Essential oils are taken from plant sources and carry the scent and flavor of the plant. They are used in perfumes and flavorings, but are also thought to have beneficial properties for personal care and wellness. Consumers, concerned with potentially harmful properties of chemicals and pharmaceuticals, have increasingly turned to essential oils, making it a $1 billion industry in 2013 with annual growth of approximately 2.6 percent, according to industry research firm Ibis.
What is a Distributor?
Manufacturers sell their products to wholesalers. Wholesalers distribute the products to other distributors, retailers or directly to the end users. In becoming a distributor of essential oils, you have some choices regarding how you can structure your distribution business. You can manufacture and distribute essential oils yourself, which is a complicated and costly way to get into the business. Easier choices involve buying your products from manufacturers and then branding and reselling them, or signing on as a distributor with one of the popular essential oil direct marketing companies, such as Young Living.
Know Your Product and Manufacturer
Essential oils have many different quality levels, from the purest to lesser-quality equivalents. If you select your oils on the basis of price, you might find that your product is not what you expect, particularly if you are buying from a foreign manufacturer. Learning everything you can about the manufacturer, manufacturing methods, quality grades and the reputations of the manufacturers in the industry is your first task. There is very little regulation over essential oils; the only rule is you can't claim medical results from their use.
Create Your Business
Creating an essential oils distribution business is a lot like creating any other business. First, identify your potential suppliers, get their prices and any advice they offer. Then do your financial projections to determine how many customers you will have to attract and how much product you must sell to each customer to provide you with enough revenue to cover the cost of your inventory, your marketing costs, your own salary, and profits to put back into your company for expansion. The Small Business Administration has an extensive website that can help you with these tasks. The direct marketing organizations operated by some essential oil manufacturers have simplified the process of setting up your own distributorship, but pricing and terms of distributorship should be carefully examined before you make the commitment to sign on.
Marketing is also a big hurdle. Some essential oil direct-marketing companies prohibit you from selling to retail stores or at flea markets and farmers markets. That means you must sell directly to the consumer out of your home, in face-to-face meetings, through hosted parties or through your website. You might have to educate a customer in the use and appreciation of the benefits of essential oils, so include that in your marketing rather than just letting the world know you are selling essential oils. It is still a niche market, and although this means there are plenty of potential converts available in the consumer population, your primary job is to educate them so they can understand why they should purchase and use essential oils rather than the common commercial products with which they are familiar.
- Entrepreneur: Distribution Models
- Small Business Administration: Becoming a Reseller: Getting Started 101 for Small Business Owners
- Preparedness Pro: What You NEED to Know About Essential Oils--Part 2
- Ibis World: Essential Oil Manufacturing in the US: Market Research Report
- Aroma Web: How to Buy Essential Oils
- The Free Dictionary: Essential Oil
Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.