business
• 4 Necessary Steps to Growing An Essential Oil Business
• Who We Are & Meet Our Primary Team Leaders

Need help figuring out what is best for you?

Let's connect! I'd love to set aside 20 mins for you to hear about your lifestyle and needs and discover with you what I intuitively feel would be the best route for your personal situation (no purchase necessary, and never any pressure).

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Have you thought about starting your own essential oils business?

Tell us about it in the comments below!

Looking for more info about essential oils and adopting a healthier lifestyle? Be sure to check out our Healthy Home online course for tips on how to identify and replace common harmful products from your home.

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